[Mr. Bill Olner in the Chair] — Incapacity Benefit (Nottingham)

– in Westminster Hall at 12:00 am on 16th May 2006.

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Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Heppell.]

Photo of Graham Allen Graham Allen Labour, Nottingham North 9:30 am, 16th May 2006

Being officially "incapable" corrodes the confidence and aspirations of the toughest. In Nottingham, 30,000 individuals feel like that every day. We can now do something about it.

Some 18 weeks ago, the Secretary of State for Work and Pensions wrote to me, as he did to many, to let me know that I was one of 100 MPs who have among the highest number of incapacity benefit claimants in their constituencies and what the Government proposed in their Green Paper. I am sure that he wrote also to my hon. Friend Mr. Heppell. My hon. Friend is here today, but his Whip's duties prevent him from speaking. However, I know that he feels strongly about getting people off incapacity benefit, as does my hon. Friend Alan Simpson.

As the chair of One Nottingham, our revived local strategic partnership, I know that it is keen to seize the opportunities to be offered by the Green Paper. Individual partners in my city have already done some tremendous work. The city council, Jobcentre Plus, the greater Nottingham partnership, the learning and skills council, the voluntary sector and many others have introduced innovative and important projects.

Those partners and others need to build on that work, taking their efforts to the level necessary to meet the magnitude of the challenge to be set by the Government, doing so not from a bureaucratic perspective but from the perspective of the incapacity benefit claimant. We are doing so in close co-operation with the skills board, one of the five theme partnerships that work closely with One Nottingham. With the lowest rate in the United Kingdom of level 2 achievement, and the UK's worst reading levels atage 11, they know the problems that Nottingham faces. They also know that long-term preventive measures in education and skills are needed to complement the remedial measures necessary to deal with incapacity benefit.

It is One Nottingham's intention to respond promptly when the Government ask for expressions of interest in creating a city strategy on incapacity benefit. Local partnerships deliver. They have done so in Manchester, where £1.75 million of neighbourhood renewal funds have been used on the highly successful stepping stones project, and in Edinburgh, where the equivalent of the local strategic partnership has led innovation on incapacity benefit.

One Nottingham will allow unique access to all the partners in our city, including organisations dealing with crime, health, education and liveability as well as skills. We also intend working closely with our conurbation and county partners. To take matters forward, a consortium will be created that will include key local and national players. It will pool money, create new flexibilities, and push back the boundaries of devolution. Beyond that, it will work out the most effective structures for execution and delivery, which can be monitored and held to account. A lot of planning has already taken place. During the past three months, our local area agreement, our floor target action plan and our community strategy have converged to present an aligned and coherent set of targets, which can be the foundation of our city strategy.

The local area agreement sets a target for the reduction in the number of incapacity benefit clients over three years. The target will move from the current 65 per cent. of people in our city in employment to80 per cent. The target reductions for invalidity benefit claimants in our city have been set at 1,129 this year, 2,258 next year and 3,387 the year after that. That may sound ambitious, but for Nottingham to reach its share of the Government's target of a 1 million reduction will require 6,425 people to leave our incapacity benefit register. That is another indication of the efforts that will be needed to take us to a different dimension—more even than what has already been done.

Our local area agreement stretch targets already link to specific evidence-based programmes on training, child care and health. That valuable pre-planning will obviously sharpen as our expression of interest is prepared, and if it is successful in June, we shall want our consortium to be up and delivering before the end of the year.

We are delighted that, within days of the launch of the Green Paper, the Secretary of State accepted my invitation to come to Nottingham and give the keynote address at our One Nottingham conference on building a city strategy for incapacity benefit. Ironically—or appropriately—that conference was held in the Aspley ward in my constituency, where one in eight people is on incapacity benefit and 56 per cent. of people have no qualifications whatever. It is the ward with the lowest entry rates into higher education among the 18-20 age group in the whole of the UK. It was appropriate and welcome that the Secretary of State took the message to a heartland area that is so obviously in need of the strategy.

That was followed up on 31 March by a broad-based series of workshops involving officials from the Department for Work and Pensions and many local partners, which began thinking through what shape our strategy should take. That work continued and last Tuesday—9 May—a delegation of partners from One Nottingham was able to play a full part in the DWP's stakeholder event on incapacity benefit in London. We were pleased to welcome the new Minister; it was probably his first official engagement after the reshuffle. He made a telling contribution at that event, and I am sure that he will do so today, too. The Secretary of State said:

"I very much welcome One Nottingham's support for this initiative and look forward in due course to seeing your proposals as to how you would use a City consortium to build on your existing work and that of your constituent partners."

One Nottingham, with its partners, is ready to submit that expression of interest. It is a big task, but we have proved that such big tasks can be done; an example is unemployment. In Nottingham, unemployment has fallen by 2,700 to 11,300—that is according to the International Labour Organisation measure—since 1997. That is not just a statistic; it means that 2,700 individuals and their families now have self-respect and a better quality of life, and are now contributing to society, rather than feeling that they are being a drain or burden on it.

However, we must do more, especially to address that forgotten group of those trapped on incapacity benefit. There are 17,600 IB claimants in Nottingham, more than half—53 per cent.—of whom have been on IB for more than five years. The excellent district manager of Jobcentre Plus told me that a person who has been on incapacity benefit for two years or more is more likely to die or retire than find work. That is a damning conclusion from a local expert professional. We will do something about that. Some 7,700 of that number have mental problems, and I will address those difficulties later. In addition, there are 6,820 lone parents and 10,200 older workers on related benefits. Reaching and helping those groups will be the mission of our city strategy.

On top of the human price that we pay there is also financial waste. Around £5.6 million is paid in incapacity benefit in Nottingham alone each month. Add to that housing and council tax benefit and forgone income tax revenue from people who are not working, and the bill mounts up massively. We are interested to explore the incentives for recyclingany savings made into more incapacity benefit programmes. I am pleased that the Government floated that as a possibility; we need to explore that carefully.

The savings in incapacity benefit spending need to be retained locally—not nationally or even regionally—so that local partners can see something for their effort and investment of energy. The money needs to be reinvested locally to expand the city strategy even further, so that we can get the next tranche of people nearer to work. It needs to be retained locally because it needs to flex and we need to be sensitive to the local context and initiatives, rather than imposing a top-down model.

The average IB beneficiary receives the king's ransom of £83.86 a week. For those who say that the higher levels of benefit paid to long-term IB recipients have encouraged people to stay on IB, let me point out that in Nottingham 42 per cent. of all IB claimants are not getting the higher rates. They did not have sufficient national insurance and so have to depend on income support. That group has been increasing while the number of IB recipients has been decreasing. More people in Nottingham—7,300—have to claim income support because they did not have sufficient national insurance than are receiving the long-termIB rate. There are 7,200 such people.

In households in which no one goes to work, both money and self-esteem can be in short supply. A lack of positive role models can result in generation after generation getting stuck in the benefits trap. Getting people on to IB and its predecessors—invalidity benefit and sickness benefit—was sometimes seen as a way to mask soaring unemployment levels. People in Nottingham—in the constituency of my hon. Friend the Member for Nottingham, East, in my own and in Nottingham, South—have paid a heavy price for that policy failure over many years. We are delighted that that is now being seriously addressed by the Government.

One Nottingham, which was created to help in deprived areas, sees the clear link between benefit dependence and hardship. It was shown in the figures that I received from the Department for Work and Pensions all those months ago that half of the most severe pockets of deprivation in Britain are in the 100 constituencies with the largest number of IB claimants. If we tackle incapacity benefit, we tackle poverty. People in my city do not accept a system that perpetuates hardship and denies people the opportunity to better their lives by accessing the world of work, and we want to do something about it. The vast majority of people who start receiving IB want to go back into work. That has been proven in survey after survey as well as by anecdotal experience, which I am sure hon. Members on both sides of the House share. Our city strategy will provide those people with tailor-made, local help to go back into work.

The Government have made great progress since 1997, reducing the number of new claimants by one third and turning round the massive rise that took place when numbers trebled between 1979 and 1997. The Government have also put the pathways to work programme into every core city in the country, and those programmes have piloted a new approach that offers increased support to IB claimants in return for an increased responsibility to do what they can to return to work. By 2008, IB claimants in Nottingham will, for the first time, be able to benefit from the pathways to work programme, which is being rolled out nationally. It was pioneered successfully in our nearest city, Derby.

One Nottingham obviously has an interest in the impact that IB claimants can have on regeneration—for example, in mentoring youngsters, teaching literacy or helping to reduce antisocial behaviour. If just one in 10 IB claimants gets back to some form of activity in our city, there will be 3,000 extra brains and pairs of hands helping to regenerate our city. We want to build on the work of the voluntary and community sector, Enable and the local learning and skills council to create volunteering experience as a route to work. Volunteering is a safe place in which to build up confidence, self-esteem, experience, skills, the work habit and discipline. It is, in effect, work experience, which looks good on a CV, and the volunteers realise that if they can work for free, they can work for money. Most areas in the country have a volunteer centre accredited by the national body, Volunteering England, which operates like an old-style job centre and which the consortium would look to develop in our city.

Although the new deal for disabled people has shown increased success, with job starts for incapacity benefit claimants in Nottingham increasing from 120 in 2002 to 390 in 2005, and 52 per cent. of all those registering for the new deal for disabled people in Nottingham starting work in 2005—a very good record indeed—the scale of the activity is not large enough to do more than scratch the surface. Our consortium will need to examine how we can use outside providers, such as the Shaw Trust, Working Links, Work Directions and many others, to work alongside local providers to liberate the talent and potential in the disabled people of Nottingham. One Nottingham and our partners will never advocate forcing people with physical and mental difficulties back into work. That is not appropriate. However, we will not shrink from using our city strategy to challenge the fatalistic culture of storing people on incapacity benefit without offering them ways forward.

When we receive documentation relating to an expression of interest we will need to think seriously about governance and how to take the consortium forward. How the consortium works and how it is structured will be key. None of the local partners will have dealt with central government on a task of such size and scope. Passive representation will not do. Each consortium member must bring revenues to the pool and take responsibility for specific targeted and measurable activity. A small full-time core team is likely to be needed, under its own chief executive, to measure achievement and provide a forum for day-to-day learning and interaction of the many providers that we will need if we are to make an impact on the problem.

One of the key early decisions of the consortium will be how to franchise and commission our 6,000 share of the 1 million national target. That represents more than 700 incapacity benefit claimants whom we wish to get off the register in each of Nottingham's nine area committees, should our consortium choose to break the task down at that level, so that it lies alongside the new developments taking place on neighbourhood management. Even that work will need to be further sub-divided into target groups, such as single parents, older workers and those with mental health issues. All the low-hanging fruit has been picked, so long-term relationships in each locality have to be built between providers and commissioners around workable and realistic delivery plans.

I hope that I will not disappoint the Minister in saying that I do not want a big blast of figures next year that make him feel good about how well the programme has been implemented early. I want a steady growth in those figures, rather than a quick fix that peters out, and I am sure that he feels the same.

We have been incredibly excited by the idea of taking control of the incapacity benefit challenge locally. We must now enter the uncomfortable phase of reality checking, being honest about local capacity and allocating responsibilities and accountabilities that will stay the course. Our consortium will tackle a number of key issues, the first of which is the incapacity benefit routine.

It is difficult to leave the security of incapacity benefit payments for regular work payments. A bad back, depression or stress can often recur. Members of a Jobcentre Plus focus group recently mentioned their suspicion that Jobcentre Plus wants only to talk to them to take away their benefit. They fear the transition to work and the impact on, for example, tax credits, housing benefit and final incapacity benefit payments. If the employment does not work out, they have the reverse situation. One suggestion that came out of the consultation in Nottingham is that we should look to retain stability by, for example, keeping housing benefit and free prescriptions for a transitional period. We need to reward people financially for working by making the incentive great enough to overcome their fear of moving from incapacity benefit and reassuring them that we will take every possible step to ensure that the transition is easy and smooth and not something to fear.

The second issue is flexibility. When we first went to see the Prime Minister and the then Secretary of State at No. 10, it was encouraging to hear over and over again that the Department and the Government wanted to be as flexible and open as possible on ideas about extending and changing some of the rules that inhibit those on incapacity benefit in getting back into work. Some excellent flexibilities already exist, and incapacity benefit claimants can earn up to £81 per week for one year, although many do not know that or do not know how to take advantage of the arrangements. A locally based city strategy will, I hope, be much better placed to get that information to claimants and be sensitive to their needs.

Giving us real authority to act locally will mean that our consortium is able to judge how resources can best be applied by sector and by area. The problems in the white working-class estates of outer-city Nottingham that I represent will, of course, differ from those in the inner-city, multi-ethnic areas of mixed housing tenure that are more typical of the constituency represented by my hon. Friend the Member for Nottingham, East. We will need to be sensitive to such problems, and by creating city-based strategies with a lot of flexibility, the Government will allow us to tackle them all at the same time.

I must flag up for the Minister the fact that the move by Jobcentre Plus towards regional contracting has taken away local district managers' ability to invest in and purchase what they know is needed. The Department for Work and Pensions could demonstrate flexibility by looking again at whether it can let the local Jobcentre Plus manager have more control over his or her budget. I do not expect the Minister to answer that question today, but if he has any thoughts about it and cares to write to me, that will be most welcome.

We need to work out how those with short-term or treatable incapacity spend the period of their rehabilitation on incapacity benefit and then come off it once they are fit again. We need to offer a menu to help reintegrate these people back into work and we need to plan flexibility and discretion in relation to incapacity benefit exit. The individual's variability of performance over time is also a critical issue, particularly where their mental health is involved and they suffer, for example, from bipolar illness. We need to use reasonable adjustments. We need to make use of volunteering and permitted work, but there should also be also scope for social firms and charities to pioneer alternatives. The Government have offered flexibilities, and the Minister knows that we will test that offer.

The third issue is re-skilling. In the case of longer-term injury, it is easy for claimants to find their skills out of date. A year out of the information technology industry, for example, can be a long time. Even outside fast-moving technology industries, the pace of change is increasing year on year. Skills upgrades need to be created by all our partners. We need to break down the artificial barriers and silos from top to bottom, including in central and local institutions.

If we have our own city strategy, there will be nobody to blame. If we cannot get deals done locally, we will not be able to point the finger at a convenient Minister and say, "If only they did this" or, "If only they did that". If the responsibility is ours, we will need to face up to things locally and strike deals. Where deals cannot be made, we will come to the Minister and ask for the barriers to be removed, but the onus will be very much on us.

The rules must be made crystal clear and ensure, for example, that when an IB claimant follows an agreed training and further education programme they do not lose their benefit. Further education institutions that reach out to claimants who are long out of education should be rewarded and not penalised, for example, by Ofsted, since success rates might be low. I have mentioned that to the Minister in private. Where FE institutions fulfil their educational mission to reach out to those without qualifications, that should be understood in Ofsted's marking and weighting system. Ofsted should not say that such people should attain at the same level as those who are cherry-picked by the establishments, often against those establishments' judgment and drive. However, when people are marked down, colleges have to take those unenviable decisions.

Fourthly, there is a need to build bridges to work. I have alluded a little to that. It is difficult for those who have never been on benefits to appreciate how it feels. I have had a brief spell of unemployment, and even though I knew I had a job coming up at some point in the future it was completely debilitating. It knocks a person's confidence sideways in a way that nothing else can. It destroys self-esteem, it is demoralising and it can often evolve into depression and even clinical depression. It is easy for someone to believe that because they are claiming incapacity benefit, they are generally incapable of any work or any contribution, or of being any use to society or their immediate family. That can happen not just if someone has an ailment or injury but if they have wider mental problems.

Morale and motivation needs to be revived. Effective person-to-person contact has to be ensured and, above all, our Nottingham approach will recognise thatIB claimants should have an important say in their road map to a better future. We will also ensure that our programmes meet their needs rather than just fuelling local or national bureaucracies.

It will be our ambition to ensure that everyIB claimant has a personalised road map that shows the training or work experience that they need. Over time, we will develop ways of putting real choice in their hands about where they can access the help that their map signposts for them. One way might be to trial a pilot in learning or guidance accounts. Those should not just be the preserve of undergraduates or people at advanced level. As the revival of the learning account concept takes place, I hope that incapacity benefit claimants will find their rightful place in that pantheon. We have to live the rhetoric that many people on incapacity benefit want to get back to work. We must trust them to take the right decisions, with the right help, for themselves.

Our Nottingham programme will have anIB claimants customer group, which will let us know whether we are meeting the needs of claimants. We are also considering using Jobcentre Pluses and geographical information systems—GIS—to door-knock. There is nothing like good, old-fashioned canvassing: eyeballing people and asking what they need and when they need it, with trained advisers taking the work of the estate-based local learning champions, a concept that we have pioneered in Nottingham, to a higher level.

Why not reward those on incapacity benefit who mentor a youngster at school, help the elderly or take on work as a park keeper as a bridge towards more appropriate and fulfilling work? That would reward those who want to keep working but cannot necessarily work conventionally. It would augment their income and raise their aspirations, confidence and experience. Nottingham is lucky enough to have strong community and voluntary sectors, and it is our aim that they will play a key role in our city strategy on IB issues.

Finally, we have already identified the work on mental health that we need to do with our health partners. Many people just need personal encouragement. Employment and the full reacquisition of social skills are as important as treating medical symptoms. There are massive service delivery implications for GPs and cognitive behaviour therapists, who will be needed to work not with the odd customer but with thousands of people. That needs to be carefully worked through, with colleagues in the health service and primary care trusts—particularly in the new era of practice-based commissioning.

There is also a need for employers to be given awareness training and education; they need to be able to achieve compliance with the Disability Discrimination Act 1995 and provide appropriate mental health support to employees as well as occupational health support for those returning from time on incapacity benefit. There is a leading role for private and public sector organisations in piloting the arrangements and setting an example.

Most of the surveys and studies do not bear out the view that employers do not want to take people who have been on incapacity benefit, or that there is discrimination against people with a mental incapacity or mental ill health. None the less, an example should be set, not least by the big public and private sector employers. We need the whole team at the table, in the local context, in Nottingham, just as is happening at ministerial level in the national context.

As the Secretary of State said last week, we are beginning

"a process of policy renewal that will help us to better address the endemic problem of worklessness facing many of our major towns and cities. Looking to the future. Being prepared to adapt and change. Always being prepared to develop new and better tools through which we can support local re-generation and economic development."

In the brief conversations that I have had with colleagues from other parties—the Conservative and Liberal Democrat parties—I have gained the impression that they, too, are anxious to exploit to the full the possible advantages of the new way of ensuring that people on incapacity benefit can lead more fulfilling lives. We certainly want to replicate that at local level. The issue is not a partisan one; it affects people—indeed, it affects claimants—of all political views or none, and does not discriminate on those grounds. We should not either.

Our consortium would be keen to add some of the seedcorn funding, which I understand will amount nationally to some £90 million from the deprived areas fund, but we see that only as an addition to the pooled resources that we have locally. A key point will be to enable all the individual organisations and agencies to come together. Of course we will welcome the additional resources, but the project lies in our own hands. The real prize in the next few months—this is something else that is evident from our consultations—will be to build a relationship, with trust, with central Government, so that the proposed freedoms and flexibilities can be negotiated with our national partner at the Department for Work and Pensions, to bring about real benefits for the people of Nottingham.

In Nottingham we know that the number of incapacity benefit claimants needs to be reduced. We are working towards a clear strategy on how to do that. Working closely with all our partners we intend to submit an expression of interest to the Department for Work and Pensions, as soon as the Minister requests it. I wish him well in his new appointment and hope that he will retain his position long enough to see the initiative through. It will be a long-running effort and will take a lot of setting up. I am not trying to keep the Minister from his ultimate rightful post in Cabinet, but I hope that he will be allowed a sufficient period to get involved in the issue and see it through—not just for Nottingham's sake but for the sake of all the other pathfinders who get city strategies in the first wave. I could not wish for anyone more capable to do the Minister's job, and we do not want to lose him, now that he has started out on the path.

I hope that by raising this debate, I have reinforced the Minister's view that the agencies and organisations in Nottingham collectively look forward to meeting the challenge of making a serious impact, not only on the problems of incapacity benefit but on more fully realising the potential of the individuals who claim it but would welcome a return to appropriate work. Nottingham is a great city; our revival is continuing and our ambition is not to let the talents and potential of a single person in our city go to waste.

Photo of Danny Alexander Danny Alexander Opposition Whip (Commons), Shadow Spokesperson (Work and Pensions) 10:05 am, 16th May 2006

I start by congratulating Mr. Allen on securing this debate on a very important subject for Nottingham and the whole United Kingdom. I congratulate him also on the detailed and eloquent case that he set out on the proposals coming forward within Nottingham, and on the leading role that he clearly plays in his community in trying to develop some of the ideas and thoughts about benefit reform and in helping back to work people who have long been excluded from the labour market. He clearly plays a leading role in making such things happen in his community, and that is a model that many hon. Members could follow. I congratulate him for all those reasons.

The hon. Gentleman set out the scale of the problem faced by people in Nottingham; his constituency and those of the other Labour Members who represent the city are among the 100 constituencies with the most incapacity benefit recipients. As he said, 17,600 people are on incapacity-related benefits in Nottingham. It is also interesting to note the high overall level of economic inactivity in the city: 36 per cent. of its population are classified as economically inactive for reasons of incapacity or for the many other reasons that he set out.

The hon. Gentleman drew particular attention to an important point that needs to come out more in the wider debate about benefit reform and helping people on incapacity benefit back into work: for many in the groups that we are discussing, low educational achievement is another barrier to returning to work.

Drawing attention to Nottingham's problems helps shed light on the broader issues facing many cities—and indeed rural areas—in the UK. After all,2.7 million people are on incapacity-related benefits across the UK, and the December 2005 figures, although they may have been updated since, show that over the whole of the UK, 7.94 million people are classified as economically inactive. The Government are finally taking on the challenge to raise the level of economic activity and help people on incapacity benefit back into work, and I welcome that; it is important and timely, and it has come not a moment too soon.

Photo of Graham Allen Graham Allen Labour, Nottingham North

As we have a little time, perhaps the hon. Gentleman will indulge me. I should like to reinforce his point about educational attainment being one of the key factors that we need to bring to bear in our partnership work on this issue. The powers and extra assistance from the Government on IB claimants are extremely welcome, but locally we need—we are attempting it at One Nottingham—to seek a city strategy. That is one of our priorities; the second—there are three—is to teach social behaviour in all our primary schools so that youngsters can get the social toolkit to learn, so that they qualify better than youngsters have in the past, and go on to further education, training and employment, so there will be less of a pool from which those on incapacity benefit can be drawn. We need to tackle the issue on lots of different levels, and the hon. Gentleman was right to emphasise that.

Photo of Danny Alexander Danny Alexander Opposition Whip (Commons), Shadow Spokesperson (Work and Pensions)

I am grateful to the hon. Gentleman for that intervention. He makes a good point.

Also, I should have welcomed the Minister to his place at the beginning of my remarks. I am delighted to see him here and to congratulate him on his appointment. I look forward to working with him as the welfare reform process continues. I am sure that he will want to give due emphasis to that process in the coming weeks.

The partnership approach taken by One Nottingham is one that the Government should encourage not only in Nottingham but throughout the country. It is important to bring together people and organisations from the public, private and voluntary sectors to deliver in a coherent, co-ordinated and locally driven way—that is an important consideration—policies and proposals to help back into the labour market people who have been out of or excluded from it for a long time, perhaps for reasons of incapacity. A lot of hard work is being done in Nottingham to bring people together, and that can be furthered. The hon. Gentleman set out clear targets, and made it clear that Nottingham will soon be ready to submit its application. That has been successfully advertised and highlighted today, and I congratulate him on that.

The hon. Gentleman rightly drew attention to the social and human waste that incapacity benefit creates. A number of people have been on incapacity benefit for a substantial time. He drew attention to the often-quoted statistic that people who have been on incapacity benefit for more than two years are more likely to die or reach retirement age than they are to find work. That is a damning indictment of the current system. Many different barriers prevent people in that situation from getting back into work, such as having a lack of educational skills or confidence, or having an illness or disability. There are also more physical and practical barriers to prevent people from returning to the labour market.

The hon. Gentleman has made important points about the local situation in Nottingham and contributed to the broader UK debate about the welfare reform that we hope is about to get going. The concept of the city strategies, in which available funds—often a multiplicity of funds; I know that in Glasgow there are many dozens of strands of funding devoted to helping people back to work—are brought together and other funds may be brought in, is a welcome approach. However, there are several issues that relate to that approach that I want to draw to the Minister's attention, and I will be grateful if he can respond to them.

The hon. Member for Nottingham, North talked about scaling up in Nottingham. One consequence of the greater focus on welfare to work is that current projects and programmes need to be scaled up dramatically to enable them to meet delivery targets, but such scaling up raises issues of local accountability and responsibility.

It is important that the Government's approach to welfare reform should not be to deliver it in a top-down way, but to allow local communities and organisations to develop their own strategies, programmes and ideas about how best to tackle the problems that they face in their own communities. The hon. Gentleman talked about the deprived areas fund that the Government are looking to set up. It is worth noting that that fund will be partly resourced through ending the action team for jobs model, which works in Nottingham, in Inverness in my constituency, and across the country. Can the Minister provide some reassurance that the areas that will be targeted by the deprived areas fund will, by and large, be those that currently benefit from the action team approach? In many parts of the country, including Nottingham, there could well be some concern that the important community engagement work of the action teams will be lost.

Photo of Graham Allen Graham Allen Labour, Nottingham North

This is a rather paradoxical point. I am keen to have as much local discretion as possible and, going beyond this debate, I believe in constitutional independent local government, in getting off our backs. However, having been in this position of almost supplication for decades, it is not always easy to release people locally to get on and do the job. People are still unsure of where to go and how to take on those responsibilities. It is important that the Department is still there to offer advice.

We have had tremendous advice from officials in the Department for Work and Pensions and from people such as David Simmonds at the Centre for Economic and Social Inclusion that has been invaluable in pointing us in the right direction so that we do not miss this fantastic opportunity because of inexperience in running our own affairs at that level. I hope that the Department will continue to do that with a light touch and to guide us in the right direction.

Photo of Danny Alexander Danny Alexander Opposition Whip (Commons), Shadow Spokesperson (Work and Pensions)

I am grateful to the hon. Gentleman for that intervention.

I want to speak about the national role of the DWP in bringing to fruition some of the local ideas that we have heard about today. The Department's first role is to introduce legislation following the Green Paper, and any indication that the Minister can give us today about the likely timing of that will be gratefully received. Given the range and detail of the issues that have been rehearsed today relating to the strategy in the city of Nottingham and the rest of the country, it is important that sufficient time be allowed to scrutinise the matter in detail. I would be grateful for anything that the Minister can say about that.

Two other issues relating to the approach so far about which there are real concerns are, first, funding, and secondly, the arrangements for contracting with voluntary sector organisations such as those that the hon. Gentleman told us were involved in the consortium in Nottingham.

The overall package in the welfare reform Green Paper for funding the pathways to work scheme was £360 million. The hon. Gentleman drew attention to the importance of rolling out the scheme properly in Nottingham. I have looked at the pilots elsewhere, and it is clear—this is the view of many of the organisations that have commented on the matter—that £360 million is not enough to ensure that a roll-out on the scale that the hon. Gentleman wants in Nottingham and elsewhere can be taken forward. Even a calculation based on a written answer that I received suggests that the cost of the scheme is £400 per claimant, in which case over two years the total funding needed would be £440 million. However, that estimate does not include the cost of the back to work credit or the condition management programme.

I was surprised, to say the least, having tabled a parliamentary question to ascertain what proportion of that £360 million is for back to work credit and what proportion is for the condition management programme, to be told simply that the information was not available. That raises concern in my mind about how the Department calculates the figures and whether we will see pathways lite, which is not what people in the One Nottingham consortium or anywhere else really want or need. A further point is that the£360 million will supposedly come from existing DWP budgets. I am keen to hear from the Minister where the axe will fall to release even that inadequate sum for rolling out the pathways to work project.

I mentioned the condition management programme, as did the hon. Gentleman, in relation to necessary medical assistance. A successful condition management programme rolled out nationwide is dependent on a supply of properly qualified professionals such as cognitive behaviour therapists, but there is a shortage of such therapists and they take up to five years to train. It is important that the Minister in his response addresses how to ensure a supply of properly trained condition management professionals and properly qualified employment advisers. I also want to know how the importance of having people in those areas comes up against the current cuts in DWP staff in a number of areas—and, as I know from my own experience, how that has an impact on morale.

The hon. Gentleman drew attention to the important issue of engaging the voluntary sector and the private sector in delivering many of the back to work schemes that are starting. The separation that that entails and the engagement of such organisations are very important. The Government have talked about that, which I welcome, because a separation between the benefit decision-making process and the back to work help can be an important tool in engaging people in back to work activity without their fearing that they will be challenged on or lose their benefits. That might lead to Jobcentre Plus and the DWP moving into much more of a commissioning role: rather than delivering back to work services themselves, they will commission voluntary and private sector organisations of the sort that the hon. Gentleman mentioned.

However, it is important to know how these contracts are to be set up. I think that that will be specified in legislation at national level; perhaps the Minister will spell that out. The Green Paper addresses the engagement of the voluntary and private sectors on a target-driven basis. In terms of the setting out of the contracts, it is important that there be sufficient flexibility to allow the kind of local initiative that the hon. Gentleman described. It is also important that sufficient time be available within a contract for a local organisation to develop and work through the best methods for engaging people in its area. Too often we hear about voluntary organisations coming up with programmes that, as the hon. Gentleman described, spend too much time working on next year's funding application rather than delivering the services that they are setting out to deliver.

It is also important, as the hon. Gentleman said, that welfare to work—welfare reform—provides real support for employers. I was privileged during the Easter recess to visit the Working Links project in the Parkhead ward in Glasgow; some such projects have been picked up on in the plans being developed in Nottingham. One of the most striking things about that Parkhead project is how it engages with employers to help individuals once they have been placed in work not to lose that job. It can often be found that for people who might never have been in work or who have not engaged with the workplace for a long period, the basics of being in employment—such as turning up on time and dealing with their employer on a day-to-day basis—are an entirely new experience, and having support to deal with that is very important. I hope that providing real support to employers, and beefing up the access to work scheme, which is very important for helping people with disabilities back into work, can all be part of what the Government introduce.

The hon. Gentleman rightly drew attention to the importance of mental health, and he will know that depression and anxiety-related conditions are now the largest cause of new on-flows to incapacity benefit, and that people once on incapacity benefit for other reasons often become depressed as an associated condition, so tackling those mental health-related conditions is very important. He said that the One Nottingham consortium was planning to do that.

That requires reform of the personal capacity assessment in particular. In the Green Paper, the Government talked about setting up a taskforce to look into reforming the Pca for people with mental health conditions. I understand that that taskforce has still not been set up. Will the Minister address that? Dealing with this issue is of great importance in terms of the wider point that the hon. Member for Nottingham, North made on the need to provide support that is as locally driven and flexible as possible, to help people in Nottingham who need it to get back into work.

Photo of David Ruffley David Ruffley Shadow Minister (Work and Pensions) 10:24 am, 16th May 2006

Welcome to you on this fine morning, Mr. Olner, and welcome also the Minister, for whom I have a great regard. I want to say on the record for all those who will read this debate that I see it as part of my job as shadow welfare reform Minister to work co-operatively with him.

Welfare to work is a key part of social justice, which is an objective that I believe all politicians of good will sign up to. We may differ on the means but not the objective, and I am sure that everyone reading this debate will want my party to work co-operatively with the Government and the Liberal Democrats to take politics out of the issue as much as is humanly possible during debates on the Bill and beyond. I congratulate Mr. Allen on another typically insightful parliamentary contribution.

The debate is timely, as the introduction of a Bill to implement parts of the Green Paper and the city strategy is a key part of the Secretary of State's agenda. We do not know much about the city strategy models. Co-operative inter-agency work has been done in Edinburgh, Glasgow and Manchester, but the strategies are very much in their infancy. The Opposition believe in more localism and, as the hon. Gentleman mentioned, decentralisation, but we must ensure that councils and the public sector take the role of enabling authorities and do not seek to micro-manage.

The right noises are being made on page 10 of the Green Paper about how co-operation should work. It states that employers should be involved and that budgets should be pooled to simplify funding streams so that they are more accessible and comprehensible to claimants. We welcome the idea of fewer and simplified targets. Let us hope that the learning accounts are not individual learning accounts, as that model sounded good in theory but did not work too well in practice. Much detail needs to be chewed over, and I urge the Minister—as if he does not already know this—to understand that the devil lies in the detail, as the hon. Member for Nottingham, North said.

There is a discussion on page 18 of the Green Paper about vacancy rates in the cities with some of the highest proportions of incapacity benefit claimants. There is a reference to the 100 MPs to whom the Secretary of State wrote in January. The Green Paper states:

"However, many residents of cities do not take up these jobs even though they live within easy travelling distance of thousands of vacancies."

It would be extremely useful to have more detail when we debate this matter in the coming weeks and months. Can the Minister publish evidence to support that proposition, that there are literally thousands of vacancies in those cities? Those inner cities are some of the most depressing, sad and demoralising blackspots for people who feel that they are trapped on incapacity benefit. We need to help them, but we can do that only if we have more analysis, and in particular supporting evidence for that proposition in the Green Paper.

Photo of Graham Allen Graham Allen Labour, Nottingham North

The hon. Gentleman has highlighted a phenomenon that I experience often in Nottingham, which is that people do not wish to move off their estate, whether for education or employment. One way to tackle that is to make provision on the estate for further education or other aspects of learning. Once those people are turned on to education and realise that they can get a job, they cannot be stopped from applying for further education or the vacancies that the hon. Gentleman mentioned. We must provide a trigger point in the locality for those people and then let them make the best of it themselves. I hope that that will become evident as we develop our city strategy.

Photo of David Ruffley David Ruffley Shadow Minister (Work and Pensions)

I am grateful to the hon. Gentleman and hope that he is right. However, we need more evidence for the proposition that there are thousands of accessible vacancies in those cities. Perhaps the means that he outlined—I trust that he is right—is the way for people to access such vacancies, but discovering the distribution of vacancies among cities would be a starting point, and it is necessary before we can discover whether that is a true proposition.

Photo of Ian Davidson Ian Davidson Labour, Glasgow South West

Speaking as a Glasgow Member, it is undoubtedly the case that thousands of vacancies are available in Glasgow, and thousands of people are on invalidity benefits. One of the reasons why there has been such a take-up of jobs by the influx of eastern Europeans is that most of those unemployed or on benefits are essentially unemployable and no reasonable employer would take them on in their existing situation. Given a choice between a highly skilled and motivated eastern European and someone trying to return to the labour market who may have addiction problems and has been unemployed for 10 years or so, the latter would be found to be simply not job-ready. They cannot compete in such circumstances, and background help and assistance is necessary. A simple juxtaposition of vacancies and individuals is insufficient.

Photo of David Ruffley David Ruffley Shadow Minister (Work and Pensions)

That is an important point, which is why I call for the Minister to publish some statistics. As the hon. Gentleman pointed out, the question is not quite as easy as it looks. If it were, many more people would be getting on buses and going from one side of Glasgow, Edinburgh or Manchester to the other, and we would not face this problem. I take his point.

In some quarters, such as the third and private sectors, the Green Paper's proposals have been judged to be rather sketchy. We look forward to seeing detail in the Bill and I urge the Minister to tell us the likely date of its publication, not just for my benefit but for that of the stakeholders outside this place. I shall make it easy for him: can he narrow it down to summer or autumn? A specific month is not necessary.

I want to raise some points that bear on the likely success of the city strategy model, which are applicable to all other means of welfare to work delivery, outside cities. The first is the key role of the voluntary and private sectors. In the Green Paper, we are told of the city strategy model and that

"Each consortium would also be expected to make use of private and voluntary sector providers to deliver additional employment support."

I shall not rehearse the arguments brilliantly set out in a document from the Oxford Economic Forecasting company prepared for the Employment Related Services Association. In essence, it argues for what the National Audit Office has urged: a complete top-to-bottom change in the letting of welfare to work contracts on the part of Jobcentre Plus.

There is not a level playing field. Private and voluntary sector providers already understand that some of the contracts let to them are of very short duration, which means that they cannot plan and invest for the future by hiring people and buying premises. There are low-value contracts for which it is not worth tendering. Short tendering times and last-minute tendering by Jobcentre Plus make it very difficult for the third and private sectors to make proper bids. Quite amazingly, there is sometimes a change in the specifications that a private or voluntary sector provider has to meet after their bid has been accepted.

Those issues must be flagged up because of the ambition that we regularly hear about from Ministers, which I share, to get more private and voluntary sector provision, provided it is as effective as or more effective than the public sector alternative. We are talking not about cost considerations but about what is effective in getting more people back to work more swiftly in more sustainable jobs. The private and voluntary sectors are not getting a fair crack of the whip. The city strategy will work only if we reconsider procurement.

My second concern relates to the target of getting 1 million off benefit within 10 years, and there is obviously a disaggregation of that figure: there will be a target for each city. Of course, that will mean not getting 1 million people into work but getting them off benefit. There is a huge issue here for those of us who grind through the statistics with a great deal of joy in our heart—it is a genuinely fascinating subject. The destination of some of those who come off incapacity benefit will be to return to income support or jobseeker's allowance, or just to disappear altogether. We should place proper emphasis on getting as many of that 1 million as possible back into work, not just off benefit; they are two radically different things.

I shall not delve into the view of Her Majesty's Opposition and my views about whether getting 1 million off incapacity benefit by 2016 is too ambitious. The Secretary of State calls it a stretching target, but I wonder about it. I say that for one simple reason. I pray in aid only what the Work and Pensions Committee said in the past couple of weeks, that the

"Department has not met its commitment to produce incapacity benefits caseload forecasts to 2016" and that it should do so immediately. It also stated that clarification of the baseline by which the aim will be measured is urgently required.

That must be right, because unless we know what the predicted off-flow is, particularly in respect of those over 50 who will reach retirement age between 2006 and 2016, we cannot get a sensible idea of how well the Government are doing in terms of hitting their target.

That brings me to my third concern, which the hon. Member for Nottingham, North will share: how far will the city strategy or any other strategy tackle the problem of existing claimants? That issue needs a good and thorough airing for the following reason. Having been an old Treasury hand pre-1997, I know how to qualify spending commitments and I noted that page 48 of the Green Paper states something about how the needs of the existing stock in pathways to work areas will be catered for:

"As resources allow, we will, over time, consider extending work-focused interviews to existing claimants".

Three qualifiers in one sentence—"as resources allow", "over time" and "consider"—is not bad. That bears on what so many of us have pointed out: the £360 million from existing budgets to roll out pathways to work nationally seems a serious underestimate.

Why do we say that? We know that incapacity benefit personal advisers will need upskilling, that there will need to be better training and that there is a shortage of therapists. Professor Layard is probably arguing on the high end of the spectrum when he says that 10,000 cognitive behaviour therapists might be needed to deliver pathways as a high-quality intervention in the condition management programme. Listening to this debate, I wondered whether the consortium in Nottingham will have the ability to tackle what seem to be serious supply-side constraints, be they in physiotherapy or cognitive behaviour therapy.

Employers are important in the area of welfare to work. The Work and Pensions Committee said that employers seem to have been

"largely overlooked in the Green Paper".

All of us who speak to the stakeholders—the voluntary, private and public sectors— agree with that. No matter how much help and support an incapacity benefit claimant or disabled person may receive, if employers do not change their culture there will be difficulties. They must also change it in respect of statutory sick pay and the 28 weeks for which someone who may still be under contract to a company can take time off work because of illness, be that a mental health condition or otherwise. Employers are not doing enough to intervene and give such people support, because they might have been off sick for six months before they do one day go on incapacity benefit. As we all agree, unless incapacity benefit claimants are helped and supported early in their claim, the chances of their returning to work reduce almost exponentially.

The Minister can help the city strategy model by telling us a bit more about his plans for changing statutory sick pay. What will he do to improve employers' attitudes when they work in consortiums of the kind that the hon. Member for Nottingham, North outlined? What plans does the Minister have to reform medical certification, which is first encountered by a claimant when they are on statutory sick pay and are going to their local GP? We need to hear more about what the Government intend to do with the new personal capability assessment, which is meant to be about what IB claimants—and those on statutory sick pay who are potential claimants—can do, rather than just focusing on the illness. To do that, we have to understand what the role of employment advisers in doctors' surgeries will be, not just for individuals on incapacity benefit, but—I stress this—for those on statutory sick pay who are not yet in the benefit system.

The Minister will want to consider all those points. I had a discussion with him before this debate; we decided—well, I did, anyway—that we are men of good will, and that what we were talking about, essentially, is an exercise in improving legislation in a crucial area of public policy and social justice as much as we can. If some questions raised cannot be answered today, I hope that they will be answered in Committee. I once again thank the hon. Member for Nottingham, North, who has, typically, raised an important issue, and has done so in his own special way.

Photo of Jim Murphy Jim Murphy Minister of State (Department for Work and Pensions) (Work) 10:41 am, 16th May 2006

I am delighted to respond to this debate initiated by my hon. Friend Mr. Allen, who is not only a Nottingham Member of Parliament but chairman of One Nottingham. In the short time that I have been in this job, he is the Member I have seen the most of, but I am not complaining about that; there are others I might complain about. However, over the past week and a bit, I have on occasion felt as though I were being stalked by him.

I congratulate my hon. Friend on securing this Adjournment debate. It is an important time in the development of the city strategy. Given what he says, I would be surprised if One Nottingham were not first in submitting its expression of interest to the Department. I am not saying that it has to be, but given the interest shown by him and his colleagues in the partnership, that would not surprise anyone in the Department.

Photo of Ian Davidson Ian Davidson Labour, Glasgow South West

Of course, the case for Nottingham is strong, but the case for Glasgow is similarly strong. Given that the Scottish elections are coming up next year, I should point out to the Minister that it is important that any launch does not get confused with that process. That requires bringing forward the announcement about Glasgow. The Minister was born and grew up in my constituency, but then left it to go to the other side of the world. He ought to put something back as soon as possible by recognising that Glasgow should be one of the cities chosen.

Photo of Jim Murphy Jim Murphy Minister of State (Department for Work and Pensions) (Work)

I do not know whether I have to declare an interest based on what my hon. Friend says, but before I respond to that point, I should say that I welcome my hon. Friend Mr. Heppell, who, as my hon. Friend the Member for Nottingham, North, said, was not able to participate in today's debate simply because of the rules of this place, which we all understand; nevertheless, I am sure that he wished to contribute in the same passionate way that my hon. Friend the Member for Nottingham, North, did. I also welcome my hon. Friend Ian Stewart. He, too, has taken a silent role, but I know that he is interested in the issues that we are discussing.

Photo of Bill Olner Bill Olner Labour, Nuneaton

It is a role that he plays very well.

Photo of Jim Murphy Jim Murphy Minister of State (Department for Work and Pensions) (Work)

Mr. Olner, I have to say that that is the first time that I have been intervened on by the Chairman.

Last, but of course not least, I should mention my hon. Friend Mr. Davidson, who rightly pointed out that I—and almost all my family—grew up in his constituency, in whatever configurations it has found itself in the past few years.

In the short time available to me, I shall not be able to answer all the questions raised during the debate. My officials have written an excellent speech, for which I thank them, but I shall not use much of it. I would rather respond to as many points as I can and save that text for another occasion.

My hon. Friend the Member for Glasgow, South-West was right to say that I grew up in his constituency. It is the most significant reason for my having energy and determination for my job, especially in respect of the city strategies, the opportunity for people to find work—it was not always there for my immediate family—and the challenges of child poverty. All of us have had different upbringings, and different experiences of income, and of the difference between wealth and poverty. Some have managed to escape poverty, but those who do so must not forget those experiences. Despite the remarkable improvements of recent years, we should remember that too many children continue to grow up in shameful poverty. We need continually to challenge it.

I need no encouragement or additional commitment to get the work done; it gives me the opportunity to restart social mobility. I have spoken about it inthe past, but I was limited in my ability to make the changes essential to driving it. Working at the Department for Work and Pensions gives me an enormous opportunity to help change that cycle of social mobility, but that change has stalled. We could debate why, but it is a generational problem.

The changes in social mobility have come about over the generations, but there are three big drivers of social mobility. The first is the family and the mechanisms that the family employs to support the children; that is partly to do with the culture of work and partly to do with the culture of aspiration. The second is education. Education is a phenomenally important driver of social mobility, particularly early-years education—and even early-months education—pre-school education and support during the first few years of primary education. The third is poverty, especially child poverty. As we know, a child born in poverty is four times as likely to live in poverty in adulthood.

We need to break that cycle of generational poverty, that inherited lack of aspiration. The Department and others are helping to overcome that problem. Although I say that it is a generational problem, we none of us have the luxury to say that the solution is generational. The problem has built up over the generations, but it cannot and must not be solved over the generations. Instead, we have the target dates of 2010 and 2020 for alleviating child poverty and gaining the aspects of full employment of which we have spoken before.

The reason why we have a city strategy—I will respond soon to the specific points raised by my hon. Friend the Member for Nottingham, North—is that we have a target of 80 per cent. employment for the United Kingdom. We are currently hovering at just under75 per cent. The employment rate in our great cities of Glasgow, London, Manchester and Liverpool is at or just below 70 per cent. Despite that, the greatest progress in the past nine years has been in the cities with the highest levels of unemployment and the highest levels of economic inactivity.

However, there are still real problems. There are problems not only in Nottingham, as we heard earlier, but in the five cities that we talk of most often—London, Birmingham, Manchester, Liverpool and Glasgow. For those five cities even to reach the current national average—not the 80 per cent. target but the national average of 75 per cent.—a further 400,000 people will have to find work .

Photo of Ian Davidson Ian Davidson Labour, Glasgow South West

Is the Minister aware that since 1997 unemployment in my constituency has fallen by more than 50 per cent., that youth unemployment has come down by more than 80 per cent. and that long-term unemployment has been reduced by more than 90 per cent.? He would have known that if he had delivered my election leaflets. However, there is much more to be done.

Photo of Jim Murphy Jim Murphy Minister of State (Department for Work and Pensions) (Work)

My hon. Friend is right. There has been remarkable progress. The areas where the problem has been greatest have seen the most remarkable improvements and turn-around. There has been genuine progress in the transformation of individual families' material well-being and employment has changed the culture within families. However, even within those families who have an adult in work, there are still too many—I think it is about 40 per cent.—in which the child experiences material poverty.

Listening to Danny Alexander, I think that the good people of Parkhead will be over-visited, as I, along with the local Member of Parliament,my hon. Friend Mr. Marshall, will be visiting the area this Friday to talk about the specifics in the east end of the city.

London is the richest city in Europe, yet almost half the children in inner-city London still experience real poverty. That cannot be right. We all agree that it cannot be right. The city strategy, pathways into work, the new deal, the national minimum wage and investment in primary education are all about driving those children out of poverty and into opportunity, so that they can help break what is an all too common cycle in generations of families.

I shall respond to some points that hon. Members have made during our thoughtful debate. I hope that it sets the tone for our dialogue throughout the entire welfare reform agenda. I thank hon. Members for welcoming me to this new post.

My hon. Friend the Member for Nottingham, North made some points about local flexibility for Jobcentre Plus managers, and I shall take him up on his invitation to reflect on whether we have the flexibility right at local level. Our approach to local flexibility must be consistent. If we say that in city strategies, local people who know the local specifics should design a mechanism that helps to drive up employment and alleviate child poverty, it is right that we should provide opportunities for people to tell us what barriers exist in national and regional policies, structures or mechanisms as they roll out those strategies and make their expressions of interest. We will do what we can to remove as many of the barriers and working operations that those who submit well-founded expressions of interest say get in the way of their ambition to deliver a locally designed, effective way of finding people employment.

Several hon. Members made the point about qualifications. I have said this before, but the generation currently in education is the first for whom the global economy is the norm. People are no longer competing with the person in the same street, country or on even the same continent. It is a global competition. To equip those children and teenagers in the global economy, skills and qualifications are crucial. One sobering statistic is that 40 per cent. of lone parents who are out of work have no qualifications whatever. That is one genuinely worrying statistic.

My hon. Friend the Member for Glasgow, South-West alluded to how we provide an opportunity for those folk who have no formal qualifications, are not in employment but have the phenomenal responsibility of bringing up children. We must strike the right balance to ensure that they learn and acquire skills and qualifications, whether academic or others, to make them more employable in the global economy. He gave his own sense of that in terms of the challenge from eastern Europe.

A question was asked about the city strategy timetable. My hon. Friend the Member for Nottingham, North will receive over the next few days detailed guidance about the expression of interest. Some very good work is being done in Nottingham, but I know that he accepts that if we are going to deliver on our collective ambition, we have to take that good work delivered by good people to a different scale and reach. That is the case for all cities that submit an expression of interest. We expect a delivery plan over the following three to four months. Our current thinking is to have 10 to 15 pathfinders in the first tranche of the roll-out. There is flexibility in that, too, because if there are more than 15 high-quality expressions of interest, we may go further.

I thank my hon. Friend for his compliments on the support that he received from officials at the Department for Work and Pensions. They will welcome his words, because they put enormous energy into the initiative, as did my predecessor, Margaret Hodge, who has now gone to the Department of Trade and Industry. She had a personal interest in the initiative. The appropriate level of support and guidance—but not interference—will remain available for local consortiums that want additional support and to share best practice.

The hon. Member for Inverness, Nairn, Badenoch and Strathspey raised points about capacity in the health service and the attitude of employers. We are in constant dialogue with officials and Ministers in the Department of Health and elsewhere on the matter. We all share an ambition—it is shared across Government, so that there is no lack of will and determination to achieve it—and we are engaged in detailed conversations about capacity.

As Mr. Ruffley pointed out, if we are to reduce the number of incapacity benefit recipients by 1 million, supporting people in getting work is not all that is needed. We must prevent people from going on to incapacity benefit in the first place. That is a matter of working with GPs, primary care trusts, and, crucially, employers.

The initiative is not just a matter of employment opportunities and the changing of employers' attitudes towards people on incapacity benefit and people with mental health problems; it is about working with employers to prevent people from slipping out of economic activity into the depression and lack of confidence that we heard described by my hon. Friend the Member for Nottingham, North, which leads them to leave the workplace and claim incapacity benefit. This is not just about getting people off incapacity benefit; it is about a sensitive approach to preventing them from going on to it—something that I am sure we can profitably discuss in the next few months. I have already engaged in conversations about that with the national employment panel.

The hon. Member for Bury St. Edmunds raised points that also arose in other hon. Members' speeches this morning. We expect that the national roll-out of pathways will largely be achieved in partnership with the voluntary and private sectors, with the proviso that he suggested that it should provide value for money and be effective. We think that working in partnership with local agencies will provide the dynamism, flexibility and spark that will help us with the national roll-out.

I have two things to say about the voluntary sector. First, now that we have greater ambitions for the voluntary sector and are asking it to do more, we cannot ask it to do so on a cycle of annual budgets and annual contracts. It is not feasible, fair, effective or cost-effective, and it will not deliver on our collective ambitions. As we all know from our conversationswith representatives of the voluntary sector, when organisations are asked what they want to do first, they often say, "My first priority in my one-year contract is to get a renewal for next year. My main role in week one is to scope next year's funding plan." It is not reasonable to request the voluntary sector to work in that way, particularly if we are asking it to do more. I hope that the hon. Member for Bury St. Edmunds is reassured by the fact that the pathways contracts, for example, will build a three-year cycle, which will give a greater sense of stability.

My hon. Friend the Member for Glasgow, South-West gave his own interpretation of the point about vacancies in cities, but it is my understanding that the Department for Work and Pensions has published a detailed analysis. I shall look at it, and if there is a gap in the analysis I shall of course do as my hon. Friend suggested. As to contracting, external consultants are currently reviewing how we contract, and whether we do so in the most cost-effective and productive way. Once we conclude that work, I shall of course share it with hon. Members.

We have come to the conclusion of a helpful discussion. I congratulate my hon. Friend the Member for Nottingham, North again, and not only on securing the debate. He and my hon. Friend the Member for Glasgow, South-West have taken a keen interest in how we support those who are economically inactive, how we drive up employment opportunities and how we end the cycle of low aspiration in families. Cities are key parts of that. They are engines of economic regeneration and development and I thank my hon. Friend for securing the debate.