Good afternoon everyone. I welcome the witnesses, one or two of whom have probably given evidence before. For those who have not, I will say what I said this morning. There is nothing to fear; Members of Parliament are here simply to gather evidence from you. We hope that you will relax and enjoy the afternoon. Will you please introduce yourselves?
Q51 The Chairman: Excellent. Going from my left to right, will you now please each give us your general observations about the Bill? There are a lot of witnesses, but you may take as much time as you like, because parliamentarians will listen to what you say and your comments will spark various questions.
Fiona Weir: We have a wide range of concerns about the Bill, a number of which come from our perspective as a single parent charity that not only inputs into policy debates affecting single parents, but is very much a provider of employability training. A huge amount of what we do is about trying to get single parents back to work. Our concerns are focused on a number of main areas, one of which is how to get the right balance between the parenting responsibilities that parents have, and their need to get into a job and to obtain help to get their family out of poverty.
A second area of concern runs through parts of the Bill. While we agree with the thinking around getting children out of poverty, and while we very much welcome the Governments commitment to that, it is very important to ensure that work really is a route out of poverty. Several aspects of the proposals give us concern that single parent families will not find a route out of poverty, but will instead join the ranks of the working poor, or will face problems such as cycling in and out of benefits or low-paid jobs, with detrimental impacts on their families. We are alsopartly from our own experience of what works, and partly from our respect for much of what has been achieved in the past decade to get lone parents into jobs and to improve the employment rate significantly, which has happened through a mixture of incentives and the removal of barriersvery concerned about the shift from incentives towards an approach that is very much based around compulsion. We have particular concerns about the impact of sanctions, in terms of both the hardships that they would cause to families that are already vulnerable and at severe risk of poverty, and the kind of discretionary powers that are to be given to advisers. We think that they could be detrimental to building the kind of relationship that is needed if you are going to encourage people back into work. We also think that they could create a real risk of unjust and inconsistent approaches. Those are our main concerns, in top-line terms.
Eddy Graham: The Child Poverty Action Group shares a lot of Gingerbreads concerns. The first thing to talk about is the format of the Bill. We said that it was not so much skeletal as invertebrate, in that it grants an awful lot of powers, such as for the Secretary of State to abolish income support for any group of people if he considers it expedient or necessary. What is expedient might not be necessary or wise, and we are concerned about the Secretary of State taking a power to remove the entitlement of vulnerable people to claim income support before we know what system will replace it. The powers that are being granted and the lack of draft regulations, unlike with the previous Welfare Reform Bill, for which extensive draft regulations were published, cause some concern.
Much of the Bill is about increasing conditionality on claimants, lone parents, and sick and disabled people, yet there is nothing about benefit adequacy. We are primarily concerned with the eradication of child poverty, but simply increasing conditions on benefit claimants on its own will not meet the 2020 target. There is nothing in the Bill about increasing benefit adequacy so that claimants who are forced to claim benefits for long or short periods can live on a reasonable income. We are opposed to increasing conditions on people for an insufficient level of income.
On the extension of contracting out, although the Bill does not remove any benefit claimants rights to appeal, it does move them one step further away. It places more decisions and directions in the hands of contractors and will leave claimants with less to appeal or complain about. It is not clear from the Bill what claimants will do when they have disputes with contractors about the action plans that they are drawing up or directions that they do or do not want. The Bill retains the right for claimants to appeal against benefit sanctions, but a lot of decision making takes place before that. We are concerned that, in effect, there is an eradication of peoples right of appeal.
Tim Nichols: I would like to add just a bit to what Eddy said. I want to make it clear that CPAG very much supports the potential that work can have as a route out of poverty for parents and children, provided that it is high-quality, well-paid work. We certainly would not want our criticisms of the Bill to be misunderstood as opposition to that in any way, but we have concerns about the effectiveness of the approaches being taken and about the Bills impact on children.
Financial sanctions on a family will have consequences for the children in the family. There are potential conflicts between some of the possible directions and parental caring responsibilities, and we are also concerned about the potential of the welfare to work agenda to drive child care strategy too much.
We think that the needs of children have to trump everything. The Governments child care strategy has to be at the top and other things must follow it. In terms of effectiveness, the Bill leaves claimants with very little ownership of the process of gaining employment support. The large majority of claimants want to get into decent work. We would prefer to see a system that nurtured that ambition much more and worked in a more positive way with that potential, and that is part of the reason why we are one of the organisations that has suggested that this is an opportunity perhaps to look at ideas around a claimants charter so that a claimant would feel that they had an entitlement to high-quality, personally tailored support, rather than it being something imposed on them through a quite bureaucratic sanctions regime. As somebody who was once a long-term benefit claimant and experienced the new deal, I know that no matter what things look like on paper, the feelings that you have as a claimant and your personal experience of the process as it plays out are extremely important to its success.
We have concerns about the amount of time that is being given for consideration of the Bill in Committee. After the evidence sessions, there will be only six sittings. I believe that there were 12 sittings for the last Welfare Reform Bill. Given how much will be left to regulations, we are not sure that there is enough time really to scrutinise the Bill.
Martin Narey: I have sympathy with much of what has been said, but Barnardos takes a somewhat different view. It is important that that view is not caricatured; we are not suggesting that the vast majority of people who are unemployed or out of work do not want to get into work, but we believe that many of them need help and assistance to get into work. We do not shy away from the fact that a small minority needs pushing into work. We have some sympathy with the conditionality aspects of the Bill, particularly the emphasis given to getting those on long-term and incapacity benefits back into work. I say that on the basis of not only my experience running Barnardos, which works with about 120,000 children and young people, but, and perhaps more significantly, my previous experience running the Prison Service.
When working with offenders, which I did for 23 years, I was constantly struck by the worrying number who believed that the world of work was simply nothing to do with them. They came from families with parents who had not worked. Indeed, there is some evidence now of young people in families in which work has not been a factor for three generations. Work can provide a route out of povertyalthough not always, and it is a real problem that 60 per cent. of children living in poverty in the UK have one or both parents workingand it also improves self-esteem and self-worth. A child growing up in a family in which one or more parents work is much more likely to think that the world of work, a potential career and getting on in the world is something to do with them. The number of young people in the UK who think that jobs and careers are things that people like us do is a real worry.
I would like to ask about the position of lone parents with younger children, which is a very important aspect of the Bill. We will perhaps start with Fiona and Kate. You have seen the Governments proposals, which were set out in response to the Gregg report, on how they see the parents of children under the age of seven in a progression to work group. After the children are seven years old, the parents will obviously move from income support to jobseekers allowance. Under this philosophy of progression to work, those with children under seven will be in a new group, and lone parents of children of three to six years old will be
Required to follow the full progression to Work regime based around Work Focused interviews, action plans, work related activity and the backstop of adviser direction.
How do you feel about that?
Fiona Weir: From our experience of working with single parents, we feel quite strongly that the vast majority want to work; in fact, nine out of 10 say that they want to work when it is right for their family. Usually, when you unpick that a bit, there are very good reasons behind their choices on work, and 40 per cent. of lone parents with children under seven are already in work. Those who are not working often have very good reasons: sometimes it is skills and confidence, sometimes a lack of access to the right child care, and sometimes a different set of barriers relating to the particular needs of the children. Fundamentally, what is required is a system that really provides support on skills training and building confidence, and good provision of child care, but that essentially leaves the decision about when it is right for the family for the single parent to return to work up to that single parent.
We have learned from our experience of what works that the relationship with Jobcentre Plus advisers can be extremely positive and supportive for helping a lone parent on the route to work. However, you take the element of trust out of that relationship if there is the potential to sanction that lone parent for not undertaking particular work-related activities. What constitutes a work-related activity in the Bill is wide open and it is also very unclear what would or would not constitute a reasonable sanction. You must consider the experience in the US. There, when an adviser has been given discretion to apply sanctions, an element of racial bias has often come into decisions, along with other issues. That all adds up to a system that, instead of working with the desire that many people have to get their children out of poverty and to get themselves back into workbecause they want the adult company, to be a role model for their child and so onsomehow becomes very distrustful and based on a small number of people, rather than the vast majority of people who want to take the right route for their family. It then becomes a system that is working not with people, but against them.
Fiona Weir: It is difficult to put a figure on the age, because if you look at the controls that are already in place, we are receiving calls all the time from families with children over the age of 12. That is because 59 per cent. of local authorities child care sufficiency assessments show that there is nothing there for children over the age of 12. Often, a difficult teenager is harder to deal with than younger children. A lot of them will have particular needs and parents will not want to leave them unsupervised over the summer holiday. Very different sets of considerations apply at different ages, and peoples children and their family circumstances are all different. Some families are very strongly affected by domestic violence, or the conflict that has been going on within the family. Really, you are in the realm of sensitive judgment calls and therefore you have to decide who is best placed to make those calls.
The key emphasis that we are trying to get in this Bill is a move away from the constant pressure of sanctions, the threat of sanctions, and compulsion. Instead, we are saying, Please build into it elements that are much more about encouraging people. For example, there are provisions to pay employment and support allowance claimants an extra premium for undertaking work-related activity, but why could not those provisions apply to single parents? Instead, we have an entirely unjust comparator, whereby single parents face the threat of sanctions, even though another claimant group has an incentive built in.
Similarly, a lot of the issues that we are raising are about simple measures that would make it easier for people to take shorter term jobsfor under 16 hours a weekby increasing the earnings disregard. Again, this approach builds on opportunities for support and incentives to take a different route, rather than an approach that is very much about telling people, without knowledge of their personal circumstances, what works best for them.
Kate Bell: We feel that the way in which the progression to work group is being conceptualised is adding complexity to the benefit system. It will consist of some disabled claimants who will be on ESA and, as Fiona said, they will be receiving an additional premium. However, there will also be this group of single parents who will be on jobseekers allowance, but without full job search conditions, who will still be subject to sanctions. Although the approach is principled, we think that it will add an extra layer of complexity to an already very complex system.
The point is that all the members of that group, whether they are people on ESA who may have a condition that inhibits them or a single parent caring for a young child, are on a journey towards work. However, you say that we must balance these other factors and take into account the age of the child. May I put the same general question about the age at which this measure applies to the Child Poverty Action Group?
Tim Nichols: We already know that lone parents are one of the groups that are most at risk regarding child poverty. If those families could be subject to sanctions on top of that, there could be a very damaging impact on them. We very much agree with what Gingerbread says about wanting to emphasise the positives and the incentives, because lone parents generally want to work and, we believe, are in the best position to decide when the time is right for them to do so.
We also have doubts about the extent to which it is possible to take some of the successful schemes that are working with voluntary organisations and to shoehorn them into the suggested sanctions regime. I discussed that earlier this week with a social enterprise programme that is successfully getting lone parents and partners into work and retaining them in work through a voluntary programme. One of the key things it does is to work extremely closely with employers. When you look at the barriers, you find that they lie with employers and with access to child carewe have already heard from Gingerbread about some of the big problems with access to child care. In summary, we think that the provision is a distraction from the real problems and that it also has the potential to do harm to lone parent families.
Tim Nichols: We think that that is too young. We do not want to have the argument about the age at which the sanctions should kick in because we think that that will take us away from the drive to address the real barriers and to work with the positive ambitions that are already in place with lone parents and that need to be nurtured, but if that argument is already taking place, I would say that as you go down the age groups, you get different kinds of concerns. For younger children, we are concerned that there are particular developmental needs in pre-school years, but for older children, we are concerned that, as Gingerbread has said, there are particular problems in the transition at secondary age. Those older children will be meeting a load of new life challenges and might have new problems to deal with, including serious issues such as coming into contact with drugs and alcohol or sexual activity for the first time. There can therefore be very good reasons why the parent might want to have the time to be there.
Martin Narey: I bow very much to Gingerbreads detailed grasp of the issues. Broadly speaking, I think that the principle of allowing a motherit is almost invariably a mothersupport and preparation for work when the youngest child reaches the age of three, with the expectation that she might work when that child is seven, is not unreasonable. The key factor is child care. Child care has to be available so that a mother can prepare herself for work and then, in particular, work afterwards. A single mother who is always worried about where her children are, about whether they are being looked after adequately, and about whether she will get back from work in time to pick them up will not be a very good employee, so the availability of child care, which is patchy, is absolutely vital. However, I think that the general principles of the Bill are reasonable. I frequently see young mums with young children who left school without qualifications and are essentially unemployable, but who are certainly bright enoughand could do so, with help and assistanceto become work-ready by the time the child is seven.
May I ask about clause 13, which deals with reform of the social fund? I would welcome your comments and the perspectives of your organisations about the effectiveness of the social fund in tackling and alleviating poverty. What shortfalls do you think it has, and to what extent will the proposed reforms, such as the introduction of external providers, meet the problems that you perceive with this part of the welfare system?
Kate Bell: We have long been concerned about the social fund. The main concern has been the lack of funding in the social fund and the balance between loans, which are controlled by a tight budget, and grants, which are available when people are facing genuine emergencies. Organisations have suggested a number of reforms, often jointly. A more grant-based system setting out defined moments of need that could be met through such a fund would be very helpful.
We have some concerns about the proposals to use external providers. First, we do not know exactly how those proposals would work. A consultation document was put out just before December, but the details of how the scheme would operate are still pretty sketchy. They follow on from a feasibility study conducted by KPMG, which said that it was very sceptical that any external providers would be willing to operate in this area without charging interest. You will all be aware of very serious concerns about interest being charged on loans to meet the essential needs of the most vulnerable people.
We are very concerned about this area of the Bill because we do not know what the implications will be. We are particularly worried about the provision that will allow Jobcentre Plus to restrict the availability of social fund loans when there is an external provider, partly because there is no detail about the conditions under which the external provider would provide those loans. We are grateful for commitments that they would not be interest bearing, but we do not know what conditions the claimant would have to meet to access one of those loans, and we are worried about the ability to restrict availability to Jobcentre Plus loans.
Eddy Graham: A great frustration is that CPAG, like other groups, has pushed for changes to the social fund for many years, yet various Governments have not done very much. Now that there has been a decision to take action, the consultationor non-consultationbefore Christmas was disappointing. The Bill itself talks only about contracting out to an external provider and includes a provision to supply white goods rather than give money. If the Government have decided to take action, it would be much better to look at the social fund as a whole. You could look at some of the research that has been done, as Kate suggested, into making grants at key stages in claimants lives, such as when their children start school and move to secondary school, and to deal with things that cause big increases on costs, such as moving home. You could consider expanding the loan scheme so that it is more generous and more money is put into it. In effect, the loan scheme is the claimants own money, because they pay it back.
On outsourcing to private providers, it seems a bit odd to privatise the social fund when the Government are nationalising part of the private banking system. We would much rather see a more generous scheme that would meet peoples needs. Although the social fund is inadequate, it is there as the last resort for some of the poorest people in the country. We would like the loan scheme to be made more generous, with eligibility enhanced. The whole system of eligibility for grants, which is more than 10 or 12 years old, needs to be looked. It should be widened to help people who are living on subsistence levels of income, often for long periods of time, who need access to the social fund for one-off costs.
Martin Narey: I am relaxed about the proposals for private sector providers. The real urgency is to provide avenues of affordable credit for poor people. As I visit our service users in Barnardos, I meet many families who, rather than getting loans from credit unions or the social fund, have gone to some of the other high street providers. I have in my bag the current application form of the Provident, which is the main company. The interest rate on its most popular loan of £300, with a weekly repayment of £15 a week, is 351 per cent. For families who already have virtually nothing, debt like that at such interest rates drives them into the most appalling situation. If something could be done on the availability of the social fund and if the grants system could be looked at, as Eddy has suggested, it could make things dramatically easier for some of our poorest families.
May I follow up what Martin said with the other two bodies represented? Martin put his finger on the problem of unaffordable credit, but what scope do you see for the social fund providing affordable credit? I know that you have spoken about grantsI understand the argument about grants versus a loanbut taking the issue that we are trying to deal with, which is unaffordable credit and the interest rates of 300 per cent. or 1,000 per cent. that doorstep lenders charge, do you see a role for the social fund in addition to providing a certain amount of interest-free lending, perhaps in providing the facility for low-cost credit?
Kate Bell: We have pushed for consideration of how the social fund could also meet the needs of people in low-paid work for a long time. Currently, it is restricted to benefit claimants, and the transition from being a claimant to being in low-paid work has been difficult. Providing affordable credit to low-paid and poor people is difficult and expensive, as every study has stated. We are keen to see proposals on how it could work, and there might be a role for an expanded social fund, but its first job must be to meet the severe needs that it currently meets. Then we need to take a good look, but that might not be possible in the time scale for this Bill. Our frustration relates to the wider issue of providing affordable credit.
Eddy Graham: CPAGs concern is about where the distinction would be drawn between an extension of affordable credit and what the social fund currently does: providing money to people on benefits to buy essential items. The idea of charging interest to people through an expanded scheme for renewing basic household items, such as cookers, washing machines and beds, which is what we worry that any expanded scheme might drift into, seems completely out of place.
There is no provision for injury time, so we have only until 5.30 pm with the present witnesses, but I shall ensure that all hon. Members who catch my eye can ask their questions.
Eddy Graham: I think I had finished my point, which was about extending loans on a commercial basis at a low interest rate. I reiterate that the social fund is for the neediest and poorest people, and we would not want the charging of interest to creep into loans for replacement of basic household items, which is what it is currently used for.
Martin Narey: I think that in addition to arrangements for absolutely basic itemsI agree entirely that as far as possible they should be provided freethere is a case for some sort of affordable credit. Many families, not illegitimately in my view, want to borrow money for things that are not essential. The Provident mailshot before Christmas was aimed directly at mothers, who were asked whether they wanted to provide a decent Christmas for their kids. Paying such an interest rate to do something that we all want to do is pretty sinful.
I am not being glib. I know that the default rate on such loans is very high, and my colleagues behind me have reminded me that in Scotland we have been looking at the possibility of Barnardos issuing loans, but we have calculated that to break even, without making a penny profit, the interest rate would have to be very high.
May I take you back to conditionality? There are two issues. In the CPAG evidence that you kindly provided for Second Reading, you said that conditionality is wrong in the current economic circumstances. The Barnardos memorandum shows that the current economic climate makes it even more important to promote work experience. So there is a difference of view there, which seemed to me to be encapsulated in what you said at the beginning about a difference in attitude to conditionality for lone parents as a whole, with the four at one end of the table being anti-conditionality and you, Martin Narey, if not being pro, then not accepting it as much of a negative.
Would you like to comment first on whether there is a polarity between you in terms of the acceptance of conditionality, and secondly, within that, on the relevance and the impact that you think the current economic circumstances have on the issue of conditionality?
Martin Narey, since you are the loner in this group, perhaps you might like to start.
Martin Narey: So I am a pariah here. On most things to do with child poverty, most of us agreed on the things that needed to be done and we all agree, I think, that most people who are not in work want to get into work and make a better future for their children, and we agree that they should be given all assistance. We simply differ on the following: I think that when help is not taken up and individuals refuse any assistance to get them into work, ultimately, in the peoples interests and those of their children, there is a case for conditionality to encourage them further.
The second part of your question was about the recession. I read the Second Reading debate and saw that mentioned a couple of times. The experience of previous recessions is that some people have drifted out of work for ever and have never got back into work. The fact that we are entering a recession and the fact that there may be fewer jobs does not mean that there is not a case for trying to get people who are persistently, long-term unemployed work-ready. We will not be in this recession for ever, but history shows that sometimes the damage caused in the recession means that you can never get people back into work when it is over.
Tim Nichols: I do not think that there is necessarily that much of a conflict. This can be overstated. As I reiterated at the beginning, we think that it is important to give people the support that helps them towards work. In the current economic situation, where the claimant count and the numbers out of work rise, you will see people who are a long way from being work-ready potentially being put in competition for a declining number of jobs.
First, there is a limited amount of resources to go round. Secondly, some of the people who we all want to see given work-related support can be quite a number of years from being job-ready, for example because of the circumstances of their life, the age of their children and particular barriers that they might face, which emerge when a holistic personal assessment is made of a persons needs. Certainly, during this time there is potential for them to be helped. You can do work with someone who is, perhaps, roughly five years away from being ready to contend and go directly into the labour market that will bring them, over the next couple of years of economic difficulty, to being three years away from that point. The question is not whether that work should be done, but what is the right and most effective way of doing it and whether stepping up conditionality is what works.
The Child Poverty Action Group would like to see investment in support. There are some good voluntary sector programmes that are getting good results, but we do not think those will work if they have to be put inside the red tape of sanctions bureaucracy that undermines the way in which the voluntary sector works and the trust relationships that are built.
Kate Bell: Like the CPAG, our view on this is evidence-based. We are interested in what works in respect of getting parents back to work. The Department for Work and Pensions published its own research last summer, saying that the impact of sanctions on single parents decisions about work was negligible. That research looked at the actual barriers to people taking up jobs, such as child care, lack of flexibility around working and difficulties with caring for children with disability and health issues. We have seen a big increase in single-parent employment over the last 10 years without the impact of sanctions. We do not think sanctions are the most effective way of achieving this change.
Fiona Weir: May I add to that by looking pragmatically at what is going on? A lot of experience shows that while the job entry rate for lone parents is very good, 29 per cent. of them are back on IS within a year. There is an issue about how to keep people in work. Similarly, while there has been a huge success with Government programmes such as the new deal for lone parents, there are barriers when you pursue a work first approach too strongly. You risk getting people into low-paid jobs rather than sustainable longer-term work opportunities. It takes the emphasis off skills building. You get into a risk of cycling where people go into a low-paid job, fall back out again, get into debt and suffer the consequent problems. There is a need to look pragmatically at how to support people along a path of working with their aspirations, building their skills and getting the work path right for their personal circumstances. We want something to work long term to get that family out of poverty, rather than lots of churning through a system that does not achieve that goal.
This question follows on from that last point on conditionality. I noticed as well, Mr. Narey, that you had said you were more in favour of conditionality. I wonder whether that is in favour of conditionality whatever the level of benefits. Or are you saying that the present benefits are excessive and therefore families could afford to lose a bit? Or would you be in favour if benefits were higher and the extra bit of benefits could be conditional?
Martin Narey: I certainly do not think there is an extra bit of benefits. I think our benefits are very low and families living on benefits, as well as some families with one or more parents in full-time work, are frequently in dire poverty, by any measure. There is a wider issue for the Government to do something about that. That presents formidable problems in protecting children if you are applying sanctions to benefit levels that are already very low. I have been critical of the Government many times in recent years, not least on issues of child poverty, but both in conditionality of benefits and the allied and important subject of conditionality for getting 16 and 17-year-olds back into work or training, the Government are grasping some difficult nettles that need grasping. We cannot allow young people to be damaged by decisions made very early in their lives or decisions made by their parents.
May I press you on that? I understand that some Nordic countries have conditionality but starting from a higher base. What happens to a family that is on the minimum when you take that away? Do they steal or do the grandparents have to pay?
Martin Narey: That is a very real problem and I do not have a ready answer. I am saying that in principle, despite those problems, the Government are right to look at conditionality because the ultimate prize is getting a family out of long-term poverty. We know the probability that a child brought up in poverty in a workless family will bring their own children up in poverty. The potential break in that cycle is worth exploring. Of course, you have to ensure that children are reasonably protected. Some people refuse to work. We cannot dodge that. Although I accept entirely that most people who are unemployed want to work, there are some people who simply do not want to and resist any attempt to get them to work. That is very damaging for them and it is appalling for their children.
May I ask the other groups how they would look at that? Would you accept conditionality if there were an extra element above the minimum that could be taken away?
Kate Bell: It is instructive, again, to make the comparison with employment and support allowance. The Government have said that there is a level below which adult benefits should not fall, but that they will pay an additional premium to those who take steps to get back to work. We reiterate that we are disappointed that that is not the approach that has been taken for single parents.
Responding to your question about what happens to people when they get sanctioned, the research shows that people have to borrow from family and friends. They often suffer from financial hardship and increased stress, neither of which are good conditions for moving back to work. Your point about the adequacy of benefit levels is very important.
Eddy Graham: The sanctions regime in the British welfare state has been directed at jobseekers allowance claimantspeople who are required to be available for work, who do not have health conditions and who are actively seeking work. It has now been extended to whole groups of people who have health problems and child care responsibilities, and lone parents. The impact of substantial cuts in benefit on those groups is bound to be greater than on those on jobseekers allowance, 80 or 90 per cent. of whom leave the benefit within six months anyway because they find other work for themselves or move into education or training. The impact on families, children and sick and disabled people is one of our major concerns.
You are right to say that a fair amount of cherry-picking takes place when new schemes are devised. The Nordic countries that have fairly comprehensive social insurance schemes that protect people from poverty ally that with a high level of conditionality. In this country, claimants are being asked to do more and more in worsening economic conditions for nothing elsefor benefits that still leave them below the poverty line.
Mr. Nichols, I think you said that if people are going to move into work, it must be well-paid work. Can you clarify or expand on that? Am I right to say that the minimum wage of £5.73 is not well- paid work?
Tim Nichols: That is not enough to lift an awful lot of families out of poverty. We believe that the current level of the national minimum wage is too low. We do not want to see a situation whereby, because of sanctions and conditionality in the welfare system, parents are pushed from of out-of-work poverty into in-work poverty in which they do not see any benefit to their income or to their family. All they get is a net loss of time, and as a consequence their set of attitudes to work changes in quite a negative way.
I should like to draw the attention of the witnesses to two other parts of the Bill. First, some proposals have been put forward on part 3 on the amendments on child maintenance. Specifically, the powers that the Child Maintenance and Enforcement Commission has to confiscate driving licences and travel authorisations have to be taken through the court process. Ministers contend that that is not effective and want to move to an administrative process. I am interested to hear each of your comments on that and whether you think that that would effectively achieve the end result, which is getting more absent parents to pay maintenance. If you broadly support that approach, do you think that any changes need to be made to the Bill as a result?
Fiona Weir: The first thing to say is that after all these years of trying to enforce better child maintenance systems, we still have a situation in which only one in three parents are receiving maintenance for their children, which is little short of scandalous and leads to a number of children remaining in poverty. The estimates show that if all the non-resident parents who were currently assessed as required to pay actually paid up, it would lift another 100,000 children out of poverty. It is important to understand the vital importance of stepping up enforcement.
Having said that, and while we are strongly supportive of giving CMEC a lot more enforcement powers, it will be extremely important for the Committee to examine very carefully how the administrative changes would work. It will require very scrupulous measures to examine the issue of wilful and culpable neglect by the non-resident parent and it will be necessary to be really sure about the transparency of the appeals process so that the non-resident parent affected has proper warning and opportunity to appeal against the decision should they wish to do so. The reason that is so important is not just because of the obvious issues of fairness and so on; if there is a backlash, a sense of unfairness, it will be counter-productive as we step up the enforcement powers. It is important that we do not create a sense of there being martyrs when the problem that we are trying to tackle is that of people who are not contributing to their childs upbringing. Being sensitive to the need to get that right is important for the Committee as it looks at the fine detail.
It is also important to consider some other things. The evidence shows that where it is safe, it is in the interests of children for both parents to engage. If a non-resident parent needs their car to see their child, it is important that you do not take away their driving licence. Getting that kind of detail right is important. We also urge the Committee to look at extending the review period of 24 months that applies to the driving licences to the provisions for passports. The motivation behind the Bill is well driven and there is much that we are supportive of, but getting the details right is crucial.
Before I ask the others to commentperhaps they can comment on this piece as welldo you see any evidence from the work that you do with families and both, if you like, the remnants of the Child Support Agency and the new cases dealt with by CMEC that the accuracy of the assessments is such that the enforcement powers would be used accurately and that the right people would be targeted? Do you have any sense of that having improved?
Kate Bell: These processes are being used as an absolute last resort. A long process of enforcement will have taken place where the non-resident parent will have had multiple opportunities to say, I think my assessment is wrong. We are seeing these as a last resort, but once the process has been followed, we think that we probably need some kind of backstop there to say, You have an obligation and you need to pay maintenance.
Tim Nichols: The Child Poverty Action Group has less knowledge and expertise in this area than Gingerbread, so I will be brief. We do not really know enough about the accuracy of assessments to comment. We believe that improving enforcement is important because of the potential that that has to lift more children out of poverty. We recognise that that might require new and stronger powers for CMEC. We urge caution in consideration of the specific proposals on driving licences, on the grounds that it may have an impact on child contact with a non-resident parent and on the livelihood of a non-resident parent.
Martin Narey: I am afraid that I am going to break the consensus a little again. I have spent a lot of my time visiting our 400 projects around the UK. I was in a Sure Start centre on Friday and saw there what I always see: mums by themselves bringing up two or three children in the complete absence of the father. There is a complete absence of any contribution from the fathereconomic or emotional. I would be very hard-line on bringing those fathers to account, both to make them fulfil their responsibilities to the children and to discourage future fathers from behaving fecklessly and irresponsibly and leaving young mums in the lurch.
The second area that I wanted to touch on was part 4 of the Bill on birth registration. I want to get a quick sense of whether you think the provisions in the Bill will be effective in practice in encouraging fathersthat is whom it is largely aimed atto take more responsibility, both in acknowledging their role as the father and in contributing.
Kate Bell: We are concerned about part 4 of the Bill. We are obviously extremely keen to see fathers involved in their childrens lives as much as possible, but although the problem of sole registration is small and declining, we do not think that the best way to achieve greater father involvement is through legislation. Some research by the DWP indicated that the decision was often being taken long before that point and was very much dependent on the kind of relationship that was going on at that point. Although we would very much like to see programmes and projects to promote early involvement during pregnancy, for example, we have some concerns about the effectiveness and feasibility of doing that through legislation.
One particularly concern we have is that single parents who feel that it would be unsafe to put their former partners name, or that of the father of their child, on the birth certificate be protected. A proposed clause in the legislation states that such parents will be able to exclude themselves from the joint birth registration proposals, but we need a bit more detail on how exactly that will work and the kind of evidence they will have to provide in such a situation.
I wanted to focus on responses in terms of the Bills effectiveness. My reading of the BillI am sure others will correct me if I am wrongis that it is actually weak in terms of the compulsory element, because simply not knowing the fathers whereabouts is a sufficient reason for the mother not to put his name down. To be honest, I am not entirely sure that will make a terribly big impact on registration, but let us assume that it will. I just wanted to focus on its effectiveness, so your response was very helpful.
Mr. Nichols, may I take you back to something you said earlier? You said that there could be developmental issues, with children as I understood it, or problems with teenagers, that prevent a parent of young children from preparing for work. Will you elaborate on what those problems might be?
Tim Nichols: For the earlier years, more and more is being learned about the specific caring requirements of very young children and the key developmental stages and neurological development that they go through in terms of things that can have a potential impact right into adult life. That makes it of great importance that parents are able to provide a very high standard of care. If they decide that providing care themselves is the best standard, they should be left in a position to do that.
We are not convinced that there is a capacity of very high quality child care for younger children, where the ratio of carers to infants is of a sufficient level to meet some of the concerns that are being expressed. It is a difficult area, because the scientific evidence is still emerging, but it is such that we would have concerns about entering into a situation where parents did not have those choices.
First, the scientific evidence is far from conclusive, as I think you would agree. Secondly, we are talking about single parents going to work when their children are seven. I have two questions for you that follow from that.
First, how are the issues you are raising different in developmental terms for children with single parents as opposed to those who are fortunate enough to have two parents present? Secondly, once children are at schoolat seven, they should be quite settled at primary school because they will have been there for two yearshow does a parent not being at work affect their development?
Tim Nichols: But it is not clear to us how much time that would take up, or what the conflict could be with what the parents feel are their parental care needs at the time. It is one area that is difficult because we have not seen draft regulations and do not know exactly what the activities might be.
Most do not have a choice. Firms that keep in touch with staff who are on maternity or paternity leave, to keep them in touch with the workplace until they are ready to go back to work, are considered to be following good practice, are they not? So why do you feel it is wrong to have a system that keeps single parents who are not working in touch with the world of work until it is time for them to go back to work?
Tim Nichols: That is not the argument that I am making. My argument is about choice and about people not being put into a regime whereby directions are given and people are subject to sanctions. We support access to work-related activity for people whose youngest children are down to that age levelor, indeed, any age level; I do not think an age level is specifiedand we would support having much stronger entitlement that people can pursue to make use of work-related activity, but we do not think that compulsion is necessary or desirable.
Tim Nichols: I do not think I would make an argument that they should not take steps. I would argue that, in terms of effectively progressing people along the road back into work, this system of compulsion is not the most effective. I would argue that some programmes out there are working very successfully using outreach work, for example. Instead of using compulsion to bring a parent into an office, to give them directions about what they should be doing, they take a friendlier approachknocking on doors, but not using compulsion, and talking about the whole range of challenges that people face and when they would like to go back to work, as well as looking at that whole path.
The evidence that we were given earlier suggested that most single parents would like to get back into work, and we all accept that. The difficulty is with those who will not engage with the system. What would be your answer about them? Should we leave them and their children in workless families, with the effect that will have on their children as they grow up?
Tim Nichols: I think it is a mistake to believe, if people are pushed through a bureaucratic system, and people are checking things in a certain way and ticking boxes as they go through, that those people have genuinely engaged with that system. You can give all the appearances of doing that, and you can get reports that give that appearance, which will go to politicians and Ministers, but my experience of going through such a system is that the reality of someone being engaged with it, even if they are sat there and all the forms are being filled in and all the boxes are being ticked, is something very different.
What we generally see, in the whole direction of welfare reform, is an overall idea about how people are motivated and how you work with peoples psychology. That is very much about giving them pushes, rather than nurturing their motivation. If you look into areas of social research and social psychology, you will find that extrinsic motivation, which comes from outside, which could be perceived as a threat, is less successful than techniques that nurture intrinsic motivation.
I wanted to come back to joint birth registration, about which the witnesses have not had much to say. I want to explore it a bit more from the angle of the rights of the child. It seems to me that regardless of the fathers background, and even in situations where a father is violent and it may not be desirable for him to have contact with his child, it is a fundamental right for every person to know who their biological parents are. Wherever possible, we should try to achieve that. There is extensive research about the importance of such knowledge; for example, research on people who were adopted, some of whom want to find out who their parents were. Therefore, I am a little surprised that you seem to be as hands-off as you are on the question.
Mark Harper asked about the effectiveness of the legislation and whether it would work, but I want to push this a little further. Is it intrinsically important to children that they have written down somewhere who their parents are?
Kate Bell: Basically, our objections to the legislation stem from the effectiveness principle. We do not think that the legislation will be an effective way of achieving the laudable aim of ensuring that all children know who their parents are, and of safeguarding both parent and childthere may be real dangers to both mother and child from contact with the father. We do not feel that the legislative process will necessarily achieve the aim. It will have an impact on parents and children but will be difficult to put into practice, and that raises some concerns.
One thing that we have been thinking about is a situation where the mother says, Yes, I would like the fathers name on the birth certificate, and the father is written to but makes no contact, and that delays the joint birth registration. We do not know what will happen to the child benefit application during that time, because a birth certificate is needed to apply for child benefit. Our concerns about this section of the Bill are pragmatic, but those pragmatic concerns are what will impact on families.
I perfectly accept that you may want to say that a convicted paedophile who has a child and is deemed to be extremely dangerous to children should never have contact with the child while they are a child. None the less, it does not mean that the name should not appear on the birth certificate, however difficult that information is. It is what follows that matters. I am somewhat surprised that there is not a bit more thinking on some of these issues and how we might achieve that desirable outcome while safeguarding children.
Kate Bell: We are talking about evidence and the publicity around the benefits of joint birth registration. We have been doing some work with the Department for Children, Schools and Families on a campaign called Kids in the Middle, in which we have looked at programmes that promote better relationships between the parents of a child, whether they are together or apart, and ensuring that they are both involved in the childs life. We think that those programmes will make much more of a difference, and they are where we would like to see investment and energy going.
Do you not think that stating in legislation what we should aim to achieve will begin to change the view in society? Instead of saying that something is okay, that it does not matter, society will say that it is important to have both the names on the certificate.
Martin Narey: Anything that will encourage fathers involvement with and responsibility for their children is to be welcomed. I am afraid that I just do know enough detail and I am unable to offer the Committee any advice about how it might be administered, but we are certainly not opposed to the principle.
I have a couple of questions for Mr. Nichols, although some were covered by my colleague Helen. You said that introducing any kind of conditionality for single parents of children as young as three was at too young an age. Could you amplify your reasons why?
But you understand that the directions would only be to implement an action plan that the parent had already agreed to, and that the White Paper makes it clear that there would never be a direction that forced a parent to work if their child were under seven, or to put the child into child care that they thought inappropriate? Do you accept that?
Have you read the White Paper? Are you and your organisation aware that the directions would apply only to an agreed action plan between the parent and the adviser and could never force a parent to take up work or to put their child into inappropriate child care? I am asking you whether your organisation is aware of that.
Tim Nichols: That is too general a question. If I am going to give a simple yes or no, I shall need to know the specific circumstances. Scientific evidence details and outlines the pattern of care, how many children are being cared for at one time and whether the situation involves group care or parental care; scientists will look at the pattern of that parental care. If I answer a question in that way, I do not think that it can be meaningful in respect of the scientific evidence that I have read.
I am sorry; I was simply quoting a phrase that I thought you had used. Perhaps I shall ask a blunt question, if I may. Do you think that our proposals will damage the neurological development of children?
Time is pressing, so I shall move on. You said that lone parents who move into work do not gain anything in terms of income, and that all they gainI wrote it downis a net loss of time. Could you explain what evidence you have for that?
Tim Nichols: I said that there is potential for lone parents to move into work but to gain little net benefit in income, because a transition into work does not necessarily mean a transition out of poverty. On the better-off calculation that a jobcentre provides, some costs are not taken into account, such as the transport costs of taking a child to child care in one place, getting to a job and then returning to the child care. So, the current calculations are not robust enough to convince us that people will definitely be better off. We worry that they will go to work and lose time with their child, but not be left in a financially better situation.
Order. Sadly, I have to halt proceedings there. It has been a very interesting session. I thank all our witnesses for their time and for their contributions.
Professor Gregg: I have not read the Bill, but I wrote something that it was, supposedly, based upon. As an opening statement I would like to say that the ideas here are part of something that has been developing over the past 10 years or so, by which I mean the activational objective of taking people who are relatively inactive, or not searching for work, and moving them into an engaged situation to raise activity. That strand has been developing for 10 or 12 years. The new element, which is the part that I feel has not received enough attention, is marrying that, for the groups that are not job-ready, with the advocacy element of sitting them down, talking about what they want, where they want to go and what needs, supports, and capabilities they have, and trying to design an intervention that helps them to make the journey that they would like to engage in. That draws a little on other areas of welfare reformpersonalised budgets for the disabled in social services. It is trying to bring those ideas into welfare to work and say, Let us engage with you as an individual, rather than having a rules-based system of saying, You have to do this or You have to do that, which is the traditional model for the job-ready jobseekers, but does not fit for those who are not job-ready. We need a subtler approach that is more about engaging with the individual, talking to them about where they want to go and then trying to deliver it, which has a parallel with advocacy. In a sense, I would like to lodge that as an opening statement because it tries to bring those two parts together and I want to make sure that that has got through. I feel that that second part was often missed in some of the discussions that I overheard. I am happy to leave it there.
I just wanted to touch on two things in your report. The first is about what age a child has to reach before single parents are expected to move into or prepare for work, which was probably the most publicised bit and I do not know whether you were happy about that. They are your progression-to-work group, and I would like to touch on the extent to which you felt that sanctions and compulsion was appropriate for parents of children of those ages.
The second extract is your recommendations, which are partly taken up in the White Paper and the Bill, about the funding models of welfare to work and about the split between annually managed expenditure and departmental expenditure limit; using benefit savings to fund programmes.
I will begin by addressing the first point. I was not entirely clear about something in your report on the progression to work group. What was reported was that you had said that parents of children as young as one would be expected to take part in activity to prepare them for work at a later date. I was not quite clear about something. I think you said that parents of children between one and three would be in a more relaxed category. I was not quite sure about that. Perhaps you could elaborate on that, so that the members of the Committee are clear about your views, what you said in your report and the extent to which that may or may not have informed what is in the Bill.
Professor Gregg: What is going on here for people with younger children is not a case of, You have to look for work or you have to take that job. It is a case of engaging them in a discussion to ask, When would you like to return to work and what do we need to put in place for that to happen when you are ready? To use a phrase that somebody else used in the discussion, it is a case of, When you are ready, lets make sure you are ready, so that we have dealt with the basic skills problems and any other problem from the range of potential problems that an individual may have. Consequently, when they are ready to make that transitionI do not mind if it is when the child is three, five, seven or younger, because that is up to the person in discussion with the benefit adviser or providerand they feel that it is right to go back to work, part of the agreement with them is that we have dealt with the underlying issues. So we do not just wait until the child is five or seven and say to the parent, Hey, you have basic skills problems, lets deal with them now; we should have got that out of the way first.
So that is the position, in my head. The idea is not to say, You have to look for work or you have to do this. Instead the idea is to say, Lets set out the timeline that is right for you. Some people will elect to go back to work while their children are relatively youngone, two, three or whateverwhile other people will say, This is not right for me; I want to go back to work a bit later. However, we must ensure that the problems and barriers that they will face after being out of work for some time are dealt with by the time they are ready to start that process.
For me, therefore, the age issue is less of an issue than the kind of discussion that we were just hearing. It is about the person saying, I think that I would like to try to go back to work when my child is three, and we say, Lets make sure that everythings done before that, so that when you are ready to do it, you are ready to go.
While their children are between the ages of one and three, you may wish to place certain restrictions on the type of intermediate activities that people can be compelled to do. I am just putting that on the table. In my view, I do not see strong reasons why you need to do that, because it is about an individual agreement that the person makes with you. However, it may be felt by Parliament or others that there are certain relaxations around the direction. That seems to be the one area of contention. It is a case of, Okay, if they agree to it, thats fine, but if there is some direction required, and the provider feels that it is reasonable for the person to undertake an activity, you may put certain limits on what the person can be directed to do. I think that is a fairly small area, but you may say that, where there are children below the age of three, perhaps direction to achieve certain things, when the person is not willing to agree to it, is inappropriate.
Just to be clear about the timeline, at what age for the child do you think that parents on benefit ought to be compelled to look for work? Also, how long a run-up period, as it were, is reasonable to deal with some of their skill issues and some of the underlying problems that they may need to overcome to prepare them for work? In other words, if you say that getting them into work when the child is seven is appropriate and, say, two years was the period to deal with some of their underlying issuesthere would clearly be different periods in different casesthen you would start the process when the child was five. I am just working out how far you go back for that run-up periodor is it not that straightforward?
Professor Gregg: In my head, it is not a case of, We say when it has to beI will talk about the upper age in a minute. Instead, within that period when the child is between one and seven, it is not a case of, We think that it is right or appropriate for you to be moving into work when your child is one, or three, or four. There is a dialogue with the person about what is right for them.
We had a little debate earlier about the scientific evidence of child neurological development. The key point is that that development is not uniform. There is no black and white or this and thatit has to be about the dialogue with individual mums. Children who have disabilities will need a different kind of interpretation. So that allows those individuals to have a dialoguefor one to say, For me, it is not right, but for another to say, Yes, go for it and you just support them through that process.
In terms of an upper age limit, is there a point at which you move into conventional JSA? There are two issues here. One is, does it have any side effects on the children? There is a limited piece of evidenceand it concerns teenagers, not seven-year-oldswhich suggests that a reduction in the supervision that lone parents can provide can cause some children to go off the rails. That is American evidence, where they do not have the kind of child care and after-school environment that we have. So I will say that there is some evidence, but it might not apply in our circumstances because we do have a much more structured after-school system than the US.
The bottom line is that we have two models. One is support and engagement moving towards looking for work and moving on; and the other is the JSA model, with job search at the beginning, support later. It is a sort of shake-out model. You wait and hope for people to disappear in the short term and then you start investing when you get to six months, or a year, in flexible new deal. You are trying to lose the easy stuff without spending any money, which is reasonable enough, and then and only then do you start investing in the support services. It is an open question which of those two models is right for families at different ages.
I do not know whether seven is the right line, but I would like to see us test it. Let us look at the model that is being introduced of switching people to JSA and look at the effects there, and let us look at the alternative modelsupport first leading towards work and engagementand find out which one works better, not just in terms of job outcomes and income, although that is pretty central, but also in terms of child well-being.
So, to clarify what you feel is appropriate to be mandatory, the mandatory piece should be the engagement of the parent, with the adviser, to have the conversation?
Professor Gregg: Yes, and follow it once you have agreed it, subject to flexibilities of changing it, but fundamentally you agree it. But it does not say you have to do this at age one or you have to do this at age two. The whole point is that it is flexible around the individual. That is why it is called personalisedthat is the buzz word.
As far as you are concerned, the personalisation bit is key to the mandatory bit. If you did the mandatory bit with some sort of prescribed solution, that would not be the right thing to do.
Professor Gregg: Yes. For this kind of group, I think that is right. The diversity of the group that we are looking at means that something laid down from on high by the Department for Work and Pensions at the centre to try to give a blanket story for kids of a certain age, or families of certain types, is not the right approach. We are moving to a much more flexible model. That is why I am trying to emphasise that second part, because you are trying to design it around the individual rather than lay down rules at the centre: maximum flexibility to front-line staff, fewer rules laid down from on high. You agree an action plan, you work with the person, and you support and encourage and try and push them a little bit. Once they agree to a plan, it is agreed and then you follow it; that is the mandatory part.
At some stage there is a kind of flip, when you move a person into a JSA regime, which is the complete obverse in the sense that you have very strong rules about what you do on day one, but no real support and engagement until later. I am not clear whether seven is the right age for that and I do not believe that anybody else is particularly certain that seven is the right age, so we need to find out. We need to find out by trialling them next door to each other, so we can try and see which one works best.
In your report, Professor Gregg, you state the conditions you think are necessary to achieve a radically reformed welfare system, as you put itthat is your word. You have three things: the vision of engagement and support; the system whereby that engagement reflects the needs and capabilities of the individual; and thirdly giving the claimants an ownership of this process.
Now, all that focuses on the claimant. You and we are talking about the concept of work-readiness. Where does the employers vision fit into that? We have a lot of experience of the welfare system thinking it knows what work-readiness is and turning out claimants deemed work-ready but the employer receiving that person saying they are not. An employers vision is important, is it not, because if we are to translate all this work into jobs there has to be real employability from the perspective of the employer. How important should their view be and how do you fit it into this kind of welfare system?
Professor Gregg: I agree with what you are saying but I would broaden it slightly. Employers can also come with significant prejudicesagainst disabled people or people with mental health problems or people with young children who they think are going to take days off all the time. They come with a set of priors and are often resistant to employing the kind of people that we are looking at, partly for legitimate reasons such as that they do not have the skills or attitudes, but also for some we might not think appropriate. They have certain prejudices or priors and we have good evidence of that. What can you do about it? We need a process for the providers delivering this kind of thing to engage with prospective employers. That could range from work trials to intermediate labour markets or transitional jobs, giving people a mix of work experience but also allowing employers to see the people to challenge some of those prejudices.
A related point is that we need more employers saying that their priors were wrong about this groupthat they have taken on people who have had sickness or with disabilities, or have taken on lone parents. Bunches of employers will stand up and say that was the best thing they could have donethat these are the kind of workers who stay; they are not the ones who bugger off to the job down the road that pays more, because stability is important to them. We need more employerswe need a campaignto articulate what is valuable about these workers. So it is partly about getting the employers engaged with the providers so that there is an ongoing relationship and providers learn what employers want and need. It is also partly about getting the people in front of the employers so that they can see them and realise that some of their prejudices are unjustified, and it is also about employers openly speaking about the benefits. I have tried to articulate that. We have a range of work experience, job trials, and transitional job-type models to put people in front of employers before they take that hard decision, so they get to know the people and that helps a lot.
I appreciate your emphasis on that from the point of view of dealing with whether employers have prejudices about certain groups coming into their work force, and it is relevant that you should talk about that. It was not exactly where I was coming from. I have conversations with employers in my constituency all the time. The sort of issues they raise are not so much to do with that but to do with the attitude that someone might arrive with, communication skills and concepts of team working. They say people arrive allegedly labelled work-ready but with no concept of things like that. If we are going to make this work in significant numbers, what I am trying to get you to address is how we can bring in those who know about that and have skills in transmitting those aptitudes to be part of a welfare system preparing people for work on a large scalepossibly larger than first envisagedas this will start to come into effect, hopefully, as we are coming out of recession.
Professor Gregg: You are probably right. I did not focus on that enough. There are two fundamental points here. Jobcentre Plus has been relatively poor about building ongoing relationships with employersit views it in a sense as the matching of an individual job. The providers of support services to the groups we are focusing onthe harder to helpwill, as part of their functions, have to engage in that long-term relationship, which is a dialogue. The employer feeds back what is wrong with the people they are getting, and the provider tries to fix that. The reverse is the dialogue, which I was trying to articulate, of trying to accommodate the others.
The second point, crucially, which I did not address so muchwe have some experience of thisis that what you get in the early months is a major conflict of expectations between what the employer thinks they want and are getting, and what the newly hired person is coming with. I shall not say which side is right or wrong, but there is a massive disconnect. The lone mother wants to take a bit of time off to look after their kid because they are sick, and the employer is saying that they need someone who comes in regularly and that they cannot have people turning up three hours late with no notice. Negotiation or conflict resolution is part of the ongoing process, so that the deal for the providers does not end on moving them into the first job. Crucial to what we have been moving towards is that they must look for sustained employment, so they must deal early on with that crisis management. In a sense they are acting as an arbitrator, ACAS-style, between the different expectations on the two sides of the bargainthe employer and the workerin trying to achieve a resolution.
There is a combination of trying to fix it when there are different expectations after the person has started, but above all of having the dialogue first to try to ensure that they produce the goods. Employers must recognise that these people will not be perfect, model workers. That is almost a given, in a sense, but you can do your damnedest to make it as close as possible, and you must engage in the feedback process when the employer says that the people are not suitable because they come with the same sort of problems every time and that that must be fixed before you send people to them. That is fine, but when the person is in post, you start having to negotiate the conflict away and to get both sides to give a bit to try to make it a viable, long-term position.
The point that I am trying to establish is that I think you are saying that it is important to have a lot of employer involvement in the whole process, and that the more there is, the more effective the welfare side can be to achieve the job outcomes that we want.
In your view, there is an important progression-to-work group, which comes between people who are ready for work and should be looking for work, and people for whom no conditionality should be applied. The large progression-to-work group consists of people on the journey to work, whether lone parents or people in receipt of employment and support allowance. You will be aware that we have a problem with many people who have claimed employment and support allowanceincapacity benefit as wasfor a long time, many of them for more than five years. You will be aware of the statistics on that. Do you see them as full members of the progression-to-work group of whom the same should be expected as of other members of the group, and that the conditions should be applied to them as well?
Should long-term employment and support allowance claimants be full members of the progression-to-work group on the journey to work alongside everyone else, and receive the same help as everyone else, subject to the same conditions?
Professor Gregg: The short answer is yes. The longer answer is that at this stage pathfinders are doing different things with different groups. The AME-DEL one focuses on the long-term stock; the multi-client groupor some other phrase nowconsists of new deal people, short-term unemployed and lone parents; and there is another pilot. The pathfinder structure is that each one is doing something slightly different, so that we can learn what each bit does separately and what AME-DEL do distinct in their own box, while we learn other things about conditionality and sanctions in other places. If all that is put together in one big bang in a pathfinder, it is difficult to isolate which bit works for each group. It is useful to map it out and say, This is what is happening over here. We are going to learn this from it. Then we can put the bits together as the next stage, rather than trying to do everything as one big bang, when it becomes difficult to work out what the positives and negatives of all the bits were.
There has been a problem over the years. Things have been done for new people coming on to employment and support allowance, but a stock has been allowed to develop which is now a substantial part of it.
Professor Gregg: Indeed. It is almost testament to the inaction over the last God knows how long. The other point that is worth making is that there is the learning process, which I have just described, but there is also a cost process. That is partly why that group is being pushed into the AME-DEL territory where you try to align cost to the potential receipt of savings, which is why that kind of group makes most sense there. Longer term, this is in the territory of moving all the boundaries that divide client groups by duration or IB versus lone parent. We are moving in a direction of the single working age benefit with a single, overarching system, but we are trying to focus the right support on the right individuals. At the moment I am talking about it in big groups, which is not necessarily the end game. The end game is much more trying to allocate people on their own individual circumstances. But the first stage, just for clarity and ease of delivery, is to do it in clearly separated groups with clearly separated pathfinders.
We have discussed sanctions a lot today. Views have been expressed by a number of organisations that the way forward is not sanctions but nurturing and encouragement. Clearly some of the witnesses have not experienced doors being shut in their faces in the way that I have in relation to things that you are trying to get people to do. I should be interested to hear your views on sanctions. What do think their role is? How can they be used in a way that will be effective in encouraging more people into work?
Professor Gregg: An obvious point to say about sanctions, which is trite but nevertheless true, is that you do not want to be sanctioning people. It is a sign of failure, not success. So the first and fundamental point is: how do we maximise the information flow to avoid people being sanctioned through mistake or misunderstanding, and only get into the territory where the sanction applies to people who are refusing to engage or who are messing about in some way? A large chunk of what I was trying to say is about whether we can improve that process. I talked about an engagement process when people sign on to make it very clear what the regime is and the process that will follow if they do not engage. A warning is the first instance, so that you do not instantly get into fines. You initially say, Look, you are out of order. Youve gone wrong. And you make it very clear to them why they have gone wrong. Then you have what is already in existence. Essentially it is a slap-across-the-wrist finea fixed fine for non-compliance. Then, recognising that if this is going on repeatedly there is something wrongeither the person is unable to engage in some way or they are simply unwilling to engageyou have to distinguish between the two.
I have talked about a review where someone like a compliance officer sits down with the claimant and says, Why is this going wrong? Some will say that they have agoraphobia which has not been picked up and they cannot leave the home. Then you try to sort out that problem and make sure that it happens for them. That is fine. Then you go back to the beginning and you try a new system. For those who repeatedly refuse to engage with the system, it is right and proper to have a credible backstop position of a sanction which says, This is meant to be a positive engagement strategy. We are trying to bring you through on an engagement process. If you refuse actively to engage with the system, there is a significant backstop which says that you will face a significant intervention.
What I tried to float was a distinction between monetary and non-monetary interventions. I draw the analogy that for ordinary people who park their cars illegally you use finesyou can assume that they have money because they have a carbut children do not have money so you use time sanctions: penalties such as detention. Could we be more flexible and think of non-monetary, time-based sanctions for those groups for which money is obviously a big issue? For example, they would have to come into their jobcentre or their Working Links provider for a monitored activity, or, if they were able-bodied, they should perhaps be going out and looking after old peoples gardens. It is a punishment, but a non-financial one. That is quite a new and radical idea and has been implemented in a few countries. I recognise that we have not covered this territory in the UK, but the idea of non-monetary sanctions for client groups that are at significant risk when money is taken away is interesting enough to explore.
That is really helpful. I have a final related question, on the concerns that have been voiced about the power of advisers. How does the system protect itself from unreasonable advisers who are not following the process as you are, which suggests that they are incapable of managing a complex process?
Professor Gregg: First, I do not think it is right for outside providers to do the sanctioning. The Government are responsible for that, and passing it over to charitable organisations and so on is not appropriate. The buck stops with Jobcentre Plus. Information flows and so on can come from providers, but the tough cop element herethe hard guyis JC Plus. Sanctioning is under Government control, not the control of random others.
Secondly, we need a series of checks and balances. The obvious one that we always start with is a right of appeal, but I do not think that that is enough here. We also need specialists with accumulated knowledge in JC Plus, who have regular experience of this and can oversee more junior people. But I would like to see systemic review of this kind of thing, which is an Ofsted-type approach. Ofsted goes into schools and reports on whether providers are delivering the model. On sanctions in Jobcentre Plus, we would look at whether they were working as we intended or were potentially being abused. So you have systemic assessment of the system. An appeal system potentially deals with that persons problem but does not pick up that collectively we have a malfunction.
Another alternative, or an addition, is a sort of ombudsman figure who has the power to investigate when they hear lots of reports coming out. That kind of appeal system, and also a more claimant-voice advocate/systemic assessment is a necessary check and balance.
My question follows on well from Meg Munns questions. It is on the link between aspiration and delivery. There is a lot of aspiration in your report, which to a certain extent is reflected in some aspects of the Bill. But on delivery, my impression is that we are in what you rather imaginatively described as the shake-out model. Do you think that the way in which support will be delivered, through a flexible new deal, will deliver the aspiration that you started off with? I refer to your aspiration for the long-term unemployed, the support starting after six months, the great fears about parking for those who are furthest from the market, and the opposite of thatthe creaming-off of the best in order to get them through. Are the delivery mechanisms adequate to deliver your aspiration?
Professor Gregg: Let me take the specifics and then move to the general. On parking and creaming, I fundamentally believe that a flat-fee system encourages that. If you have a flat fee of £1,500 a head, you are going to look at some people and say, This person is not worth investing in, and you will go for the ones who give you your margin at the bottom. What I specifically advocated tryingI had a meeting with some DWP officials this morning to discuss itis sometimes called an escalator, or accelerator, model of funding. Broadly, that means that a provider gets a group of peoplesay 100and the outcome-related payment rises the further they get through that population. You start at relatively low costs, perhaps just enough to cover their basic up-front fees, whereas the nth person, close to the end, is very valuable to them, so they will always have an incentive to work harder for the next person, even though that means they are doing that work at the beginning. They know that if they go from 60 to 70 per cent. they will get much bigger money than when they go from 40 to 50 per cent., so they will decide to work on those marginal people early on, to ensure that they come out the right end.
Two things follow from that. One is that it is essential to have long-term engagement: you have to own the people for a long time. That raises questions about the flexible new deal ending after a year, when people are sort of pushed off, or about lone parents going off somewhere else when their children reach seven. I would advocate not having that discontinuity of care, using pathfinder pilots that work with the escalator model, so that people stay with that provider for longer than one year, or until their kid turns seven. They should stay with the same provider. Rules that might give a break of provider are unhelpful in trying to overcome the creaming model and in giving people incentives to go for harder-to-reach people. We need to look into that, and I should like to see that happen within pathfinders, so that we can learn the lesson more generally. That is the specific.
In general terms, there are two points to be made. First, we have learned a hell of a lot about working with client groups including the long-term unemployed, the new deal for lone parents, the new deal for disabled people and, more recently, pathways. What has been surprising is how quickly organisations have ramped themselves up to be able to deliver the new models. Yes, there is a learning curve, but JC Plus has untapped potential. Lots of people are doing things by rote and do not really have to use their brains. There is unmet potential there, as we have found when JC Plus has been asked to deliver pathways in some areas, when it has risen to the game quite successfully. Having said that, there is clearly a cultural change going on here, and in good Maoist tradition that needs a cultural re-education, otherwise known as retraining. We need an attempt to produce a new skills set within claimant offices and so on.
To park that issue slightly, I am very struck by the fact that providers typically provide much higher-quality, calibre people, at higher wages, than Jobcentre Plus. That might be an issue in the longer term. They principally take graduates, and they pay them a lot more. That is a particular problem for Jobcentre Plus in London, which is having real difficulties with retention and so on. It tends to have, relatively, less educated people and a high turnover, and that is never a good business model. There might be ramifications to trying to build a skill set and to trying to raise the quality of the position, and therefore the staff, in the longer term.
There are culture change elements to your weddedness to the black box approach. Do you think there is enough acceptance of that being a black box approach, both amongst the DWP and the market as a whole, so that it is a pure black box? It has always struck me that you cannot have a half-black box in this. That position is probably the most comfortable for officials.
Professor Gregg: Yes. There is a desire for control and that will come from politicians and from senior officials in Jobcentre Plus or the DWP. It is hard for central Government to let go in that kind of black box way, so maybe they need a bit of re-education as well. That is the way to go. We have tried a few experiments with it and they have generally been positive. My view is that when JC Plus is given a new task with a new set of rules, it tends to do almost as well as an outside provider. It has some inside knowledge and it knows the game, whereas the other groups are probably going to innovate. They are going to learn and push, and a rules-based system crushes innovation. Although in the first instance they may be reasonably comparable, my argument is that the productivitythe learningis much greater in a black box model than in a rules-based model. That is what we need to try to release.
Earlier, you were discussing monetary and non-monetary interventions. That is interesting. I think a lot of people are open to conditionality, but they are asking, if there are financial sanctions and people are already on a fairly minimum income, what happens to those people and how can they live if their minimum income is taken away?
Professor Gregg: My view is that for the JSA job-ready people, there should be monetary sanctions. For the restthe progression to work group, which is the harder-to-help groupI am suggesting minor monetary sanctions as a short, sharp shock, a slap across the wrist. However, those should not be escalated intoas happens with the jobseekers allowance peoplewhat might be considered very severe sanctions. In relation to jobseekers, you can get disallowal, disentitlement and severe monetary sanctions going onfour, six or multiple weeks of sanctions. I am saying, I do not think that that is the best approach for this group; can we look at doing it somewhat differently? By which I mean non-monetary sanctions.
You have a basic slap across the wrist12 quid in the first instanceand you make sure that the person knows about it. However, when we are looking at real breakdown and the high-conflict end of the business, we do not go into heavy financial sanctions for the reason you are describing. We try to do it rather differently. To put it slightly differently, as someone else was saying, you do it more through hassle, bringing the person in and ensuring that they are there pretty much every day doing something, rather than using monetary penalties. That is for exactly the reasons you are describing.
Professor Gregg: Yes, there are two points to make. For most people with children, their own benefits make up a relatively small proportion of the total incomehousing benefit and tax credits and so on are the biggest ones. We really should be talking to people at the extreme end. What I tried to describe was a series of steps ranging initially from warning through to something more serious.
I am not against the idea of non-monetary sanctions for the JSA population. That is an eminently sensible idea, which we should try out. Because they are job-ready, the range of things that you could ask them to do could be much wider. In my head, I have the idea of community service where you have to go and look after old peoples gardens or whatever. Doing that for your dole money is, as far as I am concerned, a punishment. I am open to that idea and I would like to see that experimented with, but it is very novel so it needs to be done carefully and we need to know the implications. As a direction of travel, I would like to see us trying out non-monetary sanctions for both populations and learning a few lessons about whether they are effective in getting people to engage.
As we have time, I shall follow up the issues in relation to people with learning disabilities. For a long time I have been concerned about the tendency to find things for people to do that are not necessarily related to their capabilities or what they can do. I have seen some good examples in my own city of people doing voluntary work that could perhaps lead to paid employment. There is still a real need for a change of mindset, so that we see people as having some skills and capabilities, rather than just finding them something to do with their days. I should be interested to hear your views on that. Because there is such a lot of discussion about these issues, including sanctions and the like, often people who have not been in work and have not had any help to identify how they could do something, either in the paid sector or the voluntary sector, end up being extremely frightened of what might happen to them in this process. I should also like to hear your thoughts on how that can be dealt with.
Professor Gregg: To be totally honest, this started for me when thinking about adults with learning difficulties. I have a close personal friend who was one of the early developers doing the early work on the personal adviser advocacy role for adults with learning disabilities. Rather than each profession having a columnar relationship with the individual, you sit down with them and ask, What do you want? How can we negotiate it? Often, they want different things from those provided by the various agencies: they want to learn to drive, to live independently and to start the process of getting into work. They want diverse things. So you sit down with them and try to work out, as an advocate, in a sense, how to negotiate the package of support and so on, to try to get them where they want to go. That is very much at the heart of what I am talking about here. I see strong parallels between those models and bringing some of those ideas into welfare to work services for those with such large barriers. I regard those things as very much meshed.
Pushing slightly further, into an area that we have not discussed, perhaps because it is beyond the scope of the Bill, with hard-to-help people, lots of agencies will be dealing with any individual. A homeless person obviously has housing problems and is likely to have alcohol problems too, and some will have mental health problems. There can also be long-term disconnection from work and problems with basic skills. How do we start to make this a journey that deals with all the problems of the individual, rather than each agency working independently?
I am trying to open up a starting point in the debate. On welfare to work, let us talk a little bit more holistically about the individuals needs and capabilities. I would like to conclude by saying that we are opening up how we can try to join that approach up with the other objectives so that, in a particular case, we have the retention, advancement and progression stuff coming after the first welfare to work stuff. So the Department for Innovation, Universities and Skills and DWP are trying to link up to say, Its not just welfare to work. Its welfare to work and then weve got retention, advancement and progression on the table, funded, potentially, from different sources, but maybe with the same agency working through the process.
I am not sure that I have answered your question. I have probably rambled off on to something completely different. But that area is next. That is why I say that this is the forward-looking bit. The bit that we need to crack next is how to get Government funding agencies to link this progression across the persons journey, rather than have everybody dealing with a little bit of it.
Thank you very much indeed, Professor Gregg, for the time that you have spent with the Committee this afternoon and for your evidence. We are very grateful.