Motion of Regret

Jobseeker's Allowance (Mandatory Work Activity Scheme) Regulations 2011 – in the House of Lords at 7:53 pm on 10th May 2011.

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Moved By The Countess of Mar

That this House regrets that it has been given insufficient information to understand the policy objectives of the Jobseeker's Allowance (Mandatory Work Activity Scheme) Regulations 2011 (SI 2011/688), how the scheme will work and whether claimants' prospects of obtaining employment will be improved.

Relevant document: 27th Report from the Merits Committee.

Photo of The Countess of Mar The Countess of Mar Deputy Chairman of Committees, Deputy Speaker (Lords) 7:54 pm, 10th May 2011

My Lords, in moving this Motion I may cover some of the ground to be covered by the noble Lord, Lord Knight of Weymouth, in his Motions. The 27th report of the Merits of Statutory Instruments Committee draws our attention to the fact that:

"Although there is a considerable amount of paper attached to this instrument the information it contains is ... vague".

The committee makes it plain that it has asked for clarification on the regulations from the Department for Work and Pensions and that very little has been forthcoming. The committee points to several inconsistencies between the Explanatory Memorandum and the departmental memorandum to the Social Security Advisory Committee. Like the SSAC before it, the Merits Committee is particularly concerned because,

"the sanction on the individual claimant for failing in any element", of the scheme,

"is the loss of 3 months' benefit".

It also points to how:

"The degree of flexibility and discretion built into the arrangements causes the Committee to question how it can be delivered with any degree of consistency".

Noble Lords have always been assured by Ministers that primary legislation lays down the framework and that the detail would be provided in secondary legislation. In this statutory instrument, we have little detail. We are told that the Department for Work and Pensions does not intend to provide detailed guidance on the criteria within the regulations, as it believes the best way to select participants is via adviser discretion. It admits that it has limited evidence for the effectiveness of the four-week placement in mandatory work activity and that that activity is a new scheme. In other words, it is making the rules on the hoof-rules for which there will be no scrutiny and no appeal for the claimants.

I have the greatest sympathy with anyone not versed in legislation who may need to refer to it for a particular purpose. I feel that I almost fell at the first post when I tried to find Section 17A(10) of the Act for the meaning of "jobseeking conditions", as referred to in the last footnote on page 3 of the statutory instrument. I have a copy of the Jobseekers Act 1995 with a Section 17 but no Section 17A, let alone Section 17A(10). There is no indication of when or under which legislation Section 17A(10) was inserted. I would have thought that I would find Section 17A on the internet, but no such luck. With the help of the wonderful staff in the Printed Paper Office, I was led to Section 1 of the Welfare Reform Act 2009-but still no luck. I found that "jobseeking conditions" means conditions set out in Section 1(2)(a) to (c) of the Jobseekers Act 1995. Why on earth could the footnote not have read just that? I can imagine that a member of the public would be enraged at having to spend an unnecessary £18 for a copy of the Welfare Reform Act in addition to the £7.70 for the Jobseekers Act simply to find the definition that is pivotal to the statutory instrument.

Regulations 4 and 5 are clear in so far as they go. Noble Lords will be aware that I am concerned with a number of charities that represent people with CFS/ME, but may not know that this week is ME Awareness Week. The Department for Work and Pensions seems to be singularly unaware of and indeed determined to ignore the disabling symptoms of this fluctuating condition. It seems odd to me that the World Health Organisation and the Department of Health recognise it as a neurological condition, while the former Chief Medical Officer, Professor Sir Liam Donaldson, told the BBC online on 11 January 2002 that CFS/ME should be classified alongside multiple sclerosis and motor neurone disease. The National Institute for Health and Clinical Excellence recognises it to be as disabling as multiple sclerosis, rheumatoid arthritis, congestive heart failure and other chronic conditions.

I note from a Written Answer that the Department for Work and Pensions refers to chronic fatigue syndrome when my Questions relate to chronic fatigue syndrome/ME. The two are entirely different conditions, defined by different sections of the International Classification of Diseases in ICD-10. It is high time that the department recognised this, for its failure to do so by applying unjustifiably harsh sanctions which seek to force people with CFS/ME back to work before they are ready could be counterproductive, resulting in a deterioration of their health or delaying their recovery.

I have recently been sent correspondence from a person helping claimants with CFS/ME who are being transferred from incapacity benefit to employment and support allowance. She explains that the claimants are first sent a letter, as outlined in Regulation 4 of the statutory instrument, and states:

"This tells them briefly about the start of the process and that they'll be contacted by 'phone".

The time period appears to be about two weeks. She says:

"When the claimants get the 'phone call they are read a statement outlining the process. This appears to be read from a script. The claimants are also given the opportunity to ask questions. I'm aware of several claimants who say the statement is lengthy and due to their cognitive problems, they have been unable to remember the content of it. One claimant asked for a written copy of the statement to be sent to her but was told this wasn't possible as 'they were doing it this way' i.e. verbally".

She says:

"I feel this highlights the inadequacy of the DWP in catering for those with conditions that involve cognitive problems and further underlines just how these problems are being ignored and poorly understood by this Government department".

She goes on to say that her contacts are from Kent and the Midlands,

"so they cannot say they are dealing with the process differently-my contacts were both read the same statement over the phone".

Regulation 4 deals only with what must be done in writing. There is no mention of any verbal statement given over the telephone. There is no indication of the procedure for dealing with a person who cannot understand or take in what has been read to them and my example would seem to indicate that, far from being a flexible and tailor-made service, the process is designed to catch the innocent and the unwary. Action for ME has commented for some time that the DWP does not properly understand the impact of ME on the individual's capacity to work. In its response to the call for evidence for the independent review of the work capability assessment, it reported that there is unfounded scepticism towards the diagnosis of ME, set within a broader cultural perception within the benefits system that applicants are fraudsters until proven otherwise and that the system lacks recognition of barriers to work which are not patently visible, including cognitive problems and fatigue, particularly when the applicant "looks well". There is insufficient understanding of and training in up-to-date data on ME by assessors and decision-makers, including medical staff, and unrealistic expectations on claimants with ME to find and sustain work over time.

Another correspondent, Mr Keith Anderson, who is a CFS/ME nurse in Fife, wrote:

"My anger is growing because I can see no reason why this group of patients is being singled out other than deliberate removal from benefits because the DWP staff do not believe the condition exists, or they recognise many will not appeal due to the stress and illness it will cause them".

I had another letter today, which I will send to the Minister, on precisely that fact. The nurse continues:

"Patients are suffering greater symptom impact, relapse in their condition management, exacerbation of any mental issues and, of course, a huge increase in the workload for me".

He maintains that the oath "First, do no harm" is not being adhered to by DWP doctors.

I understand that claimants will be given placements that last up to four weeks and will be expected to work for up to 30 hours a week. We are not told the type of work they are to be given. There is no indication as to what will happen to a person with a fluctuating condition who has been found by Atos doctors to be fit for some work, but who finds they cannot sustain the work allocated for the number of hours expected, except that they will fail to meet the jobseeking conditions and suffer sanctions. After all, is it not the case that those with CFS/ME need to change their attitude and behaviour-nothing a little cognitive behaviour therapy won't cure?

I find it extraordinary that so much is left to the discretion of DWP personal advisers and private providers. I wonder whether the Minister saw an article in the Guardian of 1 April 2011-not a joke, I understand. It details how, in order to meet targets, vulnerable jobseekers are being tricked into breaching the rules so that benefits can be held back. A Jobcentre Plus adviser is quoted as saying:

"Suddenly you're not helping somebody into sustainable employment, which is what you're employed to do. You're looking for ways to trick customers into 'not looking for work'".

We know that we must not believe everything we read in the papers, but if there is so much as a grain of truth in the contents of this article, it is extremely worrying. I would be grateful if the Minister will categorically assure the House that there are no targets applicable to the DWP, Jobcentre Plus or private providers.

The Social Security Advisory Committee and the Merits Committee are highly critical of the sanctions system. They appear sceptical that sanctions will achieve the results they are designed to achieve. The Merits Committee points out that the department's own research indicates that,

"there is little evidence that workfare increased the likelihood of finding work", unless conditions are as close to work as possible. The DWP admits that it has not even asked bidders to specify the placements that they propose to find. The reasoning behind this is that contractors will be allowed as much flexibility as possible to consider what will best support customers. If I place a contract with an individual or a company, I expect to know in detail exactly what they propose to do. I expect my Government to do the same for me and my fellow citizens.

The Merits Committee tells the House that these regulations bear similarities to the Work for your Benefit regulations considered last year but not implemented, and which are revoked by the current regulations. It explains that:

"One of the key concerns at the time was that the providers should not exploit participants as a source of cheap labour and that participants should gain relevant skills from the experience. These concerns remain for the replacement scheme set out in the current regulations. The Work for your Benefit Scheme differed in that it was based on a randomised selection process and was a small pilot scheme with a clear evaluation plan aimed at examining whether mandatory work activity had demonstrable benefits".

It went on to say, tellingly:

"That evidence was not obtained, but the mandatory work activity scheme is being introduced nationally from the start of May 2011".

I readily acknowledge that there are a small proportion of benefits claimants who are work-shy and lack the disciplines required to obtain and sustain viable employment. I contend that sanctions are probably unnecessary for people with CFS/ME. A survey by Action for ME in 2008 found that people with ME want to work, and that when people with ME do not work it is because they are physically and mentally unable to sustain paid employment. Action for ME would prefer to see a system based on incentives and support, rather than sanctions. I recognise that there are also others in the population with mental and physical health problems that may not be immediately obvious and who are, in fact, very vulnerable. How does Her Majesty's Government propose to ensure that their policies will not do irreparable damage to minds and bodies?

I would like to see these regulations taken away and returned to us as a complete picture, rather than a sketch, but of course that depends upon the flexibility of the Minister. I regret that he has ignored the advice of the SSAC and the Merits Committee. I beg to move.

Photo of Lord Knight of Weymouth Lord Knight of Weymouth Shadow Spokesperson (Work and Pensions) 8:00 pm, 10th May 2011

My Lords, it is a pleasure to follow the noble Countess and I am very supportive of what she has said and of her Motion, but I am now speaking to the Motions standing in my name on the Order Paper. In that context, it is probably as well for me to explain to your Lordships why I thought it necessary to add to her Motion by tabling two of my own.

I am only too aware that it is exceptional for your Lordships to agree an annulment. In this case, I am not opposed in principle to the subject of the regulations, to mandatory work activity-I was a Minister when we proposed a pilot of something similar, just referred to by the noble Countess. I was therefore very reluctant to seek to annul these regulations. What I was after was a mechanism that required the Government to take back the regulations and return with them, in improved form, with the necessary evidence to support their introduction on a national scale, much as the noble Countess has said she would like. In this, I too was informed by the 27th report from the Merits Committee that she referred to.

As I understand it, the regret Motion in the name of the noble Countess effectively reprimands the Government, but does not prevent the regulations from proceeding. Given the extent of criticism from the Social Security Advisory Committee and then from the Merits Committee, it seems appropriate to offer your Lordships the option of requiring the Government to address the concerns of those committees and come back with sufficient information before the instrument is agreed, but giving an indication orally that if they have such evidence the instrument will of course be passed. I was therefore delighted to discover a 2006 report from a Joint Committee on conventions to your Lordships. On page 63 of the report, at paragraph 232, it says:

"In the absence of a power to amend SIs, the most constructive way for the Lords, as the revising chamber, to reject an SI is by motion (or amendment) incorporating a reason, making it clear both before and after the debate what the issue is".

I therefore tabled such an amendment in this spirit, incorporating a reason, and it was initially accepted. It was quickly then unaccepted, because such a Motion was without precedent. After further discussion, it was then accepted again before finally being rejected by the Clerks. The Clerks were then very helpful in splitting my Motion into the two we have before us tonight. The first is a traditional annulment and the second regret Motion is the explanation. I am most grateful to them for their assistance, but I have to say to your Lordships that I think the current situation a little odd. The way my two Motions sit on the Order Paper is not in the interests of transparency and has elicited a number of media enquiries as to what I am up to. I am therefore writing to the Procedure Committee to suggest that the recommendation of the 2006 committee be accepted so that we can be clearer in future on the Order Paper.

I turn to the substantial issue. As we have heard, the regulations allow the Secretary of State to introduce mandatory work activity for customers in receipt of jobseeker's allowance, from April of this year-that is, last month. Each placement consists of up to 30 hours' activity per week and lasts for up to four weeks. Participants will at the same time be expected to be actively seeking work, attend fortnightly interviews and be available for work. If they fail to meet these conditions, they can lose 13 weeks' benefit for the first offence and 26 weeks' benefit subsequently.

While there is an appeal process for the sanction, there is no appeal for being mandated on to the scheme. There will be around 10,000 places per year and customers will not be able to volunteer to take up these places. An enthusiast would therefore have to persuade their adviser to make them go on the scheme. The DWP does not plan on issuing detailed guidance, as we have heard, but wants to give flexibility to Jobcentre Plus in how it uses this new weapon in its armoury. I was an early evangelist for local flexibility but I worry that this is all left a little too vague, given the seriousness of the sanctions that I have set out.

As I have said, I am not against the general principle; when in government, we legislated for a pilot to mandate Work for your Benefit. However, I am concerned about proceeding with a national scheme without evidence. If this Government had proceeded with the pilot for Work for your Benefit, they would have that evidence on whether this will work.

As the Social Security Advisory Committee has said in paragraph 4.2 of its report,

"published evidence is at best ambivalent about the chances of 'workfare' type activity improving outcomes for people who are out of work. The Department's research indicates that 'there is little evidence that workfare increases the likelihood of finding work' unless conditions are as close to work as possible. The evidence suggests that the mandatory work activity must be carefully tailored to an individual's specific needs and carefully timed to be of maximum effectiveness".

In the light of that clear statement from the department's independent experts, how does this four-week work activity differ from the work done on, say, community punishments? How will advisers be trained to tailor it to the individual's needs and timed to be most effective?

As the Merits Committee said, the purpose of the mandatory work activity is not clear. Is it, as the Explanatory Memorandum says, to require extra support to help customers refocus their approach to job search? Or is it more, as the department's memorandum to the Social Security Advisory Committee says, to give jobcentre advisers another intervention to deal with those doing only the bare minimum to comply with the requirement to seek work? The SSAC is concerned about the,

"precedent set by appearing to punish claimants who are satisfying the conditionality rules but who in the view of the Personal Adviser appear to display the 'wrong attitude'".

Is the committee not right that this is an extension of the conditionality rules by the back door, by negative instrument, and with no evidence to support it?

Why not delay the regulations and proceed with the pilot to ensure that the 10,000 work experience places are an effective use of taxpayers' money in helping people into work? How would the Minister respond to those who suggest that this is going to end up just being a way of parking 10,000 customers and generating a few headlines in the Daily Mail, but not actually helping anyone?

Then there are the concerns about certain groups being able to do the activity and fulfil the other conditionality rules. I shall quickly run through those, and if he has time perhaps the Minister could address them too. Rural residents may be sent to work at some distance, at their own transport cost, and potentially a long way from the local office for signing on. Will the requirements be relaxed to allow them to sign on by phone during the period of the placement?

What about participants with children? According to the SSAC report, their childcare has to be funded from their benefits. Can that be right? Does that not put them in a position of choosing to use all their benefit for 30 hours' childcare leaving nothing to live on, to use a benefit sanction of three months, or to take risks on the reliability of informal childcare, which might mean that they were unable to get to work? What will that do to their experience of work as a positive activity? Remember, they have no appeal on the mandation. The Minister could assist greatly by being clear now that advisers will put the interests of children first in applying these regulations, and that parents will be mandated on to the scheme only if the childcare arrangements are adequate and affordable.

What about ethnic minorities, those with caring responsibilities, those with disabilities, those with ME and those with learning difficulties? DWP evidence shows that these are the people most likely to be sanctioned for not actively seeking work; they are therefore those most likely to be mandated on to this scheme and therefore at greatest risk of these punitive sanctions.

As ever, I have asked a lot of questions. I apologise. I know it is a better tactic in Opposition to stick to just one or two in the hope that it forces the Minister to answer them. However, there are a lot of questions. That is why everyone who has looked at these regulations wants more information. I found it shocking to discover just this evening on the Merits Committee website that it has published an exchange of letters between itself and the Minister of State in the department, Chris Grayling MP. In the first letter on 11 April, the committee said:

"Our 27th report made it clear that we found the case for the Mandatory Work Activity Scheme Regulations to be vague, unquantified and lacking in practical detail".

The committee took oral evidence from Mr Grayling, which,

"did not add significant detail about the numbers of places actually needed, or the cost benefit assessment. We gained the impression of an experimental scheme, with little clear accountability to the taxpayer, or to claimants who might find themselves required to perform a very wide range of activities, the scope of which remains unclear".

Mr Grayling replied on 19 April:

"I do not believe that the Department should be criticised for not providing information on all these issues in the explanatory memorandum that accompanied the Regulations".

He continued, saying that,

"the function of the Committee is to examine whether a statutory instrument will effectively achieve the stated policy objectives, not to examine whether those policy objectives are themselves desirable. In my view some of your detailed questions, including that regarding Jobcentre Plus resources, suggest that the Committee is straying further into questioning the policy itself than it should do".

The committee replied-understandably, in some outrage-on 4 May:

"The Committee felt strongly that your letter was an inappropriate response to legitimate concerns expressed by a Parliamentary Select Committee ... It is for the Department to give a coherent explanation for the legislation it proposes-the Committee's task should not be to undertake research to piece information together".

The committee goes on to say that if it is not satisfied, it will invite the Secretary of State for Work and Pensions, together with the most senior officials from the department, to give oral evidence to the committee. It is clearly very unhappy with the way that Parliament is being treated by the Minister of State.

In conclusion, I know the Minister takes his work here very seriously. Perhaps, by speaking in this debate tonight, we will help him to persuade his colleagues in the department that getting secondary legislation right is essential and not just an irritant. I look forward to his response and urge your Lordships to send a strong message to Ministers about the importance of Parliament, the Merits Committee and accountability by supporting at least the Motion of the noble Countess, Lady Mar.

Photo of Baroness Thomas of Winchester Baroness Thomas of Winchester Chair, Delegated Powers and Regulatory Reform Committee, Chair, Delegated Powers and Regulatory Reform Committee 8:15 pm, 10th May 2011

My Lords, I, too, am glad to have the opportunity to debate briefly the thinking behind this order, which raises some important questions. I am not unsympathetic to the whole scheme. It has been introduced, we are told, because Jobcentre Plus staff wanted a tool to enable them, in the words of the Minister, Chris Grayling, when he gave evidence to the Merits Committee, to refer someone on JSA for a period of full-time activity to instil the discipline of work, and re-energise, refocus and remotivate them to enter or re-enter the world of work. This sounds reasonable until one looks at the process. It is very rare for the Merits Committee, of which I used to be a member, to draw the special attention of the House to an order using the following words:

"The Committee considers it unacceptable that the House has been given insufficient information to understand the policy objective of the scheme; to determine how the scheme will work; and effectively to assess whether the outcome will help claimants to improve their prospects of obtaining employment".

Since then, the noble Lord, Lord Knight, has told us what the up-to-date situation is, which I had not heard about. I am glad he has given us that news.

It is important to say that this mandatory work activity scheme is not work-related activity, which is a very different scheme for those on the employment side of ESA. However, there is a similarity between the two schemes-not just between their names, which is unfortunate. Both are supposed to help unemployed people prepare for the world of work and both carry a sanctions regime, although neither is a sanction in itself.

The two sanctions regimes are very different. Work-related activity for ESA claimants carries a relatively mild sanctions regime, whereas this scheme-although placements under it last for only four weeks-has a much tougher regime. As we have heard, if someone defaults without good cause there will be a fixed sanction of 13 weeks. If this happens twice within 12 months, the sanction will be of 26 weeks. No wonder the SSAC considered this disproportionate. It was also critical of the fact that the sanction could not be overturned or shortened by a claimant re-engaging with the process, thus turning the whole placement, in this circumstance, into nothing much more than a punishment. How do we know what a good cause is for this particular scheme? We do not; it is left, presumably, to the decision-makers in Jobcentre Plus. Why? It is apparently felt that prescribing in regulations what constitutes good cause will limit the circumstances in which it can be applied, although it is prescribed for other sanctions regimes. Does this mean that there is likely to be inconsistency up and down the country in how good cause is judged? Yes, this is bound to happen, which must surely be why these regulations, as drafted, are unacceptable and leave Parliament unsighted as to how the scheme will work in practice.

One matter I am puzzled about is the nature of the placements under the scheme. The Minister in his evidence said that placements would be in the not-for-profit sector. He cited the examples of work in a charity shop or on a conservation project. However, nowhere is it spelt out in the regulations that these placements will be in the not-for-profit sector. Clearly there are all kinds of implications if placements are to be made in ordinary businesses, including the danger of exploitation. I wonder why this is not stated in the regulations. Many other questions are raised by the order. Perhaps two, crucially, are: is the balance right between what the Secretary of State lays down and what is left to local determination; and what will success look like?

All in all, Parliament is being asked to buy a pig in a poke with these regulations, framed the way they are. As I said at the beginning, I am not against the policy of trying to engage perhaps recalcitrant jobseekers with the world of work, but the lack of information we are given in these regulations leaves me with no option but to vote for the regret Motion of the noble Countess.

Photo of Lord Rix Lord Rix Crossbench

My Lords, this is the first time that I have been in your Lordships' House since the debate on disability last Thursday, when it was announced that the noble Lord, Lord Freud, had had an unfortunate accident. I am glad to see him back in his place and I hope that he is fully recovered.

I start by stating that I am, of course, in support of the principles behind universal credit-namely, making work pay and helping more people into employment, if they are able to work. I doubt that anyone in the Chamber opposes that. However, the means by which this is achieved must be sensitive to the wide-ranging needs and abilities of potential jobseekers. It is within these parameters that any assessment of the fairness and value of the Mandatory Work Activity Scheme must be considered to ensure that people are not disproportionately disadvantaged. I intend to focus on the impact that this regulation would have on disabled people and, as President of Mencap, especially on those with a learning disability, because I fear they stand to lose most as a consequence of these regulations.

Recently, the Employment Minister claimed that three-quarters of incapacity benefit claimants have now been found to be fit for work. Coupled with the removal of the exempt group, which means that people with a learning disability are not automatically exempt from the work capability assessment, this could result in a significant number of disabled people being found to be fit for work and migrated onto benefits, most likely JSA, where they will be subject to conditions such as the Mandatory Work Activity Scheme.

This holds many challenges-primarily the risk of imposing unreasonable demands on people who might struggle to fulfil them because of their disability or those who might not fully grasp the requirements made upon them. A failure to attend a mandatory interview, for example, may be as a consequence of an individual's lack of understanding of what was expected of them, rather than a deliberate act of non-compliance. Indeed, the Social Security Advisory Committee has warned that:

"Evidence from the Department's Equality Impact Assessment and DWP research shows that ethnic minority claimants and those with a learning difficulty tend to be disproportionately sanctioned for not actively seeking employment. This, alongside other societal factors, could lead to these groups being disproportionately referred to this scheme and, as a consequence, at even greater risk of sanction".

I seek assurances from the Minister that the correct protocols will be put in place to ensure that people with a learning disability fully understand the obligations they must meet. It is also vital that these obligations are reasonable and that individuals are provided with appropriate support. This is particularly important because disabled people are statistically more likely to live in poverty and will often be unable to cope with the sanctions.

Additionally, I am very concerned about the precedent being set to punish people for having the "wrong attitude" when it comes to job seeking. It is imperative that the Government are clear about the intention of the scheme. If the aim is to incentivise work, I would suggest that there are better ways of monitoring how proactive people are being when in search of employment, rather than penalising them if someone determines that they are not looking hard enough. The truth might be that an unsuccessful passage into work might not be as a result of a lukewarm motivation but because of a lack of available opportunities to work.

People with a learning disability have very specific and individual support needs when seeking employment. With the increased likelihood of disabled people moving onto jobseeker's allowance come the increased responsibilities to ensure that these people are properly supported in getting a job and are not given the added onus of unfair sanctions or conditionality if they are unable to do so. Equally, there seems to be no detail about a complaints procedure in the event of this support not being available. Given the significant evidence of prejudice that befalls many disabled people when seeking a job, what assurances can the Minister provide that this will be adequately addressed in the scheme?

As I said before, my concerns arise out of a lack of clarification from the Government about the details of the scheme and I hope that the Minister will be able to allay my concerns by assuring me that disabled people, especially people with a learning disability, will not lose out under these regulations; but, frankly, I fear the worst.

Photo of Baroness Lister of Burtersett Baroness Lister of Burtersett Labour 8:30 pm, 10th May 2011

My Lords, being new to the House, I am no connoisseur of Merits Committee reports, but on reading its 27th Report over Easter, it struck me as being damning in its conclusion that the lack of information attached to the regulations was unacceptable. The noble Baroness, Lady Thomas of Winchester has confirmed that view.

I am rather more familiar with the reports of the Social Security Advisory Committee, having read many of them over the years. Its report on these regulations, to which the Merits Committee refers, is at the more critical end of the spectrum of SSAC statements. Its key recommendation was that mandatory work activity should not proceed. Nevertheless, it is proceeding on the basis of regulations deemed inadequate by the Merits Committee for their lack of clarity of purpose. As the committee underlines, these are important regulations, the effects of which could have serious implications for the livelihood of thousands of unemployed people. As we have heard, where sanctions are imposed, JSA will be withdrawn for 13 or 26 weeks and, if further primary legislation is passed, we could be talking about loss of benefits for 156 weeks for a third so-called offence from April 2012.

The evidence suggests that it is often the most vulnerable who are subjected to sanctions. Both the Merits Committee and SSAC comment on the ambiguities surrounding the scheme's purpose. The department denies any punitive intent, emphasising how the scheme is supposed to help customers develop behaviours and attitudes required to get and keep work, yet it is adamant that sanctions must be applied to those who do not comply. I do not find the department's response to SSAC's concerns very convincing. The velvet glove and warm words about support surrounding the iron fist of sanctions look rather threadbare.

I am reinforced in that view by my reading of a recent systematic review of international evidence on the impact of benefit sanctions published by the Joseph Rowntree Foundation. The review questions the efficacy of sanctions in changing claimants' motivation or attitude towards work. It suggests that although sanctions may have a short-term effect in shortening unemployment spells, the longer-term effects can be counterproductive in jobs and earnings progression. It is worth citing the report's conclusion:

"this report brings into focus the gulf between the rhetoric of welfare reform and the evidence of the effects of sanctions ... policy-makers continue to justify the extension of sanctions (and sanction-backed conditionality) on moral philosophy grounds while taking an ambivalent attitude to the evidence ... with evidence being marginalised by discussion of principles and what can be expected of claimants in return for benefits".

I fear that, in a moral crusade against the supposed welfare dependency, Ministers read the evidence through a distorting lens. As the TUC warned in its submission to SSAC, these regulations seem to move employment policy further away from an evidence-based approach. The SSAC report comments:

"The evidence on the efficacy of 'workfare' schemes is, at best, mixed", as the noble Countess has already pointed out.

Personally, I was unhappy about the previous Government's work-for-your-benefit proposal, but at least, as the Merits Committee notes and my noble friend pointed out, it was to be a pilot scheme with a clear evaluation plan aimed at examining whether mandatory work activity had demonstrable benefits. These regulations introduce mandatory work activity nationwide without any such evidence.

That makes all the more important the monitoring of placements to ensure that, among other things, participants are treated properly and are not used to replace waged workers. I am pleased that the department has accepted SSAC's recommendation on that point, and I would welcome more information from the Minister about the placement monitoring system. However, as the Child Poverty Action Group points out-I declare an interest as its honorary president- there are no guarantees of minimum standards that can be expected from employers. I regret that the department has rejected SSAC's recommendation that detailed guidance should be given to employers about placements.

My other main concern, which was also picked up by the Merits Committee and SSAC and was commented on by the noble Countess, is the question of discretion. The Merits Committee questioned how the scheme can be delivered with any degree of consistency given the degree of flexibility and discretion built into it. In its 28th report, drawing attention to oral evidence provided by the Minister for Employment, the committee observed that,

"The targeting of the Mandatory Work Activity Scheme is to be left almost entirely to the discretion of Jobcentre Advisers, and the Minister is sanguine that there will be local variation and a lack of consistency in the way that the Advisers apply their judgment".

That is just one example of how discretion is being extended in the social security system, and I find it worrying.

Flexibility sounds very positive, but its flip side is a lack of clear rights and the danger of arbitrary and inconsistent decision-making and lack of transparency. Moreover, the JRF review suggests that the administration of sanctions is not rational or equitable and can lead to bias, including racial bias. Important decisions with implications for a claimant's livelihood will be taken on the basis of what SSAC refers to as the

"views and opinions of the personal adviser"- views and opinions about attitudes and motivations that will require considerable skill to interpret correctly. I would be grateful if the Minister would tell us about the kind of training that advisers will receive to make these decisions, and whether all advisers will have received this training by later this month when the scheme is introduced.

Will the Minister also clarify the department's response to SSAC's recommendation that,

"detailed information is provided to potential participants about the criteria for selection"?

In its response to SSAC's report, the department says that it accepts the recommendation, but in explaining how it accepts it the department does not state explicitly that potential participants will be told the criteria for selection. I would be grateful if the Minister would confirm whether they will be told.

Another extension of discretion lies in the refusal to prescribe in regulations factors to be taken into account when deciding whether someone has good cause for failing to take part in the scheme when required to do so. This point was made by the noble Baroness, Lady Thomas of Winchester. The department's response to SSAC, namely that doing so risks limiting the circumstances in which good cause could be applied, again is unconvincing. Clear good-cause provisions in the regulations would provide a safeguard for claimants, without necessarily limiting the circumstances to those listed.

In conclusion, the Merits Committee complains about the vague and insubstantial basis on which we are expected to assess whether the regulations will achieve their objective. On the basis of research evidence, I fear that the regulations will do more harm than good. I support my noble friend's prayer that they be annulled, and the Motion of Regret tabled by the noble Countess.

Photo of Lord Kirkwood of Kirkhope Lord Kirkwood of Kirkhope Chair, Information Committee (Lords)

My Lords, the House owes a debt to the noble Countess, Lady Mar, for raising these regulations this evening. As always, it also owes a debt to the Merits Committee and the Social Security Advisory Committee for their excellent work. The debate highlights very important points, many of which have already been made.

The first thing that I will say relates to the initial observations about procedures made by the noble Lord, Lord Knight. I would support him in pursuing the clarity that we need to enable the House to demonstrate and exhibit displeasure to the department without necessarily seeking to completely torpedo and annul regulations. The Motion in front of us in the name of the noble Countess, Lady Mar, is well judged. It is not always a Minister's fault-indeed, I completely absolve my noble friend from some of the worst excesses of this order. However, we should have the ability to make it clear that if there is insufficient detail, and if we do not feel that it is safe to endorse proposals that are brought to the House by the department via Ministers, we should have a method of expressing that in a grown-up way, and we should be able also to test opinion in the Division Lobbies. I encourage the noble Lord to pursue that line of thought.

Secondly, my noble friend must have bigger fish to fry. I have spies everywhere and they tell me that this is an £8 million scheme. That does not mean that it is not important-there are important principles here-but he has much more important things to worry about, such as universal credit and the work programme, which are both crucial. I also understand that we have managed to get such a keen price out of the contractors that we have been able to double the number of places for the mandatory work activity scheme and are now thinking about 19,000. That raises questions about the quality of the schemes that will be provided. I have a calculator, and I can divide 19,000 into £8 million and see that it works out at something like £430 per four-week placement. These figures need to be confirmed; otherwise, we will all be confused. The point I am making is that, if we have four-week schemes that are costing £430 to provide, one wonders about the disproportionate sanctions referred to by colleagues earlier in this debate of £1,800 or thereabouts, being equivalent to 26 weeks' benefit at £67.50. There is a disproportionality about some of this, as well as the question of whether the quality can be delivered on a four-week scheme for £430. We need to keep this in context, but there are some really important questions that worry me about these regulations that are creating potential precedents. These deserve attention.

First, if I understand it right, contributory JSA benefit claimants are covered by these regulations. Contributory benefit claimants are different from means-tested JSA benefit claimants. They have been paying national insurance contributions to enable them to be entitled to this benefit, at least in the first year, before they go into the work programme, as I understand this scheme as it is going to be rolled out. They are going to be tapped on the shoulder by some Jobcentre Plus personal adviser and be told that they are going to be subject to the mandatory work activity scheme. People who make contributions through the national insurance system should be in a different place from those on a means-tested JSA regime. I would like the Minister to comment on whether that is correct.

I also worry greatly about the way we are potentially interfering with the well-established legal definition of "actively seeking work". The way I read this-and again, I would like to be corrected if I am wrong-being able to do just enough to satisfy JSA legal entitlement requirements is not going to be enough anymore under this scheme, because if you are only undertaking activity that is just enough to satisfy your personal adviser, you can still be mandated to be put on this mandatory work activity scheme. So I think we are stretching some of the well-established concepts. What people really clearly understand about "actively seeking work" has been built up over years in case law. We interfere with that at our peril, and I hope the department is thinking carefully about that.

I also concur with the comments made about adviser discretion, which is unappealable, to nominate candidates for this scheme. Obviously, the decision about a sanction is appealable and that is understood, but the noble Baroness, Lady Lister, was right to draw attention to giving discretion to advisers, as other colleagues have done in terms of local flexibility to contractors.

Part 6 of these regulations causes me some concern because I do not know that I have ever seen anything like this, but I may be wrong. Part 6 talks about "contracting out certain functions in relation to the scheme". If we are starting to contract out certain functions of the scheme-I understand that does not include sanctions-that is new territory as far as I am concerned. We have to be very careful about what Jobcentre Plus staff and personal advisers can do, as well as some of the providers of these schemes.

Local flexibility for contractors raises questions about quality, and I agree with them. I think there are disproportionate levels of sanctions, and I agree with my noble friend Lady Thomas of Winchester about good cause suddenly being undefined. Good cause has always been defined ad longam in legislation before. I understand that the department is suddenly saying, "Let's look at it. Let's be more flexible because we can deal with clients better", but I remain to be convinced about that. That is one of the biggest omissions in terms of the department's inability to persuade people that we have enough information to take sensible decisions about these regulations this evening.

Benchmarking was mentioned by the noble Baroness, Lady Lister of Burtersett. The guidance should be public. Although it may be technical, I understand that it will be searchable under freedom of information, and if it is, I do not know why it has not been made public. It will be kept within the department unless people ask for it. Benchmarking and targets become interchangeable, and staff in Jobcentre Plus offices will start making sure that they achieve the targets. I do not think they have been worked out. I am not convinced that we have had enough discussion about when a benchmark is a target and when it is not. There are all sorts of problems in some of these things.

Finally, coming from a rural area of south-east Scotland, I am really concerned about how transport costs and childcare costs are dealt with in rural areas. My honest opinion is that the £8 million would have been better spent on training schemes, but if we are going to do this, we are entitled to seek more detail. I think that as things stand, these schemes are of doubtful value. The sanctions are very severe, and I will need some persuasion by the Minister not to support the Motion moved by the noble Countess, Lady Mar, if she presses it to a Division this evening.

Photo of Lord Freud Lord Freud The Parliamentary Under-Secretary of State for Work and Pensions 8:45 pm, 10th May 2011

My Lords, thank you for giving me the opportunity to clarify the objectives of the mandatory work activity scheme and to explain further how the scheme will operate.

Before I go into that, I want to say that the department takes the concerns raised by this House very seriously. The concerns raised here and by the Merits Committee tell the ministerial team in the department that something has gone wrong. I am aware that this is not the first time in this Session that the department's instruments have been called to the attention of this House, and we find that very serious. The full ministerial team is in agreement that providing the Merits Committee and the House with all the necessary information is of central importance, and we all regret-I particularly regret-any occasion when the Committee felt it received inadequate information. We are working hard to improve on this. We have arranged for senior officials to meet with the committee's advisers this week in order to take a serious look at how we are falling down, and they will work with the committee team to ensure that the House is in future supplied with all necessary information. I can assure noble Lords that I am going to make sure that there is a process in the department that makes sure that the right information goes to the committee. This will not continue in this way.

Let me now offer some assurances about this particular instrument. The mandatory work activity scheme represents a new approach. I understand why some noble Lords feel that we should have conducted a pilot before introducing the scheme nationwide. Such an approach may have been the norm in the past, but there has been a change of philosophy in this area. The problem with small, limited pilots is that in the mean time they leave you with a moribund system. Central to the new philosophy of the department is that it is best to provide the freedom to allow initiatives to flourish into success. That is what the structure of the work programme is designed to do. It provides our own staff with the freedom to innovate. Advisers are given greater flexibility to make decisions on what help an individual needs in order to find work. It is one of a range of available support options that can be considered.

The budget is set by a central contracting process, but it will up to Jobcentre Plus to decide whether to use it and in what numbers. It will depend on whether there are claimants in a particular Jobcentre Plus area whose characteristics suggest that they would benefit from this intervention. Contracted providers will not be paid for places we do not use, so there is no incentive to use places that customers do not need. My noble friend Lord Kirkwood's maths on his calculator is more or less spot on. We have the money for up to 19,000 places costing £8 million, which on the calculation of my team in the Box comes to £421. That is close enough to my noble friend's answer of £423. How he got that discrepancy suggests that it is obviously a Hewlett Packard calculator.

It is important to recognise that we are not undertaking this work without assessing its place in the wider picture. We intend to learn from how mandatory work activity is used and what impact it has on the customers who are referred to it. I shall come back to precisely how we plan to report to the House on that.

I should also like to take this opportunity to address some of the other concerns that have been raised in the debate. It is vital to recognise that this support was asked for specifically by Jobcentre Plus personal advisers themselves. After all, they are the people best placed to understand what help those struggling to find work really need. During the summer, ministerial colleagues went out, listened and gathered opinions from Jobcentre Plus advisers. The consistent message was that they wanted a tool like this to engage a particular group of people. So the introduction of the mandatory work activity programme has been driven by the grass roots. The programme is aimed at a particular, rather small group of people who have become disengaged and stuck in a rut in their search for work. By getting them involved in mandatory work activity within their local communities, the aim is to give them the confidence they need to approach finding employment proactively as well as the basic disciplines that any employer would expect.

The noble Lord, Lord Rix, was particularly concerned about people with learning disabilities. We aim to replicate all the existing protections in referring people. JCP advisers are not looking for customers in this group. Equally, I shall pick up the concerns of the noble Countess, Lady Mar. Customers in poor health are absolutely not the target group for this scheme, which is aimed at those whose key barriers to work are the disciplines of employment. We know that every customer's circumstances are different. As much as possible, we are giving discretion to Jobcentre Plus advisers on when to refer customers to mandatory work activity.

Although we are not being prescriptive, we are providing guidance to JCP so that it can provide a framework and achieve continuity of approach across the country. The guidance will indicate the type of characteristics that we expect claimants who benefit from this provision to display. As a department, we are choosing to trust those who have day-to-day experience of working with jobseekers. They are, after all, the people who are asking for greater freedom in how to help customers.

The noble Lord, Lord Rix, was concerned about the complaints procedure. A clear, independent complaints procedure exists through the independent case examiner. If providers are at fault, a hefty fine will be attached. The noble Countess, Lady Mar, expressed concern about trickery and quoted from an article in the Guardian. I can assure her that there are no targets in place to deliver sanctions, either in JCP or among providers. The noble Lord, Lord Knight, was concerned about costs. We have taken on board the recommendation of the SSAC that we pay childcare costs. Lack of suitable childcare is good cause for failing to attend. Therefore, there would be no sanction. We also pay transport costs under the programme. More detailed guidance will be available to JCP advisers. The guidance will be internal for them, so it would not make much sense to publish it.

We have now completed the procurement process and are able to discuss the suggestions of those who participate in the scheme. That may be helpful in clarifying how mandatory work activity will help customers as they look for employment. The noble Lord, Lord Knight, and the noble Baroness, Lady Lister, said that research shows that workfare is not effective. We must make it clear that this is not workfare; it is a short, supportive and personalised programme. That is why flexibility is built into it. The noble Baroness said that that can be looked at in two ways, but the intention here, given the brevity of the programme, is to be supportive.

We have not asked contracted providers to give us details of every placement, but, as an example, several organisations have suggested that they will place people with charities that renovate old furniture to be used in social housing or by low-income families. The noble Baroness, Lady Thomas of Winchester, spoke of benefiting the community. Examples of placements include improving local green spaces, improving community cohesion by working with excluded groups, maintaining cultural spaces and helping the development of social enterprises. Our aim is not only to provide visible benefit for local communities but also to give people the chance to develop skills that they can take forward when looking for work in the future. Most importantly, they will be expected to turn up for work every day for four weeks. They will be expected to work with their colleagues and to complete tasks that they have been set in a timely way.

In response to the concerns of the noble Baroness, Lady Lister, about placement monitoring, we will monitor placements through direct relationships with providers. It is clear in the contracts that placements must not replace current or future employees. We are seeking in this programme to instil essential work disciplines. Research with employers has consistently shown that they value such characteristics highly. A short experience of the workplace can help that development.

My noble friends Lady Thomas and Lord Kirkwood were concerned that there was no indication about how we would operate good cause. We will explicitly include good cause in the guidance in a similar way to that in other regulations. The noble Lord, Lord Knight, was concerned about there being no appeal for mandation. The decision to refer is an administrative decision subject to judicial review if it is unreasonable.

I thank noble Lords for allowing me this opportunity to try to explain these regulations more than we seem to have done to the Merits Committee. I hope that I provided some enlightenment. I recognise that some noble Lords hold deep concerns and I respect and acknowledge those. But in response to those concerns, I assure noble Lords that as well as monitoring the management information generated by the scheme from day one, we will be conducting an impact assessment in November 2012 to assess how mandatory work activity has changed outcomes for individuals.

On top of that, we have set aside £150,000 to conduct external independent research in February 2012 to learn about the experience that customers have while on the scheme, and the difference that it makes to the approach that customers take on their job searches. That will report in summer 2012. Any decisions about the future of the scheme will be based on the outcome of those reports. In order to ensure that the House has the opportunity for further scrutiny of any future changes, I commit that these reports will be laid before the House and noble Lords will be alerted that that has occurred allowing for further debate at that time. I hope that those offers are satisfactory and I urge noble Lords not to press their Motions.

Photo of The Countess of Mar The Countess of Mar Deputy Chairman of Committees, Deputy Speaker (Lords)

My Lords, I am grateful to the noble Lord, Lord Freud, for going to so much trouble, and I have no doubt about his sincerity. I doubt that any noble Lord in this House is completely against these regulations. We agree that some people need to be offered the discipline of work. But we are not happy about the sanctions and the noble Lord has made no effort to justify these draconian sanctions-they are very severe.

I am very grateful to all noble Lords who have taken part. I will not go through their speeches individually because I know that everybody is hungry and will want to go to dinner. I am not satisfied despite the Minister's efforts that he has filled in all the gaps. We have a statutory instrument before us that is not clear and I wish to test the feeling of the House.

Division on Countess of Mar's Motion

Contents 122; Not-Contents 155.

Countess of Mar's Motion disagreed.

Division number 5 Jobseeker's Allowance (Mandatory Work Activity Scheme) Regulations 2011 — Motion of Regret

Aye: 120 Members of the House of Lords

No: 153 Members of the House of Lords

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