Good morning. It is a pleasure to have everybody here. I do not know whether this is a first for the House but it is certainly unusual to have three Ministers giving evidence and a Minister on the Committee available to ask questions. Because we need to finish at 10.25 am, we need to get on with the business. I will ask the Minister whether he needs to introduce his two colleagues.
I would like to start with the right to control area of the Bill. This question is probably best directed at Mr. Shaw and then perhaps Ms Helson.
Clause 29(2) starts well by being drawn widely across a range of areas affecting somebodys whole life. Unfortunately, it gets rather narrower in subsection (5) where it excludes social care services and a number of other things. I have read the reasons for thatthat those areas are already controlled under other legislationbut it seems to me that we run the danger, with a number of Government Departments moving in this direction, of ending up with individuals having a number of individual budgets and a number of different funding streams and not being able to draw all those things together. Why not be braver and encompass a range of funding streams across Government Departments to give individuals a genuine right to control, so that they do not have to fit their lives round departmental boundaries but Departments try to fit their service delivery around individual lives?
Jonathan Shaw: Good morning. One could say that if we were very prescriptive we would be in danger of constraining the possibilities under right to control. That is why we have said that we want to have the trailblazers, which I know you asked the chief executive of RADAR about. We want to have them so that we can look at all the possibilities. If we are too prescriptive at this stage, we might need to come back and have further legislation. In addition social care is there, so there will be a danger of duplicating that legislation. I believe there is sufficient legislation; we should not create confusion by being prescriptive in the Bill.
We have provided the Committee with a helpful paper which includes all the various parts of the legislation. It is right to have as wide a scope as possible. We have set out our stall to ensure that local authorities can act in partnership with ourselves and other public bodies. Most importantly, that has to be underpinned by working with disabled people and their organisations to find out what works.
Mary Helson: The intention is that it should be as seamless as possible for an individual disabled person. There is an absolute desire to avoid confusion and duplication of the primary powers. The alignment at local authority level will ensure that it is possible to join all those different pots of money together. We are starting that through the project steering group. It will involve the Department of Health and the Department for Communities and Local Government. That will ensure that we join up at all the different levels where necessary. In the pilots we will need to ensure that the transformation of adult social care, which is already very advanced, is integrated sensibly with the personalisation on the disability employment programmes, where we need to make further progress.
I am still not entirely convinced, and we will have more debate on this when we get to the detailed consideration of the Bill. First, the legislative framework for adult social care is in place, but it is not very advanced in the sense of the number of people in the country who have an individual budget. One of the witnesses on Tuesday was Paul Davies, the director of adult social care at Oldham. His authority has a fifth of the national total of people on adult social care who have an individual budget. The number of people with an individual budget in adult social care is very disappointing. Picking up the point that you both made about pilots or trailblazers, he said in his evidence that he understood why people wanted a pilot but, having rolled this out to everybody in his authority, he was convinced that there was sufficient evidence about what works and how to proceed, and he said unequivocally that he would like the Government to press forward with this. That is broadly my view.
Have you considered the alternative to a piloting system, which is putting the legislation in place and being very clear with authorities about the direction that you want to go? Obviously some local authorities, and possibly even some parts of the DWP and its delivery organisations such as Jobcentre Plus, would move faster. You could then use those leading organisations to learn the lessonsto see what workedand then roll out to those that were slower. That would set a clearer direction and would be more likely to lead to this concept taking hold than running pilots for three years, during which a lot of authorities will be tempted to sit back and wait and not engage with the process because they are not sure that it is inevitable.
Jonathan Shaw: It is not just social care that we are talking about in terms of the possibilities. We have also referred to disabled facilities grants. One can envisage a number of education grants. There is also Supporting People. We can also see this in the context of care and support. We will be producing a Green Paper on what, one could argue, will be one of the most important pieces of social policy and change that we need, in terms of delivery and affordability. It would be wrong to constrain ourselves at this stage and cut off possibilities.
Of course, local authorities are at different stages. I think there is generally a consensus belief in the devolution of power and in local authorities making those decisions for themselves. Your prescription would fly in the face of that. We need to strike that balance. We have set out our stall and have been clear that that is the direction of travel that we want, but we cannot see this in the context of social care alone. We need to pull together other aspects and other funding streams. We know where we want to be and we need to provide the flexibility to bring people with us, and, importantly, involve disabled people.
Disabled people say to meand I am sure that they say it to you, MarkNothing about us without us. That is absolutely right, hence the need for the trailblazing and piloting. In the previous evidence session rural matters were discussed, so we need to pilot in different areas to find out what works. We cannot limit this to social care. If we did, we could find ourselves having to come back for further legislation. The flexibility is built in and we need to establish what works in conjunction with disabled people and bring people with us.
I have a final two-part question on this clause. First, I am saying the opposite about constraining. When I read through the Bill I was encouraged that clause 29(2) was all-encompassing, covering a range of areas. It is later narrowed by excluding some other funding areas. If you left those bits out, you would enable individuals to start from looking at how their life works, pulling in the funding streams from across Government. You would be able to give yourselves the powers to do that.
My second concern about the piloting is the opportunity cost of not doing this fast enough. You will know from your visits that when you talk to people who have managed to get an individual budget for social care, they say that their lives have been transformed and enhanced and that a huge difference has been made. There may be snags along the way that need to be sorted out, but I would like to be able to bring help faster to all those people who will not get the opportunity to get control of their lives in the next three years or more. In the legislation, you have powers to run a further set of pilots after that; it seems that we are in danger of not making this happen fast enough for all those people for whom it would be a life-enhancing experience.
Jonathan Shaw: The legislation exists for local authorities to provide individual budgets to social care. If you say that we should put that in legislation and make them do it, I would say that that flies in the face of working in partnership and the devolution agenda. That legislation already exists. To repeat my previous point, this is not only about social care. At the moment the legislation allows social care as the gateway to individualised budgets. I have referred to disabled facilities grants and education grants, and we are also looking at making supported employment available. We need to understand how that will work. Of course, there are implications for services of devolving to the individual the allowance of money for their supported employment and there may be implications for the ability of wider parts of the service to continue.
We are clear that the need to pilot is not born out of a desire to hold up peoples ability to have individual budgets to live their life; rather, having read the transcript endorsed by RADAR and other leading organisations that I have spoken to, it is more about finding out what works and involving disabled people themselves.
Mary Helson: I wish to raise one point of clarification about the low number of people who have individual budgets. Part of the Bill is setting out a framework for people who do not want to control the cash themselves. So although it may not appear like an individual budget, people will have choice and control over the services that they are using.
Two strong messages came through in our discussions on the Green Paper. One was from the local authorities involved in the individual budgets pilots, which provided a contrast with that of Paul Davies, who was very enthusiastic and clearly at the cutting edge of what can be achieved. Local authorities that had had experience of the individual budgets pilots advised us to test this process further.
The other message came through in our discussions with disabled people and with the advisory groups, which are as keen as anybody to see this transformation applied more widely; they emphasised how important it was to get this right. Those people are conscious that the structure of user-led organisations and the availability of advocacy throughout the countryLiz Sayce touched on this in her evidence on Tuesdayis simply not embedded enough to deliver a sustained programme of personalisation. Although the Government are completely committed, disabled people want us to move as swiftly as possible and public authorities are lined up to move in this direction, we want to make this a sustainable change that really makes an improvement to peoples lives.
Kitty Ussher: Certainly. We want to move towards a type of social fundthis is really only the beginning of the journeythat does not simply ask people precisely what they want to spend the money on, but instead puts the resources into supporting people to manage all their budgets more effectively. However, by saying that I am not implying in any way that when people get themselves into real difficulty that is always their own fault: all sorts of things happen that might cause them to need a loan. However, let us face it: some organisations have as their core function the type of budgeting and debt advice that the DWP does not routinely provide.
We wanted to be able to have the legal ability to work with outside organisations ifit is a big ifwe thought that might help us, in the future, achieve our vision of a reformed social fund that provides financial advice as well as finance. We wanted to take the opportunity in this Bill to take that power to give us a broader spectrum of policy options in future.
Kitty Ussher: We have discussed credit unions. It is certainly not an attempt to contract out the social fund to a bog-standard private sector provider, or anything like that. You cannot legislate for credit unions themselves, so it looks rather broad on paper. The idea was always that it would be the type of organisation that is good at not only providing finance, but providing financial advice, so a credit union
Kitty Ussher: It is important to say that there is no intentionin fact, there are no plans in placeto externalise, at the moment, any social fund provision. We want simply to take the power to do so in some parts of the country, but I have made it entirely clear that we would not charge interest in some parts of the country and not others. In fact, the Bill does not give us the power to do so, and we would never charge interest on a social fund loan.
To be clear, it could work in this way: if there were an excellent third-sector organisation in one part of the country that had the core function of providing budgeting advice to people on low incomes who seek emergency credit, we would be able, in some parts of the countryor nationally, theoreticallyto explore whether we could provide a far more effective service by working with that external provider in that area. That would be the idea.
The problem is that there is already a postcode lottery with the budgeting loan part of the social fund, as you know, and this sounds like a double postcode lottery, because there might be a better service in some parts of the country and a bog-standard service in other parts. Is that fair?
Kitty Ussher: I do not think there is a postcode lottery at the moment, because what we do, as I am sure you are aware, is reallocate budgets, during the year, where demand is greater. All this is for the future, in a sense, to achieve our longer-term vision of a social fund. There are some new primary legislative powers that we need to take, and this is one of them. The way it would work, if we decided to use the power, would be specified in contract with the external organisation.
It is probably worth saying, because I have not had an opportunity yet to say this publicly, that we will not only be publishing the responses to the consultation that we did at the end of last year shortly, but will also be launching a separate, broad consultation on all aspects of crisis loans and budgeting loansby the summer, I hope. In a sense, what we are doing now is taking the opportunity that the Bill presents to ensure that we have a full set of tools at our disposal to reach our longer-term vision.
That will be very welcome. Will the reform do anything to expand provision within the budgeting loan system, such as to bring in any additional resources?
Kitty Ussher: There are two ways in which the provisions will do that. First, we propose to take out of the crisis loan system advance payments of benefit. Currently, about half of people who apply for crisis loans are waiting for us to determine whether they are eligible for some form of benefit or other. So, they have put in an application for income support or jobseekers allowance, but we are still processing that and they have no money in the meantime, so they apply for a crisis loan. It is in our power to fix that, and we propose to do that in this legislation. We are going to take all of that out of the crisis loan budget, and deal with it through the normal annually managed expenditure benefits-expenditure side of things. We will be able to give people who are destitute advance payments of benefit, so that will leave resources in the social fund that we can target more effectively.
The other measure that will improve the amount of resources available is to do with the fact that we typically spend £60 million to £80 million a year in community care grants for white goods. We currently do that by providing a giro for the amount that it costs to buy a fridge or other appliance on the high street, but we are taking the power, in the Bill, to enter procurement arrangements with white goods suppliers, so that people get a chit rather than a cheque. We will then be able to negotiate, on behalf of the taxpayer, some bulk discounts, which should put more money into the overall social fund, so we are trying to bring resources in.
Finally, at the moment low-income families borrow six times as much money from loan sharks as they get from the budgeting loan fund. Can we do anything to redress that imbalance?
Kitty Ussher: There are two things that we would like to be able to do through the reformed social fund at the end of this process, the first of which, as I have said, is to provide greater financial advice. That will free up resources, if people do not find themselves in such situations again because they have taken out insurance, for example, thus leaving more resources for other people. Secondly, we want to make it simpler to apply for free loans through the social fund so that people are not forced into the arms of loan sharks, who are illegal. We want to ensure that credit is more available, and we will be putting forward various ideas on that later this year, which will not require legislation.
I have questions on another matter, but may I ask you about what you said on social funds? Is it part of your plans under clauses 13 to 15, or of any other plans, to charge interest on any of the loans that are made from social funds, either by you or by external providers?
There was a bit more than a clue about what you wanted to do. You said that interest would be charged in return for services, but that it would be at affordable rates. Then you set out how somebody with a loan would end up paying more because they would have to pay interest on top of the capital. Will there not be any interest paid?
I have a couple of questions that relate to delivery of what the Bill seeks to achieve. You will have heard that on Tuesday afternoon Professor Gregg threw down a challenge to DWP officials and Ministers about the culture change that would need to take place if you are going to be able to deliver the kind of black box arrangement that he envisaged in his report. How would you reassure those sceptics who are concerned that it will be very difficult for the DWP not to allow a legitimate concern and a wish to be involved in the contract to spill over into the operation of the contract?
Mr. McNulty: That question goes to the broad direction of travel that the DWP is going in anyway. The black box model that Gregg, Freud and others have suggested is the natural destination for policy in this area. Ironically, to achieve properly a black box model, you need to be very clear at the centre what the strategic parameters are, pass that on and then leave people to get on with it. There are two ways of exerting control: first, through the establishment of strategic parameters, and secondly, through far more broadly drawn contracts in which the concern is more about outputs and outcomes rather than the process. That is broadly the direction in which we are travelling anyway.
We need to meet Professor Greggs challenge. I read underneath what he said that politicians and senior civil servants need to keep their grubby little hands off if the contracts are to work successfully. That is quite exciting and the way we should go.
My next question relates to the impact on resources, particularly of Jobcentre Plus but also more generally. The last time we were in this kind of position, just before Christmas, I understood you to say that you did not believe that the number of long-term unemployed would grow in parallel and at the same rate as the general pool of unemployment. Is that still your belief, and why?
Mr. McNulty: As we saw yesterday, the unemployment trends change with every series of monthly statistics. We are starting to know and understand more about exactly what is happening because of the recession. In that context, you may know that we have asked, as a matter of course in preparation rather than as a matter of fact, potential providers of the future flexible new deal contract to look at parameters of up to 300,000 long-term unemployed rather than 100,000not because that will happen but because it is a matter of proper business sense to get them to look at those wider parameters, given that the ground has shifted since the contracts were first thought of.
Mr. McNulty: It was a maybe, but a genuine maybe. As I said yesterday, what the Government are doing nationally on the economyfiscal stimulus and everything elseand what our international partners do will determine how deep or otherwise the recession will be, and as a consequence, what the pool of longer-term unemployed will be.
Mr. McNulty: Interestingly, not least in the context of the evidence-taking session on Tuesday, we are very aware of the success of the voluntary processes in place and we want to move in that direction. But you cannot emphasise the voluntary and personalised nature of help and support for problematic drug usersin the first instance for crack and heroin usersunless you define the sanctions and put them into legislation.
Naturally, people will dwell on the sanctions, but much of what we want to do with problematic drug users is not in the Bill. The Bill covers only the areas where we need to use legislative power. The implication of your questionthat there have been some real successes through the voluntary routeis absolutely fair and that is where we want to dwell in terms of broader policy, but you do need to define the stick if you are going to have what I have described before as a carrot carrot stick system.
Mr. McNulty: Because, for all its success, the number of people it deals with is limited. In order to build on the success of the voluntary approach, and to make it as universal as possible for defined problematic drug user groups in particular, we do need to have the sanction as well. I would like itI have said this to DrugScope and othersif the sanction is never used for the reason that people are aware that the personal treatment plan that we will draw up with them is also in their interests on the journey back to work-readiness and eventually to work.
Some 140,000 people, which is not an insignificant number, are already getting treatment and are on benefits. If that figure increases to 240,000, what additional resources will be made available?
Mr. McNulty: The difficulty we have is similar to the difficulty we have with right to controlnecessary elements of the package are devolved. I certainly cannot speak for the Welsh Assembly Government or the Scottish Executive in terms of their resources, but we are working very closely with them both. In England, working with the National Treatment Agency for Substance Misuse and others, there is already a relatively good picture in terms of treatment and we need to work closely with colleagues across Government to maintain, if not improve, those numbers.
But we heard on Tuesday that the net result of that would be, without additional resources, that other people, who perhaps needed drug treatment, would be bumped off those programmes to make room available.
Mr. McNulty: Only if, in the rather disingenuous and churlish fashion put on Tuesday by DrugScope, we go from where we are now to every single problematic drug usernot just in the crack and heroin categories but in all categoriesneeding or requiring treatment instantly, the day the power comes in. That is clearly not going to happen. We are seeking to build up referrals over time as people are identified, sometimes through the route of going on to employment and support allowance, sometimes through voluntary self-referrals. So, I understand why they say it, but to go from where we are now to some huge big bang where every single problematic drug user is in the frame for further treatment, voluntary or otherwise, is simply not the way it is going to work.
So, do you have a delivery plan that will show how you are going to cope without the additional staff necessary for the training you are going to deliver over the next few years?
Mr. McNulty: In the first instance, what we have said and what we would like to do is, again, pilot. I do not say that in any apologetic way; these are very sensitive areas and we need to make sure that it works, and works well. Clearly, we can control pilots in England and we are working and talking with the Scottish and Welsh Governments to take pilots forward too. Although determined nationally, resources used at the localised level in terms of treatment and priorities are very important, which is why we need to work with people.
I have spoken to the Scottish Minister and there is a drug strategy unfolding in Scotland, but there are concerns that the treatment provision is so inadequate, which is not enough, but it just is. There is up to an almost 52-week referral in some cases, so Scotland needs time for the provision to improve before it starts the pilot. I am happy to work within those timelines and we are having similar discussions with the Welsh Government.
In an English context, the provisions, at their very bestthis is not true of everywhereallow for almost same-day referral, and in average terms it takes three or four weeks. I therefore think that the treatment architecture exists for the numbers, in the first instance, of crack and heroin users for the matter to be taken forward.
Sharon White: There are already a number of people who come to Jobcentre Plus who indicate that they have some drug issue, so we have confidence in our personal advisers. The key thing is that the Jobcentre Plus adviser will not be the expert referring such people to the treatment programme; where there is a suspicion that drug use is the main barrier to work, the adviser will refer that person to a specialised medical officer. As the Minister said, that is taking place on a pilot basis, and in the areas where it is being taken forward, we will, absolutely, give extra training and support to Jobcentre Plus staff.
Sharon White: The Jobcentre Plus advisers role will be to indicate the biggest barrier stopping a person from working, and the legislation allows the adviser to do so, as part of the jobseekers agreement, if there is a strong suspicion that somebody is a problematic drug user. That adviser will not then be the person who says whether a particular treatment is appropriate or not; that will be done by a specialist. But there will definitely be a programme of learning, development and training for Jobcentre Plus advisers.
Sharon White: It is quite interesting that we have analogies between this and some of the employment and support allowance provisions, which we will be looking at. They look at what we can mandate in terms of work-related activity where there are issues relating to the ethical code for some of our medical professions, and whether we can actually mandate something that is a health intervention for people.
Interestingly, our discussions with health professionals centring on drugs showed that the impact of problematic drug use can be so difficult for an individual. Actually, we found that medical professionals have beenrelaxed may be too strong a wordhappy with the direction of travel on the matter.
On the social fund, may I ask about the extent to which external providers will have discretion as to whom they will grant personal loans, as well as the amount of those loans? Furthermore, what is the extent to which the providers will be operating from a ring-fenced pool of money?
May I ask, in respect of the social fund, the extent to which outside providers will have discretion as to whom they make loans, as well as the amount of those loans, and whether the total amount that each provider will be able to allocate will be a ring-fenced annual amount?
The reason I ask is that there is a familiar ring to all this; I remember officials proposing to me that I should establish a peoples bank with an automatic right to personal loans. I resisted that, partly because I did not think that we should be in the business of facilitating the indebtedness of people who were not well offI was ahead of my time. More importantly, it seemed to be motivated by the fact that it is a rules-based Department, as I am sure Ministers have observed in their own Departments. Officials hate discretion and do not like to be given those powers, so they wanted to get rid of it. I wanted to retain it because I thought that at the end of a rules-based system, you needed some discretion in case something went wrong with all the rules, because however wonderful the rules are, you cannot cover all complexities. Are we retaining that discretion, and if so, are we privatising it? That is a rather bold stepeven for me.
Kitty Ussher: Thank you for the useful history lesson about the origins of the peoples bank idea, which I shall mull over.
In a sense, we are simply taking a primary power, and all this will be discussed and consulted upon later, but the general view is not to have a different system by virtue of it operating through a different body, so the rules, if you want to call them that, or the conditions would be the same. In a sense, there is discretion at the moment in that an adviser decides whether the current criteria for granting a budgeting or a crisis loan are met. We may want to change the criteria across the board.
We do not need primary legislation to do this but, for example, we are being slightly too subjective by spending a lot of time questioning people about precisely how their cooker has broken down and why. Perhaps it is all right to accept that for people who are not well off, just as for middle-class people, there are spikes in expenditure. While it is always better to save in advance, sometimes you have to borrow and smooth the payments over time. It is irrelevant to that whether the reformed fund is administered by an external provider in some parts of the country or, theoretically, across the whole country, although we are nowhere near that. The advantage of taking the power to work with an external provider is that they may be quite good at another thing that we want to do, which is offering better financial advice so that people do not have to borrow in the first place. As you say, encouraging indebtedness is not a good thing in itself, but sometimes people need to borrow.
Mr. McNulty: But the broader point about the availability of controlled and regulated credit for poorer communities, so that they do not go to illegal loan sharks, takes us back to Mr. Plaskitts point about trying to make credit unions and other microcredit facilities more available throughout the country rather than their current patchy existence.
I would not expect you to have the figures here, but it would be helpful if the Committee knew the current default rate or repayment rateone is the obverse of the otherfor social fund loans.
Kitty Ussher: I am happy to provide the Committee with that information, butthis is how there might be a difference from a hypothetical peoples bankthe default rate is quite low because there is a deduction back from benefits. It is less of a risk to provide a social fund loan than any other type of loan.
And then you have the problem that there is a maximum number of deductions that can be made. What happens if, for some reason, those were used up and a crisis emerged? Does this go to the crisis fund, and will it in the future?
Kitty Ussher: In a sense, we have that problem already, because there is a maximum lending amount, which is sometimes quite high. If somebody comes back with a genuine emergency after that, we have a duty to ensure that their basic health and safety needs are met. That will always be the case, and of course it is right and proper, not only under law but morally. Any system that we come up with will have to have a mechanism for someone who desperately needs their basic health and safety requirements to be met.
What about the ring-fenced budget? Will each external provider be told, This the amount of money that you have to allocate, or, This is the maximum you can allocate during the year, and the devil take the hindmost?
Kitty Ussher: That is the type of thing that we need to specify in a contract, but the general point that I want to make absolutely clear is that, by working with an external provider, we would not want to provide a lesser service in any way. We would want to add on something because a provider was better at doing things, such as providing financial advice. At present, crisis loans are arranged over the telephone, and that makes them very accessible. Demand has gone up hugely as a result, and that, in a sense, is a good thing, because more people can apply. However, we then lose the face-to-face support that some organisations in the community might be better placed to provide for certain categories of people.
Professor Gregg talked about different sanctionsmonetary and non-monetaryand seemed to be leaning towards non-monetary sanctions, especially for vulnerable people, because, if they are already on a fairly minimal income, monetary sanctions could push them over the edge. How do you see the balance between the two in the Bill?
Mr. McNulty: Not within the Bill because, as I said earlier, if you come up with a conditionality regime that relies on a relationship between an individual, their adviser and whatever plan they come up with, the absolute end game is the sanction, and the final sanction is monetary sanction. However, I agree with Professor Gregg that there are any number of stops on the way to that end game, and we envisage much greater personalisation with individuals, and the identification of their specific barriers to getting back into work and how the adviser and the individual collectively decide to work to overcome them. At some stage, it might well mean non-monetary sanctions, and I envisage them being used quite significantly.
In absolute terms, the financial sanction is the last resort so that we do not go from one perfunctory work-focused interview, through a plan dictated by the adviser, and straight to financial sanctions. Professor Gregg is right to say that this is graded, but it is rooted in the relationship between the individual and the adviser and their plan for getting back to work or to work-readiness. We do not need any of that in the Bill.
If we eventually reach financial sanctions, what will happen in practical terms to a family on a fairly minimal incomeespecially if there are childrenwhose benefits are reduced? What do that family do?
Mr. McNulty: It will depend on each individuals circumstances, what their partners do and the familys overall circumstances. I hope that people would get back on to their programmetheir journeytowards work-readiness as quickly as possible. Again, that is because we envisage, I think, a gradation of financial sanction, rather than going straight from no sanction to lopping up to 20 per cent. off someones benefit over a short time frame.
In the broader context, there are still duties under a range of legislation, including Children Acts, that will interact with the Bill, and it is important that the welfare of any young children is taken into account. I hope that that will happen in the context of the range of sanctionsnon-monetary and monetarythat, on the non-monetary side, will be agreed between the individual and the adviser. The sanctions that an individual might face prior to the ultimate financial sanction are rooted in the relationship and circumstances that have developed betweenthe adviser and the individual. We really want the measure to be that personalised and for it to take account of the impact of any financial sanctions on an individuals specific circumstances.
At this level, that is quite reassuring, but many peoples fear is that once it gets down to an individual level, there might be a clash with child poverty. How will this work in practice?
Mr. McNulty:I would hope not, given that we are about to bring in a child poverty Bill to address all that we want to do in that regard. I take the point about getting the people at the top signed up to this cultural change and focus, and like in any organisation, the difficulty is how much that permeates down. This will be nothing short of a personalisation revolutionthat trips off the tongue very lightlyfocused on the individual. It is not just about tinkering with the culture at ground level; it is about fundamentally transforming the relationship between the individual, the adviser and the system. The fact the measures are so root and branch means that they will permeate down because they have to for the thing to work. However, I accept your concerns.
I want to follow up a little on that. The Minister helpfully confirmed that the way in which Professor Gregg described the sanctions regime operating on Tuesday is how he envisages it will work. I want to mention the particular issue of people with a learning disability because obviously this process provides an opportunity for many such people who have never worked to do so. However, clearly, when we start talking about sanctions, people become concerned about what that might mean. When considering personal advisers understanding of whether somebody has a learning difficulty, the situation is perhaps analogous to that of drug users. Someone who has a relatively mild learning difficulty might not have a great deal of support from services and they might just not understand what is being asked of them. How are you going to ensure that personal advisers have the training and support to find that out, and that they make sure that people are getting chances, rather than being sanctioned when they are not clear about what is happening?
Sharon White: For many people with learning disabilities, the route will be the employment and support allowance, with which I hope a few people are familiar. The first person who they see will be a specialised disability employment adviser. Those advisers are among the most well-trained and experienced providers in Jobcentre Plus. However, there is a whole programme behind thatparticularly through pathways to work, which has been our most successful employment programme since 1997. At least in theory, there is the gateway into Jobcentre Plus and the initial interview and discussion, but there would then be a whole series of routes into specialist support.
As you say, for people with learning disabilities, there is a particularly complex and wide spectrum of needs. The condition management programmeanother acronymis one of the core elements of pathways and deals with the issue of confidence building. For many people, the real barrier is not their disabilitytheir medical condition; it might be their skills, or the fact they have never worked or have been out of work for a long time. The pathways programme, in particular, ought to be a critical part of the process for them.
There are sanctions alongside that and the Bills powers will mean that the individual will need to agree a job plan with their adviser. They will need to agree specific activities that are part of that action plan and potentially sanctionable. However, there needs to be personalisation. Mr. Masons comment about non-monetary sanctions touched on something that is potentially powerful for not just single parents, but some disabled people, because you are not talking about a financial sanction, but perhaps talking about spending a week or a period of time doing an activity that might be quite helpful for assisting such people to get back to work. The poverty angle and the worry about people not necessarily understanding the discussion with their adviser has led us to look at a wider range of sanctions that are less punitive and potentially quite helpful for peoples job destinations.
Where might advocacy fit into that? I am not decrying the skills of personal advisers who have had training, but there is a difference between a personal adviser and an advocate whose role is to help the person with a learning disability to put across their views and concerns. What will happen in parts of the country where advocacy services are thin, or people have just not had access to them?
Jonathan Shaw: I will develop the picture of how a number of policy areas are developing. You are right to highlight people with learning disabilities, because the majority of them want to find a job, but that group of people is the furthest from the labour market. We have not seen the progress that we would like on securing employment. That is why we are transforming the way in which we contract our supported employment scheme, which will be outcome-focused and use some primary providers. Specialist sub-contractors will be involved, and there will be measures to address a concern expressed by several people by ensuring that the larger primary contractor is not able to cherry-pick.
The point about advocacy brings us back to the right to control and people being able to make informed decisions with support. You are right to say the situation is patchy across the country, and we are changing the way in which we provide support and use our budgets to ensure that there is a more strategic approach. We want to see the centres for independent living developing more uniformly so that there is far more capacity in the community and people can rely on that. That is one of the themes of the reform and part of our wider programme. Kitty was talking about how the situation with credit unions is patchy, and the powers will provide an opportunity to build up capacity. I think that there is a consensus that we cannot do everything from the top down. How do you develop what is best? We all see examples of best practice, either in our constituencies or up and down the country, and we very much want that to be spread across the country, so we can use the procurement process and the levers of Government and local government to ensure that the level of service is far more complete across the picture.
I want to ask a question about joint birth registration. I think that all children have a fundamental right to know who their birth parents are, provided that someone actually knows who they are. Are the measures in the Bill robust enough to deliver that?
Kitty Ussher: I think so, as far as is possible. As you said, there will always be circumstances in which that will not be possible, and there will also be rather extreme circumstances when that will not be in the interests of the mother or the child for specific safety reasons. However, we envisage that the number of such cases will be very small, and a father could override that if he wanted to.
The balance will shift away from the childs right being intertwined with the parents relationship and its complications, and towards the rights of the father and the rights of the child. At present, unmarried parents who wish to register as birth parents must either attend a registry office together, which can be practically very difficult, even if they are functioning as a normal couple, or there must be a kind of court order whereby the father is able to make a declaration of paternity. We will get rid of that bureaucratic hurdle to the child and father having all the information on the birth certificate.
In direct answer to your question, I do not think that the measure will lead to 100 per cent. joint registration, but I hope that there will be a very significant reduction in the number of children45,000 every yearwho have only one parent on their birth certificate. I am happy to go into the details.
I am as concerned as the next person about the safety of children, but it is really important to divorce the issue of the name of the father and who he is from the issue of protecting children from a father with whom they should not have contact. Dealing with the issues for a child who has not had contact with their father, when that father is somebody who should not have contact with children, is entirely separate from the right to have that person named on the birth certificate. I am a little worried that some of the dialogue and discussion on this seems to focus on saying, You cant possibly have the name of the father on the certificate because that will pose a risk to the child. That should not be the case. Adopted children can, at a certain stage, see their original birth certificate and find out who their birth parents were, even though, for whatever reason, they no longer live with them. Can you respond to that and put my concerns to bed, as it were?
Kitty Ussher: That is a really important point. Let us take the hypothetical situation of a very dangerous father. If both parents register the birth together, both names will be on the birth certificate, even if the legal process then prevents the father from seeing the child or the mother. If the father decides, even though he is not in contact with the mother, that he wants to be on the birth certificate, he can make a declaration to the registry so that when the mother turns up, both names will have to go on the certificate, as long as she confirms that he is the father and he is able to prove it.
This provision may come into force only in the following situation. The mother will go in to register and be told that she has a duty to provide the name of the father, and she will do so. The registrar would then normally contact the father independently to say, You are the alleged father. Is that true? By law, he then has to confirm or deny that. However, if professional opinion was that the very act of the registrar contacting the father could lead to violence against the mother or the child, the process would be stopped, but even then the father could still proactively put his name on the certificate. Obviously, however, if it is reasonably thought that the father is of such character that the very act of contacting him would lead to aggression towards the mother or the child, it is right that the state should not do something that would probably have such an unfortunate outcome. However, the father will still have the right to go on the birth certificate, and can achieve that proactively.
I want to go back to the drugs treatment provisions. I think that Mr. McNulty was present for most of the questioning of DrugScope in our session on Tuesday, so he should now be clear, even if he was not before, that we are certainly very supportive of the direction of travel of this aspect of the Bill, as we always have been. However, I have specific questions on the detail.
First, what exactly do the Government mean by treatment? Is the objective of the treatment to get someone off their drug habit, or is it to manage that habit? From looking at the treatments already provided, it seems that around half of people on drug treatment programmes receive a replacement drug. That solves the criminal justice part of the problem, but does not get them off an addictive substance. From the point of view of work, we want to aim at fixing the addiction problem.
My second question is about capacity. Will the Minister give us an idea of the modelling that the Department has done? How many people does it think will be picked up with the carrot-and-stick approach, and does the required capacity exist? Will he give us more detail about this in the devolved parts of the country? I know from a visit to Wales that there is a problem there because the Welsh Assembly Government and the Welsh health service do not give the same priority to drug treatment services as happens in England. There is a problem with getting drug treatment in parts of Wales. We are running the programmes with a DWP remit that covers the UK, and that remit needs to be sensitive to the availability of treatment in all parts of the UK. Clearly, it would help if the Welsh Assembly Government and the Scottish Government were absolutely aligned with what was happening England, but if that is not the case, the DWP needs to take into account what is deliverable in those parts of the UK.
Mr. McNulty: In terms of the first partor the first partsof the questions, it is both. Clearly, the agreement between the adviser and the problematic drug user is about getting them to a stage of work-readiness or back into work. In the first instance, one of the key barriers will be chemical dependency and addiction, so this is about treating thatnot simply managing it, but eventually getting rid of itso that people can get back into work, on the starting premise, at least in this instance, that a crack or heroin dependency is probably not a good feature of work-readiness. I am not getting into whether people can maintain such a dependency and work at the same timeI have no doubt some canbecause I simply do not know. For these individuals it is about management and control in the first instance, but the end journey is to be off problematic drug use and into work. Both elements will be part of the treatment plan agreed between the individual and the adviser. That means, as Sharon was saying, much more work with the national treatment agency and others to get the proper medical assessment of individuals, not instilling such expertise in personal advisers, who have an entirely different role.
In England, all those things come under one heading, whereas in Scotland and Wales they are devolved. As I have already said, there has been discussion with both Scotland and Wales. We think that it is right to pilot throughout the UK, rather than just in England, where all those levers are to hand. There are ongoing discussions with our colleagues. It is not for me to say for whatever reason the availability of treatment in Scotland and Wales is less developed, but clearly we do not want to pilot in a situation where there are substantial waiting lists for treatment. We need to work with colleagues over the next couple of years to get to a stage at which a pilot in a Welsh or Scottish context will have some meaning and the provision of treatment will be there. We do not want to build an entire system and treatment plan around an individual knowing that there is one key barrier: treatment not being readily available. I hope that we will get to the stage with Welsh and Scottish colleagues where there will be pilots, but that might be some way down the line, when other strategies to develop and enhance their treatment provision come to fruition.
What work has the Department done to model how many people it foresees being covered? The question from Mr. Rowen was about the fact that we clearly were not going to leap from current treatment capacity to addressing everybody who has a drug problem. What kind of modelling have you done on expectations, and how do you see this rolling forward?
Mr. McNulty: The key reason behind piloting is to look at the sort of throughput you can achieve with such a model in particular areas. Some of that needs more work. The latest information for Scotland, for example, goes back to about 2003. We are working with colleagues in Scotlandsometimes with civility and sometimes with handbags through the press or whateverand we will get there. You need to know in each contextEnglish regions, Scotland and Walesthe potential pool for problematic crack and heroin users before deciding where it would be most appropriate to pilot, while also taking into account dimensions such as treatment provision.
Would be fair to say that the piloting is going to be partly a process of data gathering to assess the success of the measures in the Bill at effectively helping problem drug users on out-of-work benefits to turn their lives around?
Mr. McNulty: Partly, but only partly. If I pursue the Scottish example, given that those data are relatively old, we want to work with academics and the Scottish Government to establish what the potential pool in Scotland is, and then pilot within that. It is not necessarily that the pilot is part of the data gathering, but almost the other way round. We need to establish the parameters more clearly, as you imply, such as what is the extent of treatment provision now, and what is the potential pool of crack and heroin users. As I am sure you know, the Bill draws very wide powers. Essentially, it covers everything classified under the Misuse of Drugs Act 1971.
On Tuesday, Mr. Rowen, I think, referred to prescription addiction and tranquilizers, benzos, and all that sort of thing. Those prescription drugs are defined, but we have made it clear that we want to focus on the problematic drugs in the first instance. Not only are they problematic for the individual, but there is the slight difficulty that they are illegal, so there is a nexus between crime and worklessness.
In the very broadest sense, we take a power around alcohol, too. Everyone will know that alcohol dependency is a significant feature of worklessness in some instances. Sometimes there can be a cocktail of all three: prescription drugs, illegal drugs and alcohol. We draw the power widely, but we have made it very clearagain, this relates to Mr. Rowens point about numbersthat we will limit it to crack and heroin users in the first instance.
Regarding your point about the interface with colleagues in devolved Administrations, anything will be overcome. After three and a half years in the Home Office, I am a perennial optimist.
My final question is more general. Given that this Bill is, in many ways, a framework Bill that gives Ministers the power to draw up regulations, can you say whether or not the Committee will be seeing draft regulations for any or all of the areas across the Bill prior to our deliberations after the recess?
Mr. McNulty: As I have made clear, I want to make available as many of the regulations as possible during our deliberations. I hope that I can at least provide the Committee with a road map saying where in the Bill regulatory powers are taken. Furthermore, as much as I can, I want to provide either a framework and headline document of the regulations, or indeed the full regulations. That is a much more efficient way of working than just saying, Heres the Christmas tree. There are loads of regulatory powers and youll have to wait till the regulations.
You will forgive me but in some cases, particularly for large areas like the right to control, the way in which the regulations will be taken forward will rather depend on the broader policy framework that is developed, not all of which is in the Bill. I know that this is a complex area, so I wanted to give out a short document that essentially tries to set out what was in the Green Paper, what was in the White Paper, what was in Gregg, what needs legislation, and what is being taken forward in other ways. Rather confusingly, we are already taking forward some measures, such as the conversion from incapacity benefit to employment and support allowance, which is central to much of what is in the Bill. Some measures will be achieved through regulatory powers based on previous legislation, and others will involve brand new powers in primary legislation, with subsequent regulations.
I assure the Committee that, as far as I possibly can, I will provide at least an indication of what is going to be in the subsequent regulations, if not the draft regulations themselves.
I want to ask a few questions about transition and the provisions of clause 8. First, can I ask you very briefly about something that you said to my colleague, Mr. Howell? I think that the phrase that you used was that you were exploring the parameters of contracting out for the flexible new deal and the contracts that companies are bidding for at the moment. Contracting lies at the background of much of what is in the Bill and we wait to see how it turns out.
Things have turned out to be worse than originally foreseen, have they not? There are going to be many more long-term unemployed than were originally envisaged. You announced a short pause in the programme of bidding for contractors who want to take on the task of finding work for those long-term unemployed. How long do you think that short pause will be?
Mr. McNulty: I will answer the direct question and then provide the context. At this stage, we are still wedded to those contracts being let, awarded and under way by September. The short pause might throw up any number of issues that mean that that date needs to move. From this perspective, at this very moment, we are still wedded toI hopestarting the flexible new deal in September.
Mr. McNulty: No, with respect, this is the tail end of the bidding process. Interests were established as long ago as last October and November. We are down to a shortlist, and there is a process of working up the substance of the contracts and how they will work. It is right at the tail end of the process that the quantums are being looked at. My only problem with the premise of your question is that I cannot say as a matter of absolute fact that, over the course of the contracts, there will be 300,000 long-term unemployed rather than 100,000. Given how we have rapidly moved since as recently as last November, it is only fair that we reflect with the contractors on what looks like shifting ground, in terms of a larger pool of longer term unemployed than there might otherwise have been. That is why we have moved from an original parameter of, say, 100,000 to 300,000. I am not saying that there will be 300,000, but, given the shifting sands and the way the economy has gone, it is more appropriate to look in that regard.
That is fair enough. We may be at the tail end of the bidding process, but the discovery that something is going to be 300 per cent. higher, which is what you said in the letter300,000 is the figure that you have givenrepresents quite a development. Are you confident that you will meet the deadline of 1 October? You said that you were wedded to it, but do you expect to meet it?
Mr. McNulty: I am confident that we will have a sufficiently robust pause and reflection period to stay with the October deadline, if the reflection period shows that that is what we can do[Laughter.] I know that that is terribly Sir Humphrey and all that, but that is about the best I can say, because we are in the middle of the reflection period. I do take the point, but it would be wrong, given the circumstances that have prevailed since November and December and the labour market statistics that we saw yesterday, simply to stay on one horse because we established it last year, and to say to the providers, Theres no opportunity at all to reflect on shifting sands and different circumstances.
In that case we will wait and see, but we want to know what is going to happen and when.
Clause 8, in which you take the power to direct claimants to undertake specific work-related activity, will apply to employment and support allowance claimants as they are moved from incapacity benefit over time. In light of that, what will happen to the very large, existing stock of incapacity claimantsnot the new people coming on to it, but the stock that runs to some 2.6 million, 1.5 million of whom have been on incapacity benefit for more than five years? We do not yet know the details but, when you take those powers, what is going to happen to somebody who is part of that stock of long-term incapacity benefit claimants?
Mr. McNulty: There are two points. When we looked at the introduction of employment and support allowance, we thought that it would be 2010 or 2011 before we started going into the IB stock, as you call it, but, we have always had the caveat that the implementation of the new ESA, and its successor or otherwise, would determine how soon we got into the stock. There is, as you implycertainly from my perspectivean eagerness to start shifting people from IB to ESA at the earliest opportunity, but we will learn from the embedding of ESA. You will appreciate that there is a lag, given the assessment process and all that, but we are about to get the first indications of how the ESA implementation has gone since it was introduced in October. The process usually takes two or three months to bed in, and that, I hope, will inform how quickly we can start getting into the IB stockfor want of a better phrasebecause I take on board the points that you make.
What specifically do you envisage happening to somebody among the existing stock of incapacity benefit claimants who is aged over 50, of whom I imagine there are a number?
Mr. McNulty: As we move from IB to ESA, those people, rather like a new claimant, will be assessed and interviewed appropriately. They will then be put into either the support group, if there are sufficient disabilities for them not to be put on any conditional basis, or the work-related group, meaning they will be given appropriate help and support. Crucially, we are not telling those in the support group that they should stay on ESA, if they want to volunteer to join the work-related group without the degree of compulsion.
I think your estimate is that the majority of people will actually be in the other group, to which conditionality should apply. That is the non-support group and there will be many people involved, including many existing claimants over 50.
The White Paper says:
most existing claimants over the age of 50 will be offered a single Work Focused Interview, with the opportunity to take up further support on a voluntary basis.
Is that what it all amounts to under the provisions that you were telling us about under clause 8 and the extra help and support? Is that the sum total?
Mr. McNulty: It is a starting premise, although it will be informed by what we learn from the ESA implementation. It may be that, in terms of the Bill, the broader conditionality powers prevail. That was what we said in the White Paper. I suspect that the truth, once informed by the implementation by ESA, will sit between the two.
As things stand, under existing legislationbefore the Bill comes into effectsomebody who is over 50 years of age and on either employment support allowance or incapacity benefit can take the support that they want on a voluntary basis.
Sharon White: As you said, we are currently talking about 2.6 million people. This is an enormous practical undertaking. Part of the support will be about getting people properly identified as rightful claimants of an incapacity and disability benefit, as opposed to jobseekers allowance. We expect that there will be a number of people who do not get through the gateway on to the new ESA, but who will get the support and the conditionality around jobseekers allowance. How quickly we are able to bring in the full panoply of support that we currently have in pathways to work for those who are on employment and support allowance will be a resource question.
I accept that point, but this has been the problem all along. We have had this stock of claimants throughout the whole history of welfare reform over the last 10 years. There is a bit of tinkering around the edges and things happening for new people, but the stock goes on growing, but people are on the benefit for longer and longer, and in large numbers.
Jonathan Shaw: First of all, the ESA has gone well to date. As Sharon said, this is an enormous undertaking. You would be the first to criticise us if we had not put in place the necessary infrastructure and staff to ensure the smooth transition to which we are committed. There is also the investment that we are putting into pathways to work, which will be available for many people together with more tailored provisions. It is a case of putting your question into the context of other areas of investment that we provide to assist people to get off benefit and into work.
I do not want to take all the time remaining, Mr. Hood, but my point is about what extra provisions the Bill will give us. We already have pathways to work.
Mr. McNulty: We have said clearly that the assessment process will be entirely different and focused on what people can do, rather than what they cannot do. Your premise that every 50-year-old who has been on IB for more than five years will get through the gateway on to ESA is moot in the first place. If they do not, they will go to the conditionality regime of JSA. If they do get on, the numbers involved will be informed by the first round of the ESA, as implemented. As you implied, we have had a guess at the numberswe think it will be a 20:80 split between support and work-related claimants. However, we do not know how many people will get in initially through the gateway that Sharon focused on from the new cohorts of IB claimants. We will get more data on that as the ESA beds in,