COMMITTEE FOR SOCIAL DEVELOPMENT  

OFFICIAL REPORT
(Hansard)

Welfare Reform Bill Green Paper

16 October 2008

Members present for all or part of the proceedings:
Mr David Simpson (Chairperson)
Mr Billy Armstrong
Mr Mickey Brady
Mr Fra McCann
Miss Michelle McIlveen
Mr Alban Maginness

Witnesses:
Mr Gerry McCann )
Mr John O’Neill ) Department for Social Development
Ms Doreen Roy )
Ms Margaret Sisk )

The Chairperson (Mr Simpson):
We have with us today John O’Neill, Margaret Sisk, Doreen Roy and Gerry McCann. They will brief us on the Welfare Reform Bill Green Paper. Members, in their papers, have a copy of the quick-read version of the Green Paper, ‘No-one Written Off: Reforming Welfare to Reward Responsibility’, and a briefing paper from the Law Centre on the proposals within. The Green Paper will lead to the introduction of quite a lot of parity-based legislation.

The Committee wrote to the Minister on 15 May asking that Green and White Papers be made available to the Committee in good time. This was to allow the Committee the opportunity to undertake appropriate and timely scrutiny of parity-based legislation. Although the Department has indicated that the paper was sent before the summer, Committee staff did not receive it. I do not know what happened in relation to communication. It is hoped that the Department will work more closely with the Committee and its staff in future to ensure that the scrutiny role of the Committee is properly facilitated. I would like the officials to take that back to the Minister. As the officials will know, we had the same difficulty in the monitoring rounds, and we spoke with officials then — we do not want that to happen again. The documents must be provided to the Committee and its staff in good time so that the Committee can undertake its scrutinising role.

In order to save time, will you address some questions while you are giving your briefing? After the briefing, other members may have questions. Does the Department endorse the proposals in the Green Paper? Is the Department participating in, or co-ordinating, the Green Paper consultation? Will the Department include the Committee’s comments at this meeting as part of the consultation on the Green Paper? Can the Committee make additional submissions to the consultation, and when will the consultation exercise conclude?

Mr John O’Neill (Department for Social Development):
Thank you Chairperson. The Welfare Reform Green Paper, ‘No-one Written Off: Reforming Welfare to Reward Responsibility’ was published by the Department for Work and Pensions (DWP) on 21 July 2008. On 22 July, the Department for Social Development (DSD) issued the paper for consultation in Northern Ireland to over 100 interested parties; for example, Disability Action and Advice Northern Ireland.

The Committee was invited to comment on those proposals, in line with its earlier discussions with the Minister.

The Chairperson:
John, I know that you are excited but can you slow down a bit. The Assistant Committee Clerk is trying to take notes, and members are looking confused.

Mr J O’Neill:
Sorry, I appreciate that this is a familiar field for me, but not for the Committee. I may make some comment later about the problems that we have had in this exercise.

Perhaps I should begin by reiterating that this is a Green Paper from the Department for Work and Pensions. It has been issued for consultation in Northern Ireland in line with the long-standing policy of parity in social security matters. That consultation will give people here the opportunity to make their views known, and to have those views taken fully into consideration. Some of the proposals in the Green Paper relate to matters other than social security, and as the paper makes clear, it will be for the Executive to consider the most appropriate arrangements for Northern Ireland. Our Minister has not yet endorsed any of the proposals; we are not here to advocate or defend individual proposals; rather, we hope to assist the Committee in its consideration of the proposals.

The Green Paper is a further step in the ongoing process of welfare reform. There are three key principles underpinning the Green Paper. First, people should be in control of their own lives, and take personal responsibility for making the most of the opportunities available. Secondly, people should be supported by an active and caring welfare state to build their capacity. Thirdly, people should be aware of the contribution expected from them in return for help and support through the welfare system.

The aim of the proposals is to ensure that no one is forced to live their lives on benefit if they can be helped and supported into work. No one should be written off simply because they have been out of work for a long time, either because they have a disability or a medical condition. The goal, therefore, is to help everyone who can work, to work, and, crucially, to ensure that the necessary support is in place for those people who cannot work. The goal is to provide support, tailored to each person’s needs, and to give everyone the opportunity to develop the necessary skills to enable them to find, or return to, work.

The proposals set out a range of options to reduce welfare dependency and to support more people into work. The aim is to provide support to everyone who needs it, while promoting the values of self-reliance and social responsibility. It is considered that suitable work can have a positive affect on health and well-being, and enables people to support themselves and their families. It is widely acknowledged that work is the best route to greater financial security, and that paid work is the most sustainable route out of poverty.

One of the key themes of the Green Paper, therefore, is that everyone who is able to work should do so. To that end, the paper proposes a number of measures, including pilot schemes that require the long-term unemployed to engage in a programme of full-time community-based work experience; the power to require those ignoring back-to-work support to undertake full-time activity in return for their benefits; new measures on skills, including skill checks; and piloting a requirement for lone parents and people on incapacity benefit to undertake work-related training.

As part of supporting people on incapacity benefits to return to work, or to prepare to return to work, the Green Paper endorses personalised programmes of support for all new and existing claimants, increased financial provision to fund workplace adjustments, and increased supported employment provision. The paper proposes measures to promote a cultural change; just because a person has a disability or medical condition, it does not mean that they cannot play an active and fulfilling roll in the world of work. For most people, therefore, incapacity benefits should be temporary benefits. The work capability assessment will be used to ensure that existing beneficiaries are receiving the right benefit, and that their particular personal needs and abilities are identified.

The paper proposes measures to tackle child poverty, including a full disregard of child maintenance and income-related benefits, and a requirement for partners of benefit recipients, except full-time carers and parents of young children, to seek work under the jobseeker’s regime.

Members are all aware of the complexity of the current social security system. The benefits system deals with many thousands of people, all with individual needs and circumstances, and it is very complex for claimants to understand and for staff to administer. Streamlining the benefits system is not a new idea. In designing a simpler system, it still must be recognised that people’s needs are individual and varied. However, a simplified system would give staff more time to help claimants to understand their entitlement and the support that is on offer. It would also reduce the potential for fraud and error.

The Green Paper proposes the abolition of income support and favours a simplified structure of two main benefits: jobseeker’s allowance and the employment and support allowance. A considerable amount of detailed work remains to be done, and I suspect that that proposal might be for the longer term. The Green Paper also seeks views on whether the current structure of support in cases of bereavement and industrial injury could be improved in order to help people to adjust better to their new circumstances.

As I said at the outset, a considerable number of the proposals in Northern Ireland fall to other Departments. For example, the work-related proposals fall primarily to the Department for Employment and Learning (DEL). The proposal for individual budgets for disabled people is primarily a matter for the Department of Health, Social Services and Public Safety (DHSSPS), and those for joint birth registration are a matter for the Department of Finance and Personnel (DFP). The Green Paper is with those Departments for consideration.

The overall aim of the measures is to continue to reduce welfare dependency and to promote responsibility through a simplified, modernised and more flexible benefits system. The Green Paper presents challenges, which are not underestimated. However, the proposals aim to give people an alternative to a life on benefits, while ensuring that the benefits system provides the best possible support for those who cannot work.

The proposals open up the debate on the future of welfare reform. The Committee’s response to the consultation paper, along with other responses received by the Department, will be shared with the Department for Work and Pensions. A White Paper is expected in due course after the consultation exercise, leading to a Bill, probably next year.

The Chairperson:
What about the questions that I asked earlier? You did not answer any of them.

Mr J O’Neill:
I said that the Department did not endorse the proposals in the Green Paper. The Minister, when she came to the Committee, said that she would like the Committee’s views. Many of the measures have parity, and there might, therefore, be a presumption that we will follow suit. However, the Minister wants to hear the views of the Committee, and of others in Northern Ireland, and that is why the Green Paper has gone out for consultation to as varied a range of organisations as we have on our list of people to consult.

The Department is co-ordinating the consultation exercise for Northern Ireland. That has been the arrangement in the past, on the basis that we have a better idea of interested bodies in Northern Ireland. Therefore, we circulate the papers in Northern Ireland, receive the comments, and pass them to DWP. The Northern Ireland comments are then considered as part of the overall consultation exercise.

We analyse the comments in Northern Ireland in order that we can give the Minister an idea of what people said about the consultation papers. The comments are fed into the DWP consideration process to ensure that the Northern Ireland comments are taken fully into account.

The Chairperson:
Was the Green Paper sent to other Committees?

Mr J O’Neill:
It has gone to the other Departments. The Health Department is involved, as are DEL and DFP. I am not sure whether we have received their comments yet. The consultation ends on 22 October 2008, which is next week. However, if the Committee gets its comments to the Department as soon as possible, we will make every effort to get them taken fully into account by DWP.

The Chairperson:
Is that date flexible, because it is a very tight timescale?

Mr J O’Neill:
I appreciate that. DWP said that the quicker that comments are submitted to it, the better. It is up against a timetable, and the Secretary of State for Work and Pensions wants to issue a White Paper before Christmas. Therefore, DWP has limited time available. If the Committee gets its comments submitted within a few days or a week of the closing date, there is still the potential for them to be taken into consideration.

The Chairperson:
So, there is a little leeway.

Mr J O’Neill:
Yes, but not a month or six weeks.

The Chairperson:
I appreciate that, especially if the Secretary of State wants to issue a White Paper before Christmas.

Mr Brady:
The Green Paper’s title, “No-one Written Off: Reforming Welfare to Reward Responsibility”, seems slightly euphemistic, to say the least.

The Law Centre’s briefing paper encapsulates the problems with the Green Paper. Benefit sanctions are the main thrust. For instance, the Law Centre states that it has “significant reservations” about proposals to move some lone parents onto jobseeker’s allowance. It goes on to state:

“There is an opportunity to develop proposals to encourage claimants back to work that recognise local conditions”.

Five years ago, a survey found that, in relation to registered childminders, my constituency had the worst childcare provision in western Europe. How will those people with young children who are invited, or forced, to return to work cope? The American model “workfare” is mentioned in the Law Society’s briefing paper. When the “actively seeking employment” requirement was introduced, it was felt that workfare would be introduced. There appears to be a return to that thinking, which is more of a stick-and-stick approach than a carrot-and-stick approach. The carrot has been removed from the equation.

May I have the witness’s views on that?

Mr J O’Neill:
I am at a disadvantage because I have not seen the Law Centre’s report. It was not sent to the Department. However, I suspected that the centre would hold those views.

Proposals in relation to lone parents will emerge later this year, and there are further proposals in the Green Paper. The main point is that the proposals are based on a future two-benefit system — jobseeker’s allowance and employment support allowance. Therefore, some means must be found of moving people currently on income support onto the two new benefits. Due to working family tax credit, the number of people who receive income support has declined. That benefit is paid only to certain categories of people, such as lone parents, carers, and a few others. I accept that the existing jobseeker’s and employment support allowances will not easily accommodate those people. There must be some variation in jobseeker’s allowance and employment support allowance in order that they assume the income support workload.

Sanctions are part of the benefits system. However, the Green Paper is not sanction-based. Its thrust is that it must be accepted that people on incapacity benefit have been largely abandoned over the years. They have simply been put on incapacity benefit, with very little done to help to get them off that benefit and back into work. The thrust of the Green Paper is that, with help, many people who, at present, receive incapacity benefit can work. The Department accepts that there will always be some people with mental-health, physical or disability conditions who will not be able to work. An element of the employment support allowance is designed to deal with that. However, with help, many people who are on incapacity benefit at the moment can be brought back into productive work, which helps them out of poverty and contributes to the economy.

The measures to be introduced will ensure that fewer people will be abandoned to a life on benefits. They will be encouraged back into work.

Ms Margaret Sisk (Department for Social Development):
If John does not mind, I will address the issue of childcare that was raised by Mr Brady.

The Department recognises that there is a shortage of childcare in Northern Ireland. The Minister has been pressing that issue with the Executive as one that must be addressed. There is no question of forcing anybody back to work if he or she cannot find suitable work or appropriate childcare. That simply will not happen.

The objective is to give lone parents with older children an opportunity to receive training and to investigate employment opportunities, provided that they can find suitable childcare that enables them to do that. I can assure members that there is absolutely no question of people being forced.

Mr Brady:
I will make a couple of points to finish on that issue. The whole thrust of working tax credit was to encourage lone parents to return to work. However, claimants can access the childcare element only if the childminder is registered.

Ms Sisk:
I understand that, yes.

Mr Brady:
That is not a viable, in particular, here in the North. Mr O’Neill mentioned working tax credit as a means of encouraging people back to work, especially lone parents. The working tax credit system is a total and absolute shambles that has not been dealt with because it was a Gordon Brown initiative. It must be dealt with because it is not encouraging people back to work.

It is probably the worst time to introduce this legislation when unemployment figures are starting to rocket. I was going to say that the Department does not have a crystal ball to look into, but sometimes I wonder. It is a bad time to introduce such legislation, but that is not your fault, nor is it the fault of the Department.

Finally, the Law Centre has rightly highlighted the issue of mental-health problems among people with drug additions. Indeed, if those people do not take treatment or rehabilitation, they are often subject to benefit sanctions. Therefore, the Department must factor in how those people are affected by mental-health problems; something that has not been addressed in the Green Paper.

Mr J O’Neill:
Firstly, sanctions are relatively rarely used in practice. Furthermore, I have to answer for many things — thankfully; the tax credit system is not one of those.

There are difficulties in relation to drug abuse and the provision of rehabilitation, etc. The Green Paper recognises those difficulties and how people can be brought into rehabilitation programmes. It will be interesting to hear the comments of the organisations that work in that field and to see what proposals emerge from the consultation.

Mr Brady:
You have stated that sanctions are rarely used. I have worked in this area for 30 years and that has not been my experience. There is perhaps a local-office variation that also must be addressed.

Ms McIlveen:
The Chairperson has commented on the timescales given by the Department. This Green Paper was released in July. I assume that departmental officials have done quite a bit of work and that the Minister has made comment on it. Will those deliberations on DWP issues be included in the outcomes of what the Minister is likely to respond to?

Mr J O’Neill:
I do not believe that the Minister will be sending her views on it. The arrangement made with the Committee was that the Department would circulate the paper in Northern Ireland, and that the Committee would be involved in that exercise and would makes its views known on the proposals. The Minister will take those views into account when deciding what the outcome of the proposals will be in Northern Ireland.

We have sent the Green Paper to a representative list of organisations and we have received some comments on it. Furthermore, we have been dialoguing and corresponding with some people about various aspects of the proposals.

We sent the Green Paper to the Committee at the same time, and I cannot explain why it was not received. What we do know is that it was received by many of the other organisations on the list. We know that because we have received various enquiries about the proposals from various people on the list.

The Chairperson:
As a result of the tight timescale, will there be any chance of consultation on the White Paper when it is published?

Mr J O’Neill:
I am not sure that there will be any consultation. The White Paper will represent the proposals that the Westminster Government wish to include in the legislation. Until last week, we were not aware that the Green Paper had not reached the Committee and we had assumed that there was work going on in the Committee to deal with the proposals contained in the paper. It was only this week that the Department was made aware of that discrepancy. Since that discovery, we have been working with the Committee Clerk to get as much material as possible to the Committee.

Mr F McCann:
Some of my points have been covered by Mr Brady. Like him, I have worked in advice centres over the years and I have dealt with benefit sanctions that have been brought against people. Such sanctions are far more widely used than you have said. Furthermore, there seems to be a discrepancy between how the sanctions are used at a local level and what people of your level in the Department believe.

Throughout the consultation on the Welfare Reform Bill Green Paper, the Committee has voiced its concerns about the ability of people in the Department to deal with people with mental illnesses of any kind. Indeed, the failure of the Green Paper to deal with mental illness as a result of drug abuse adds to that concern. Furthermore, the Department is undertaking painful cuts to make efficiency savings. One of the gravest concerns of the Committee is that that will have a further direct impact on the Department’s ability to deal with people with mental illnesses.

I raised the point at last week’s meeting — and I raise it again: we must take a week to go through this hugely important document that will change the lives of many people. The situation is terrible. I place great store on what the Law Centre says. It is a professional organisation, and it has been in existence for a long time. However, many other advice services will have to bear the brunt of dealing with this situation. I would have liked to have been able to study what they have to say about the document.

One element is that community work can be taken up. What would that entail?

Mr J O’Neill:
I will begin by addressing the issue of staff. The new employment support allowance comes into effect on 27 October 2008. We will then be dealing with people who leave work due to illness or disability as employment support allowance customers, rather than providing them with incapacity benefit. The existing incapacity benefit caseload will not start transferring to the employment support allowance for at least a couple of years. Therefore, there will be two years to test the new arrangements for getting people back into work.

Staff in the Social Security Agency and DEL will not be expected to be able to treat people for mental illness or disability; rather, access to programmes that will deal with those issues will be available when they are eventually set up. The staff in the agency will be trained to recognise that there are mental-health and disability problems, and they will have access to medical advice from within the Department. They will be able to direct people to the programmes most appropriate for dealing with their problems. The staff will not be trained counsellors, but they will know where to direct people as part of the process.

Mr F McCann:
We live in a time when there is grave concern right across the community about suicide and self-harm. It is also widely recognised that there is a whole category of different statutory organisations with the ability to deal with, or identify, people thinking about suicide or self-harm. I am worried that people suffering from severe mental illness might be refused benefits for some reason. No one has the ability to deal with those people, and it could hoist them over the precipice.

Mr J O’Neill:
If they are existing incapacity benefit recipients, they will not be subject to the new regime until we start transferring the caseload in about two years’ time. The only people who will be subject to the new regime will be new customers from the end of this month onwards.

An array of arrangements is available to treat people, such as cognitive behavioural therapy and similar treatments. Those programmes will be developed and will be available when we start moving the caseload. It is a long and complex process. However, we will have had two years to deal with new cases. There will be refinement of the workplace capability assessment over that period to ensure that when we start moving the existing caseload, it will be a good means of identifying what work a person is capable of, or what training or help will be needed to bring that person to the stage where he or she can consider returning to the workplace.

Mr A Maginness:
My first point is that the nature of the Green Paper is premised on a society in full employment, otherwise the proposals will not work. We are moving into a much more difficult employment situation where many people will be unemployed through no fault of their own as businesses go bankrupt, etc. The document is doomed to fail if it is viewed in that context and the proposals are put into practice.

Secondly, although our benefits regime is based on parity, the administrative machinery does not necessarily have to follow what is done in Britain. There is an opportunity to consider ways and means of trying to encourage people back to work, perhaps by having a more localised administrative framework. That should be considered locally.

Although unemployment levels are fairly low here, the problem is that the level of income that people derive from work is low. This is a low-wage economy, which makes it more difficult to encourage people back to work. That fundamental problem must be addressed, and it cannot be addressed simply through the social security regime. If the main thrust of the document is to try to encourage people back to work, as opposed to forcing them back to work through a sanctions regime, there is more chance of that ambitious project working. A sanctions regime, however, will not work in our local circumstances.

The Chairperson:
Alban Maginness has hit on the point that the Green Paper has come at a difficult time, with the unemployment level across GB heading towards two million. That will get worse, and, without predicting doom and gloom, it will make the situation difficult.

Mr J O’Neill:
I accept the point about the current economic circumstances, but the Green Paper plans for the long term, and any policy would not come into effect for at least two years. It will take that length of time to set up the programmes and the systems.

I accept the need to consider a local version of the policy. However, the exercise is computer-processed, and we use the same computer systems as DWP for reasons of economy and efficiency. It is not possible to set up our system to administer that. Therefore, with the best will in the world, it is difficult to have a Northern Ireland variation on some aspects of the benefit system.

Northern Ireland has good levels of employment. Jobs are needed to put people into, and we will have to see what happens with the economy. Around 111,000 people are on incapacity benefit, and one must accept that a good many of those could, with help, be in work. The Green Paper emphasises encouragement, rather than sanctions. It encourages people to believe that they can get back to work. That may not be the work that they had been doing originally, but with training and help, they can conceive of getting back to work.

The system must accept that some of those 111,000 people will not be able to go back to work, even part-time work, because of the nature of their illness or disability. Sanctions are a last resort, and various types of encouragement, such as back-to-work arrangements, will be given to get people back to work. Evidence from work that has been carried out on workplace health, with which I have been involved, shows that people who are maintained in work with, for example, a back problem stay in work and do not go on to claiming benefits.

Some large organisations in Northern Ireland employ in-house physiotherapists to treat people with back injuries to keep them in work rather than have them go on to the benefits system. That is common in large organisations, but that facility is not there in some small-and-medium-sized enterprises. Whether more can be done to help organisations to take on people with illnesses must be explored.

Small-and-medium-sized enterprises also have difficulties in placing people with mental-health problems. Large organisations tend to be better at coping with those people. Work must be done with employers’ organisations and others to ensure that the environment is right for people who have mental-health problems or learning difficulties to get back to work.

That takes a long time, and I am not saying that it will be successful in 100% of cases. However, over the years, a proportion of those 111,000 people have simply been abandoned to exist on benefit.

Someone who does not come off incapacity benefit within 12 or 18 months is more likely to die or to retire on incapacity benefit than to get back to work. Therefore, the first two years that someone is on an employment and support allowance is a critical period. It is during that period that we need to establish what the problem is and what can be done to get the person back into work. If we get even a percentage of those 111,000 people into work, we will have contributed to the betterment of lives. We will also have contributed to improving the Northern Ireland economy and reducing poverty levels.

Mr Brady:
You have mentioned that 111,000 people here receive incapacity benefit. The statistics that we have been given by the Department show that 43·5% of those people presented with mental-health behaviour problems. Therefore, statistically, we have a much higher degree of mental-ill-health due to the nature of our society.

You also referred to forms of treatment, such as cognitive behavioural therapy, which is recognised as one of the better treatments because it has measurable outcomes. In the area that I represent — Newry and Armagh — the difficulty is that cognitive behavioural therapy is not available on the National Health Service; it is only available privately. Therefore, people on benefits cannot afford a treatment that would probably benefit them. Factors such as that must be taken into account when we consider how people with mental-health problems can secure particular types of employment.

Mr F McCann:
I would like clarification on what qualifies as community work.

Mr J O’Neill:
The two main causes for someone’s being on incapacity benefit are musculo-skeletal disorders, which are essentially back problems, and mental-health problems, a lot of which are stress rather than anything else. Those two main causes need to be tackled. Many organisations deal with the musculo-skeletal disorders through physiotherapy, and so on.

A high-level mental-health and employment strategy steering group in GB — chaired by Dame Carol Black, the National Director for Health and Work — is bringing business, medical and academic stakeholders together to develop the necessary programmes for dealing with the employment problems faced by people with mental-ill-health.

Ms Sisk:
To answer Mr McCann’s question, I do not know whether anyone has specified what qualifies as community work. One could speculate on the matter, but I have not a seen concrete definition of what is considered as community work.

Mr F McCann:
We could be sanctioned for speculating on the matter.

Ms Sisk:
I do not think that speculation would lead to sanctions.

The Chairperson:
Does the Department intend to refer claimants of jobseeker’s allowance to private- and voluntary-sector providers after a period of 12 months, for example? If so, what safeguards will the Department implement to protect long-term, vulnerable unemployed claimants?

Ms Sisk:
That is a matter for the Department for Employment and Learning rather than for the Department for Social Development. Some of the issues that have been raised, such as referring people for sanctions, will largely be dependent on whether employees of the Department for Employment and Learning think that an individual has satisfied his or her jobseeker’s agreement. I suspect that DEL does not intend to refer claimants to private- and voluntary-sector providers, but members would need to check that with DEL.

The Chairperson:
Members have listened to the departmental briefing and asked questions. Now, we must establish how the matter can be progressed. The papers that have been provided for the Committee include the Law Centre’s offer to give an oral briefing; I think that we should accept that offer. Can that be arranged for the next meeting?

The Committee Clerk:
Indeed we can, Chairperson. Members will agree that there is quite a lot to consider in the Green Paper. The Law Centre can give us an alternative perspective. I will make arrangements for its representatives to brief the Committee.

If members are content, I will speak to my departmental colleagues to determine how much more time we can take to prepare our response. That will give us a little bit more time to think about things. If time is against us, we can fit that briefing into next week’s meeting. However, if we can gain a little more flexibility, the briefing will have to be postponed until a later meeting. The Committee is due to receive a ministerial briefing next week and there will be quite a lot to talk about. It might be beneficial to have a little bit longer to think about the issues in hand, and also to inform other Committees, particularly the Committee for Employment and Learning, and to verify whether they are aware of what is happening.

The Chairperson:
Are members content with that course of action?

Members indicated assent.