Welfare Reform and Work Bill (Second sitting)

Stephen Timms Excerpts

Thursday 10th September 2015 Public Bill Committees

[The Chair]

Thank you. We have a good hour for this session, so we have quite a lot of time, but there are four of you. I ask for concise and fairly loud answers, but do not feel that you all have to answer every question unless it is specifically your bag or you have something to say. We will start with a number of questions from Stephen Timms.

[Stephen Timms (East Ham) (Lab)]

Q 17 I have three questions to ask at the beginning. I think the first one is mainly to Octavia. We heard this morning from Women Like Us that the agreed flexibilities in the conditionality around lone parents at the jobcentre are being withdrawn. What is the experience of people who have been in touch with Gingerbread about the application of the lone parent flexibilities? I do not think that there has been any change of policy. Are there things that could be done to ensure that lone parents can benefit from the flexibilities that they should benefit from?

Octavia Holland: The feedback that we have had through our advice line and through our membership body, which is now some 60,000 single parents, is that there is huge variability in how the lone parent flexibilities are applied. To put that in context, the lone parent flexibilities were traditionally in secondary legislation—in regulations. With universal credit, they are being taken out of secondary legislation and put into guidance. The feedback from single parents is that they have felt pressure to take jobs at hours that do not fit with their caring responsibilities, such as night shifts at the weekends or working in the evenings, and that sufficient consideration has not been given to the childcare that is available or to the type of jobs that they might be able to take. We are having an ongoing discussion with officials at the Department for Work and Pensions about this but it is difficult to get any clarity about the steps that are being taken to ensure that the flexibilities are applied consistently.

That presents a particular concern about the proposals around conditionality. Without those lone parent flexibilities, single parents, with three and four-year-olds, who are required to work, have fewer safeguards to be able to say, “It is not reasonable for me to work at the weekend because there is not any childcare at the weekend.” Our feedback through the advice line is definitely that it is a growing concern; that the flexibilities are not being applied consistently.

The other thing I would add quickly is that there are now far fewer lone parent advisers than previously. There are some left but the trend is that work coaches should have expertise in lone-parent issues. The feedback we have had is that that is contributing to the issues. Obviously, single parents have a number of factors that need to be considered. When you had lone parent advisers, the evidence was that they were really helping to get single parents into sustainable employment. That expertise does now seem to be lacking. That is certainly a concern.

[Stephen Timms]

Q 18 To clarify, in your discussions with Department for Work and Pensions officials, there is still the intention that those flexibilities will be available but your experience, in practice, is that they are quite often not?

Octavia Holland: Yes, absolutely. To clarify, it is even quite difficult to establish where in guidance those lone parent flexibilities are now. They are in disparate pieces of guidance that are given to jobcentres and work coaches. It is not like you can get your hands on one piece of guidance that says, “Look, if you want to support a single parent into a decent job, these are the kind of things you want to consider.” There is a real lack of clear information.

[Hannah Bardell]

Q 19 Thank you very much for coming to speak to us. On that point about lone parent flexibilities, do you not believe that those important flexibilities should therefore be brought into statute, so that they are very clear and people can understand them?

Octavia Holland: At Gingerbread, we absolutely feel that the lone parent flexibilities should be in regulations, as they were previously, because that makes it very clear to jobcentres and work coaches the best way they can support single parents into employment. Single parents are generally very keen to work and over 60% of them do, but you do need to consider the fact that they are not going to have childcare in the evenings or the weekends. You do need to think about that kind of thing. Yes, we do support that they should be back in regulations.

[Stephen Timms]

Q 20 This is a question mainly for Tony. We are told that there is evidence that the benefit cap has encouraged some people to go into work who would not otherwise have done so. Can you tell us how compelling you think that evidence is, and how big an effect there appears to have been from the application of the benefit cap?

Tony Wilson: The Department published some ad hoc analysis about a year ago on the estimated impacts of the benefit cap. That was peer-reviewed by the Institute for Fiscal Studies. That was a good piece of work and it did show a statistically significant positive impact on some people in households affected by the benefit cap, on the likelihood of their moving off benefit and in to work. It showed some interesting things. It showed that those impacts were greater where the financial impact of the cap was greater. They were greater in London than in other parts of the country, so things you would intuitively expect to see.

However, there are a couple of points. One is that the total numbers moving into work are very low. This is a group where the likelihood of entering work, where you have been capped, is very low. A percentage increase in the likelihood of moving into work, you might see a 30% or 40% increase in likelihood of entering work. But if your likelihood was originally one in 20, then that might increase to only about one in 15 and still look like a very large impact. The research found percentage points. If you like, the absolute impact of the cap on the likelihood of entering work was pretty small—it was three or four percentage points. In other words, out of every 100 people capped, an additional three or four may move into work. That was the average. It was greater where the financial impacts were greater, which is what one would expect.

The benefit cap is probably one of the only measures in the last Parliament that created a really strong financial incentive to move into work. Out of all the welfare reform measures, if you move into work, you get your benefit back, essentially. You get your £200 or £300 income back. To some extent, it might be surprising that there was not a greater impact. The impact in terms of actual numbers was relatively small.

More interesting still, we evaluated a programme called the Brent Navigator. Brent Council invested in adviser support to help capped households back into work. We used a statistical technique to try to find the additional impact of that, and we estimated that that had about a 50% positive impact. Having intensive, adviser-led support to help people move back into work led to a larger-again impact on the likelihood of people moving into work. It highlights the importance of joining up the support you deliver and ensuring that those who are affected by reforms also get access to appropriate support to move back into work.

With the lowering of the cap, there will be more people with quite small losses compared with what happened under the previous cap. In those groups with small losses, the evidence found a far smaller impact. It was a negligible—pretty much a zero—impact on people whose losses were £10, £20 or £30 a week. That is consistent with the impacts of many of the other reforms such as the spare room subsidy, or the bedroom tax, or the lower uprating of benefit, which add quite small impacts and probably did not have a behaviour effect.

[The Chair]

I wonder whether the other witnesses would like to comment on that question as well. Is there any evidence out there in your world about what has happened in relation to the benefit cap?

Kirsty McHugh: Not dissimilar to Tony in many ways. In terms of our members, obviously the work incentives are increased. The differential between being out of work and in work has increased. That has come through in some of the anecdotal evidence from the provider base. At the moment, it is anecdotal. I do not think we have hard figures that could be shared. Many providers are investing more and more in the off-benefit calculators. They are being very clear with individuals what their options are and how much better it is going to be for them to move into the workplace. Generally, we find that it is about other barriers stopping people going into work, which is more around skills and health and so on, so concentrating on those is the way to make the bigger uplift.

[Stephen Timms]

Q 21 A final question from me to Kirsty. The note we had from the Clerks tells us that the proportion of Work programme participants who have secured sustainable job outcomes has been almost 25% for people on jobseeker’s allowance, but less than 10% for people on employment and support allowance. Looking back on the experience of the Work programme, why do you think performance has been so poor for that particular group? What are the lessons for the future design of the Work programme to try to do a better job next time round?

Kirsty McHugh: The first thing to bear in mind is that the majority of people on ESA who are put into the Work programme have not received any support before at all. The targets put in place were best guesses by the officials, based on a far better economic scenario than we had at the beginning of the Work programme. Performance has been improving in relation to ESA. In fact, all targets have been met across all the providers—it is quite difficult to say bad performance or good performance, because we did not actually know what to expect in relation to performance. We need to do things differently next time in relation to people on employment and support allowance. We know that, once they get into work, they stick in work. We have far more information about their distance from the labour market, so there is some real learning about how we put in place a financial model that means we are able to invest more up front and perhaps less in the sustained employment element, because ESA people do stick in employment once they are there.

[The Chair]

Charlotte, do you want to come in on that point?

Charlotte Pickles: The only thing I would add is that there is a common perception that the Work programme is failing ESA claimants, which I think is a little unfair. In its last report, the National Audit Office said it was broadly in line with previous programmes. One of the challenges, which Kirsty touched on, is that we really do not know very well what works for these cohorts. I think it is less about saying the Work programme has not worked. Broadly, it has, as Kirsty has said, met expectations. We need to be investing, looking at and experimenting in what will actually help quite a diverse group of people.

[Stephen Timms]

Q 22 One of the interesting things about this discussion in the context of the Bill is the Government’s objective to halve the disability employment gap. Is it not clear that we would have to do much better than the 10% that has come out of the Work programme if we were to get anywhere close to halving that gap?

Kirsty McHugh: It is a hugely positive move from the Government to say that they want to do that. It is hugely ambitious. At the moment that means an additional 1.1 million people with disabilities into work. That means looking at the assessment regime, the interaction of the assessment regime with the employment support regime and the finances. It also means looking at the demand side from employers. There is some interesting work going on with the behavioural insights unit and others about how we actually change the mindset and de-risk it, potentially, in their minds—it should not be risky but sometimes it is perceived as being so—so that they are more likely to take on people with disabilities. It is not just one thing, but a whole series of things. It is a huge cultural shift but I am very pleased that the Government have said that they want to do it.

[The Minister for Employment (Priti Patel)]

Q 23 Kirsty, you have touched on a broad range of themes, in particular on the Work programme and ESA. I know from discussions within the Department and, you will be aware, with Work programme providers, that this is a challenging area but one that we are ambitious about. Do you have any learnings or thoughts from the providers that your organisation represents? For ESA claimants in particular, what are those game-changing interventions? What else do you think the Government could focus on in terms of spending for support—bringing people closer to the labour market but, importantly, helping them to continue their journey of long-term sustained employment, not just getting them into work? What kind of health interventions could we look into? Do you have any insight or experience of seeing fruitful outcomes?

Kirsty McHugh: We did a piece of work for the Department bringing together a range of our members looking at ESA. We have actually done that more than once over the course of the past few years, as you can imagine. We have a lot of the big disability charities in membership—last year it was two-thirds not-for-profit—but we also have all the Work programme primes and Work Choice primes. A lot of the best practice comes from the other programmes, not just the Work programme.

The big thing is staff skills and confidence. For somebody who is presenting to them, it is them knowing about that right mix of support and challenge as a front-line adviser. They may have been out of work for 11 or 12 years so their confidence is on the floor. They have a huge gap in their CV and the mindset is not there in terms of, “I want to work and I can work.” Often, the providers say that once you switch that mindset it is almost job done.

How do you get to that attitudinal change so that people feel really positive about themselves and want to change their lives and those of their families and communities? It takes a while. It is about one-to-one relationships with front-line staff—none of this is rocket science. It is about long-term relationships and trust. Therefore, lower case load is really important for people with disability and health conditions. There has been a lot of investment in cognitive behavioural therapy-type approaches and talking support. Group therapy seems to work very well. There is never one magic bullet. A lot of this will be quite familiar to you. The good adviser will have a personalised referral to a range of different services in that area but staff skills are more important than anything else.

It is then about selling in—a horrible term—that individual to an employer. If somebody has a big gap in their work history, that can be quite an ask of an employer. Therefore, getting them work experience, or something that fills the hole in the CV that proves to them and to the employer that maybe they are a bit less of a risk, is really important. We know a lot now about the prevalence of mental health difficulties, which often co-exist with other physical conditions. It is often not just one condition. Often, the barrier to work is not health but the fact that they have got a lack of work history and a lack of skills.

I think there is a good consensus between the officials and the sector about what has worked and what has not worked and what we want to do going forward. As I said, there is quite a lot of evidence that the sustainment rates for people on ESA who get into work are high. What we definitely need to do is bring more money up front, which then means the specialist providers, charities and so on can do more up front with that individual and maybe we will have less on sustainment payments than we have currently. It is not about increasing the overall unit cost but about remodelling it.

--- Later in debate ---

[The Chair]

Let us have an answer from everybody, and this will be our final flourish.

Sophie Corlett: It is hugely important and much underused in mental health, and it could be much more widely understood as being really useful, particularly if people are able to use it before they apply for a job so that they can take a package with them. That would be the ideal, really, so that they could go to an interview and say, “This is what I can bring with me.” That would be the best use of it.

Matt Oakley: I will defer to delivery colleagues.

Gareth Parry: It is a fantastic programme. I would massively advocate mental health support services, because we deliver one. It is a great programme, which is significantly underused, at creating awareness and promoting not only mental health service support but all of Access to Work. It remains a challenge, but overall it is a fantastic programme. I should declare that I already gave evidence at the Select Committee last year, and I do not want to repeat any of that evidence.

Looking forward, it is probably the one area in the employment arena where personalisation could be looked at to a much greater degree. It is as close as we have got in the employment agenda to personalised budgets. It is not personalised budgets—it is not personalisation as we know it today—but it could be, and it could be a really interesting arena just to take the next step towards giving more choice and control over people’s employment journeys.

[Stephen Timms]

Q 86 Can you give us an example of the use of Access to Work for people with mental health problems? What are the kinds of things that you are able to do to help?

Gareth Parry: A whole range of things. I am just wondering, in the interests of brevity, whether that is something that I should do outside this meeting. We can send you a whole load of case studies and examples of what we did.

[The Chair]

If you could write to the Committee, that would be great.

Laura Cockram: Personally, we have some examples of where it has been really useful, but it is not something that is widespread in terms of people with Parkinson’s. It has been positive where we have heard about it.

Roy O'Shaughnessy: I have heard of many positive experiences. It is underutilised by individuals who could make use of it, and it is virtually unknown by the employers. Matching those two things up is important.