Clause 48 - Use of information for, or relating to,
Employment
5:45 pm
Mr Malcolm Wicks (Parliamentary Under-Secretary, Department for Work and Pensions; Croydon North, Labour)
It may help the Committee if I outline the purpose of the clause, albeit briefly, owing to the time constraints on our proceedings.
The Government's strategy for reforming the welfare state is firmly founded on the belief that work is the best form of welfare. Our policies are increasingly focused on helping people to move away from benefits and towards the labour market. That philosophy is given substance through the development of innovative labour market policies such as the new deal, employment zones and the creation of the Department for Work and Pensions. Those reforms have been successful. Employment is at near record levels: more than 28 million people are in work—1.25 million more than in 1997—and recent figures show that unemployment is the lowest, in broad terms, since the mid-1970s.
However, although we know that our welfare to work approach is working, isolating the effectiveness of individual programmes and initiatives has been more problematic in methodological terms. For example, 30 per cent. of those who leave the new deal leave for unknown destinations. Once a client has left an employment or training programme, they are under no obligation to inform the Department for Work and Pensions of their activities. Although many clients do provide the Department, through its agencies, with the necessary information, a significant minority do not. Not knowing how many of that group are in work weakens our ability to judge the efficacy of the new deal and, incidentally, to respond as rigorously as we should like to parliamentary questions about it.
We want a more complete picture of how many people we have helped and are now in work. We should also like to know how well clients are doing at work, because we want to encourage them into jobs that last and in which they will progress. Under the clause, the Department will be able to obtain Inland Revenue data on whether the client has entered work, for how long and with what annual income. That will help us to evaluate the welfare to work programme.
Another important reason for obtaining that data is that many of our programmes are run in partnership with private and voluntary organisations. Those organisations are paid by results, and if they cannot confirm that a person whom they have helped has actually moved into work, they cannot claim payment. Access to Inland Revenue data will enable us to verify that the individual has moved into work, ensuring that delivery agents are properly rewarded for their efforts and giving my Department confidence in the integrity of the funding arrangements.
That aspect is likely to become increasingly important over time. In future, providers are likely to be rewarded not only for placing people in jobs, but
according to how long they remain in employment and the progress they make while they are there. Such a funding regime would be practically inoperable if we were to remain reliant on current methods of information gathering. It would also be impossible to secure against false claims for payment. Developing more appropriate funding mechanisms will produce better outcomes for our clients, and acquiring Inland Revenue data will facilitate that.
I realise that new data-sharing provisions always, rightly, raise questions in relation to human rights legislation and the Data Protection Act 1998. However, I assure members of the Committee that the measures do not remove anyone's rights under that Act. They do not permit any disclosure of information beyond that which is required for the proper exercise of Government functions. The Department will abide by the Act when using the information. The provisions are in line with the article in the convention on the right to respect for private life. They will help to ensure the rational and effective use of public funds and are therefore necessary for the economic well-being of the country.
As well as enabling us to obtain new information from the Inland Revenue in the context of welfare to work programmes, the clause will allow the new Department to pool the data it holds for use in any of its purposes. That will further break down outdated distinctions between social security policy and employment and training policies, establishing a consistent framework for information management reflecting the business needs of the Department.
At individual level, staff dealing with a customer's employment and training needs will be able to access the customer's benefits and child support records. Similarly, staff dealing with benefit or child support aspects will have access to information on the customer's employment and training needs.
Having set out the purposes of the clause and given assurances about data protection and privacy, I hope that members of the Committee will support it.