COMMITTEE FOR SOCIAL DEVELOPMENT
OFFICIAL REPORT
(Hansard)
Welfare Reform Bill Green Paper
23 October 2008
Members present for all or part of the proceedings:
Mr David Simpson (Chairperson)
Mr Mickey Brady
Mr Jonathan Craig
Ms Anna Lo
Mr Fra McCann
Miss Michelle McIlveen
Mr Alban Maginness
Witnesses:
Mr Les Allamby The Law Centre
The Chairperson (Mr Simpson):
First, I wish to advise members that the consultation on the Department for Work and Pensions’ Welfare Reform Bill Green Paper has finally closed. However, members who attended the Strabane meeting will know that the Department has given us some leeway on the matter, and we hope that it will take on board our comments. Hopefully, we will have that information as soon as possible.
I welcome Les Allamby, who is the director of the Law Centre. I would be grateful if you could give us a brief presentation, and then we will have a question-and-answer session.
Mr Les Allamby (The Law Centre):
I thank the Committee for the opportunity to come here this morning. I will briefly provide some background to the Law Centre’s interest in the matter.
The Law Centre is a voluntary organisation, which, in effect, is a legal resource for the voluntary sector and for advisers who deal with the issues that lawyers in private practice tend not to address. For instance, we consider issues around social security, community care, the non-childcare end of social services, employment, immigration and mental health. We have around 500 members, including local citizens advice bureaux — a provider of independent advice — political parties, constituency associations, trade unions, the Probation Service and social services. We are also involved in the important issue of welfare reform and its impact on people. As well as providing representation and advice on casework, we are involved in policy, training, information and publications work. That is a little bit of the background to our organisation.
I will give members the headlines, and we will also provide the reasons why we urge the Committee to take on board our recommendations. We urge the Committee to recommend that the Department does not adopt the Green Paper. The Department for Social Development (DSD) did not apply the Green Paper that was issued in the summer of 2007, as it did not think that it was appropriate for Northern Ireland.
The 2008 Green Paper builds on the 2007 Green Paper, but it makes sense to adopt what I call “a Northern Ireland approach”, tailored to Northern Irish needs. I will come back to why we think that a different approach is needed here.
Since the Green Paper was issued in July, circumstances have changed dramatically, and there has been a downturn in the economy. For example, the latest unemployment figure for the UK was 1·8 million, which was the largest quarterly rise in the past 17 years. The corresponding figure for Northern Ireland also rose. Those figures are for the period up until August, and we know that the situation will get worse before it gets better. That shoots a hole in the waterline below some of the premises on which the Green Paper is based.
In essence, much of the Green Paper’s content is based on the Government strategy to increase the employment rate for couples, lone parents, people with disabilities and carers. The Government have employment rate targets of 80% for couples and 70% for lone parents. The argument is that child poverty will be more effectively tackled if more people are moved into employment. Although we accept part of that premise, the difficulty is that the Government appear to assume that child poverty will be eradicated if people are moved into work. All the research on the issue shows that parents who move into work increase their children’s chances of moving out of child poverty. However, there are some people who move from out-of-work poverty to in-work poverty, which is a problem that is not recognised in the Green Paper and is one of its flaws.
More importantly, much of the Green Paper’s content is underpinned by what happens in other provision, particularly in childcare. I know that the Committee will be dealing with lone parents in a couple of weeks, but that is significant for the Green Paper. In Britain — and there are considerable changes happening in the other devolved Administrations — there is a childcare strategy and a statutory duty on local authorities to secure sufficient childcare. There is a promise to have wrap-around childcare — childcare that is available in schools from 8.00 am to 6.00 pm — across Britain by 2010. The idea of moving lone parents and others into work is underpinned by the notion that any parent will be able to place his or her child in school from 8.00 am until 6.00 pm, which will leave him or her free to work in nine-to-five employment.
Alongside that key component of the strategy is the idea that there will be carrots as well as sticks. We are positive about some of the carrots, but the sticks are a considerable addition to the sanctions that exist for those who do not engage. I will explain later what that means in practice and outline our concerns.
The Green Paper intends to create those sanctions by making considerable changes to flexible New Deal and moving larger numbers of people off income support — where a claimant does not have to actively seek work — onto jobseeker’s allowance. That builds on what has been done in Britain and Northern Ireland over the past five years. However, that is also a real step change; there are measures for lone parents and about stated ambitions to get carers more actively seeking work. The new employment and support allowance for people with disabilities, which will be introduced later this month, is another example of that. The greater conditionality — although we prefer the term “sanctions” — in the Green Paper means that those who do not actively engage will be sanctioned. There are also some proposals for social engineering, the most obvious of which is the idea that someone with an addiction who does not engage in the compulsory drug-rehabilitation programmes will lose his or her benefits. I will return to our concerns about that.
The idea is that, after two years, people will be required to have found full-time work or be moved into what is called “work-related activity” — euphemistically known as workfare in the United States — which means being moved into compulsory work.
Contribution conditions for certain benefits, particularly the employment and support allowance, will be tightened. That will give disabled people more control over managing their budgets. It is an extension of the direct payments scheme, of which members are probably familiar, which operates in social services, with much greater involvement of the private and voluntary sector in the delivery of those programmes.
Those are the key headlines. In fairness, the Green Paper builds on work that has been done to date, but represents a significant step change. The first reason for that is the idea of getting more people back into work. The Law Centre has no difficulty with that concept. We support the idea of encouraging people, through positive incentives, to go back to work. Our difficulty is the compulsory nature of that.
You need to be aware that something will have to give. The economy is, effectively, worsening and fewer jobs are available, yet the Green Paper says that it will increase the number of people who actively seek and find work. If people do not find work, they will be sanctioned. Those two issues are not compatible. The proposals for lone parents are likely to result in another 8,000 lone parents being expected to actively seek and find work, without commensurate childcare arrangements.
There are almost 50,000 carers, not all of whom are on income support. If larger numbers of them are encouraged to be more actively engaged in work — which is a longer-term ambition — in a more compulsory way, many people will enter the labour market at a time when jobs are not available for them. With the best will in the world, people who genuinely wish to work will find it difficult to do so.
The Chairperson:
I must cut across you. Although you acknowledge in your briefing paper that the Green Paper represents parity with GB, you say that it should be administered differently in Northern Ireland. Can you explain why that should be done differently and how you propose that that will keep in line with parity?
Mr Allamby:
As I said at the outset, the 2007 Green Paper was not adopted here. Therefore, some proposals will be difficult to move away from if contribution conditions are tightened to benefits in Britain under parity arrangements. In view of some of the IT issues that occur, which members will be familiar with and about which they will have been prayed in aid by the Department — on a regular basis, I suspect — it will be difficult to move away from that.
As regards how programmes are administered on who should actively seek work and on what should be done in those circumstances, there is scope for that to be done differently in Northern Ireland. In Northern Ireland, we could, therefore, decide to either extend that to lone parents, for example, to a much lesser extent than in Britain, or that the sanctions approach will be different. One obvious reason to do so is that if wraparound childcare is not provided by 2010 — which, everyone admits, it will not — how on earth can lone parents be expected to find the sort of work that requires them to have their children looked after in childcare?
We can do things differently. We can see how it works in Britain. We are strongly in favour of the idea of a lead Department for childcare. We recognise that, at present, childcare provision is, frankly, pass the parcel: no Department wants it because, effectively, resources are needed to take on that role. From where will those resources come? If you want to go down that road, childcare issues must be tackled. At present, they are not being addressed. Therefore, that approach does not fit.
I do not consider that to be a departure from core parity principles. We are dealing with the matter differently. The Department for Employment and Learning and DSD already administer those programmes. Therefore, two Departments already do that here. Only one Department — the Department for Work and Pensions — and Jobcentre Plus do it in Britain. Matters are already treated differently here in a whole variety of ways. Therefore, that concept is not new.
I hope that I have answered your question.
The Chairperson:
That is OK. I am sure that we will return to the issue at some stage.
Mr Allamby:
Essentially, we welcome the idea of positive incentives and encouragement. Lone parents, carers and people with disabilities who want to get back into the labour market should be encouraged to do so. However, it should happen on a voluntary basis rather than on a compulsory one, using a one-size-fits-all homogeneous approach, which assumes that everyone is in similar circumstances.
People’s disabilities range from mental-health problems to physical problems, and some disabilities are more serious than others. A one-size-fits-all approach simply cannot be adopted. However, that is what the Green Paper suggests.
The Green Paper will not work in its current form, but the Pathways to Work pilot has shown that intensive work with claimants can improve their chances of getting back to work. In fact, between 4% and 8% of claimants who were on the pilot programme went back to work. However, thus far, the Pathways to Work programme has only worked for recently unemployed people and for those who are almost camera-ready for the labour market. The programme has worked for people who are relatively easy to work with.
The Green Paper envisages working with people who need more intensive support, such as people who have been out of work for many years, and people who have deep-seated mental-health problems. That will mean working in a more intensive way, yet a results-driven process is envisaged in the Green Paper. It effectively says that the voluntary and private sectors in Britain should deliver the service. However, on the basis of initial contracting, the private sector is more likely to be involved than the voluntary sector.
There will be tension, because, on the one hand, a results-driven process is envisaged, but, on the other hand, the Green Paper envisages targeting the people who are the most difficult to deal with, and that does not fit very well with a results-driven approach.
The other backdrop to the issue is the fact that there will be fewer civil servants in the Department at a time when the work is becoming more intense, with staff dealing with people who have been unemployed for long periods. Once again, there is no fit there between reducing staff numbers and their workload becoming more intense.
The Green Paper is incredibly vague about identifying the budgets over which people with disabilities will have more control, and about how that will work in practice. We have some experience of how not to do things in Northern Ireland. For example, the direct payments scheme allowed people to buy their own care, but it was announced 12 months prior to its introduction. No resources were invested in it, and there was no support infrastructure. It was simply landed on social services, and they were unhappy with the way in which it was dealt. There was no enthusiasm for it, and, therefore, very few people took up the idea of managing their own budget.
In principle, the idea of people managing their own budget is good, provided that they are given a genuine choice in the matter. People who are comfortable with the idea can manage their own budget, but those who are uncomfortable with it should not, in any way, be pushed down that road. However, going down that road means that people will become employers, and a support infrastructure is necessary to make that happen.
We have a small independent learning centre, which does a very good job, but there are ramifications of paying for someone to provide your care as opposed to the social services. There is a lot of detail to be considered; for example, if someone goes off sick, the situation must be managed. Again, planning and thought must be given to how the situation might be managed.
The idea of people with drug addictions facing a loss in benefit if they do not get treatment is wrong in principle. However, some members may beg to differ on that point. I understand that, but the problem with the Green Paper is that so much of it is not evidence-based, and it simply does not work.
I will quote from piece of research examining that issue, which is called ‘The use of legal coercion in the treatment of substance abusers: an overview and critical analysis of 30 years of research’. Its conclusion was:
“Regrettably, three decades of research into the effectiveness of compulsory treatment have yielded a mixed, inconsistent and inconclusive pattern of results, calling into question the evidence-based claims made by numerous researchers that compulsory treatment is effective in the rehabilitation of substance users.”
Compare the idea of taking away people’s benefits in that manner with what I might call social engineering; that is, imposing sanctions if people do not engage in compulsory treatment. For example, if it is found that smokers cost more to the National Health Service and smokers are told that if they do not go into a compulsory programme to stop them smoking their taxes will be increased, people would immediately say that that is madness. However, we seem to find it appropriate to do that to benefit claimants. The Law Centre’s view is that that form of social engineering does not work and is wrong in principle. The taxation system is not manipulated to force people into certain behaviour; we do not believe that the benefit system should be manipulated either.
Instead of doing that, we believe that an approach that is tailored to suit Northern Ireland can be taken. The opportunity exists to build on some of the work that has been done to encourage people back to work, such as work-focused interviews. That can be done on a voluntary basis. The childcare side of the equation must be dealt with at the same time. We do not agree that it is right to take a sanctions-based approach. Lone parents should not be told that they are going to face a sanction if they do not do certain things.
I will give an example in relation to the lone parent provision. If a lone parent has a child with a disability and is getting disability living allowance — that is, the lower level of care — they are going to move into the new regime in Britain. There are many children who must have injections during the day. If one of their parents decides that they do not want to rely on a childminder to administer that injection while they are at work, is it reasonable to tell that person that they face a sanction for deciding not to work? That type of situation is being created by the expansion of sanctions.
We do not believe that the sanctions-based approach works. The evidence of the success of sanctions is very mixed. Many people only realise that they have been sanctioned after it has happened. Our benefit system is so complex that often people do not understand that; for example, people only realise the ramification of their failure to attend a particular interview after the event. Some quite useful ideas can be taken from the Green Paper, but they should be adapted to suit a Northern Ireland-focused approach. That is our proposal and we urge the Committee to consider recommending that.
Mr Brady:
I thank you for your presentation and I commend the Law Centre for the work that it has done over many years; I have benefited greatly from its advice and support. The proposed changes to the legislation that are outlined in the Green Paper seem to target vulnerable people. For example, I understand that 43% of the people who are claiming incapacity here have mental-health problems.
There are also issues in relation to lone parents, and you raised the issue of childcare. Five years ago, I was involved in welfare rights and we did a survey of childcare provision in the constituency that I now represent. We found that, in relation to the number of registered childminders that were available, the level of childcare provision in that area was one of the worst in western Europe. The fact that the working tax credit has become a shambles does not seem to have been factored in. A parent can only benefit from the childcare element of that if their child is being looked after by a registered childminder; however, if there are only five registered childminders in the Newry area, for example, that immediately creates problems.
You also raised the point, which has been raised before in Committee, that a major change is being made to the welfare system yet, last year, we were told by the Minister that the Social Security Agency could lose between 40% and 60% of its staff. Who will administer those changes, given that the agency may lose some of its most experienced staff?
The other point on the changes here, as opposed to Britain, is the fact that we cannot change the legislation, but we can impose changes on its administration. The Committee has put that argument forward, particularly in relation to disability living allowance. That is an important point that can be applied to a lot of parity legislation.
Not only has the Law Centre requested changes to the Green Paper, but the Social Security Advisory Committee is unhappy. There is a consensus between the people who know most about the benefits sector and the people who claim benefit in that they say that changes must be made, as opposed to the welfare reform being imposed by Government. That is an important issue, which the Committee must address.
Mr Allamby:
You mentioned people with mental-health problems. The Green Paper is strong on saying that people with mental-health problems must be treated with great sensitivity and with great care. It acknowledges that people with mental-health problems who are unemployed have specific needs. There is enormous overlap between people who suffer from drug addiction and mental health. With a strange juxtaposition, it is not acknowledged that drug addiction has a mental-health component for many people. One the one hand is the idea that people must be treated sensitively, yet other proposals simply do not make sense when that overlap is considered.
The legislation can be administered differently. For example, it could be decided that it will only apply to lone parents when their youngest child reaches 12 years of age. The Green Paper will consult on whether to encourage people to actively seek work when the child is five years old, but it does not say that the idea of doing that when the child is 12, 10 or seven should be tested. If would be perfectly acceptable if we decided to administer the legislation differently here to have an impact. The administration of the legislation provides for considerable flexibility if we decide that the Green Paper is not the right road for Northern Ireland.
The Chairperson:
You are not advocating the breaking of parity, but the legislation could be delivered differently through the administration side.
Mr Allamby:
Yes, I am not suggesting that different levels of benefit be paid from Britain. If the contribution conditions were changed for certain benefits, there would be real problems. That would be a retrograde step. Much of what is contained in the Green Paper is not at that level; it is at the level of considering how existing schemes are administered and expanded and how that is done. We do not have flexible New Deal here, but we have something that is broadly equivalent. There are already many examples if how things are being done differently.
Mr Brady:
When the all-work test was introduced, the Government said that they were going to get 70% of people off incapacity benefit. Sanctions simply do not work, and issues around that have not been addressed over the years.
Carers who are in receipt of carer’s allowance are credited with a contribution. If carers are moved into work, and they then earn above the lower earnings limit, they would be contributing. Therefore, the Government will save on their contributions. If one were being cynical, one would say that the most vulnerable people are being targeted. As you have accepted, sanctions do not work, they have not worked, and they probably will never work. That message does not seem to have got through.
Mr Allamby:
The one other point that I would make about sanctions is that a lot of the Green Paper is not evidence-based. The evidence for sanctions is mixed, and the Department in Britain accepts that privately. In a sense, it has prejudged the position by setting up the Gregg Review in order to examine the whole issue of the efficiency and effectiveness of sanctions.
That review has not yet reported, yet they are talking about a considerable extension of sanctions. I have never seen this cart-before-the-horse approach to saying: “This is what we are going to do, and we will now gather some evidence about whether it actually works.” To be quite frank, that is not the normal way to make policy, which is another reason why it would make a great deal of sense for us not to apply some of that until we have seen whether it really does work, and until we see the outcome of the Gregg Review. At that point, we would be in a much better position to make an informed view, whether it is a reformed view that the Law Centre or others like. However, at least it would be an informed view. What we do not have here is an informed view.
The Chairperson:
Do you sit on the Law Centre’s scrutiny committee?
Mr Allamby:
I am the Northern Ireland member on the Social Security Advisory Committee. The committee supports the underlying principle of encouraging people back to work. Its submission made clear that it finds the level of compulsion associated with the Green Paper unsustainable and not evidence-based. The committee has serious concerns about that.
Mr A Maginness:
Your document is a thorough critique of what is proposed in the Green Paper. I agree with many of its detailed criticisms with regard to, for example, drug users and lone parents. At the end of the day, however, we have a problem here. We have an awful lot of people on incapacity benefit in particular. It is a chronic situation, endemic in certain communities, and we must do something about it.
As a general proposition, the Green Paper is based on a buoyant economy in which people can get employment opportunities. Such employment opportunities, particularly here, will be scarce in the immediate future. There must be a financial incentive in order to encourage people off benefit and into work, and there is not sufficient financial incentive in our economy, which is, in many respects, a low-wage economy. I do not know how one can create a situation whereby people can come off benefit and still feel financially secure and better off. That is a fundamental problem and one that is difficult to address.
Mr Allamby:
You are right in what you say. There are ways in which that can be done, and which are not addressed in the Green Paper.
Mr A Maginness:
The situation here is different from Britain, because many areas of Britain have a high-wage economy.
Mr Allamby:
One of the underlying problems, which is not unique to Northern Ireland, is that the way that the social security system treats earnings is problematic for people who are on benefit. Considerable numbers of people want to get off incapacity benefit and, no doubt, will want to get off the employment and support allowance.
The difficulty that we have, and which will be even tougher in tough economic times, is that a lot of people who, depending on their disability, are sometimes capable of working full time some of the time and not working at other times. There are other people who are capable of working small numbers of hours each week, but who are not capable of working full time. The social security system does not fit the needs of people who have disabilities, who can do some work but who are not in the position of someone who can regularly work nine to five every day. In a strong economy, employers would still be interested in people in those circumstances if they had particular skills.
If you are single, you can keep the first £5 of what you earn without it affecting your benefit. If you earn the national minimum wage, once you have worked more than an hour, you start to lose benefit. That is not a great encouragement for you to even try to get work. If you are on incapacity benefit, the rules — which are now more generous than they were — are incredibly labyrinthine: virtually no one understands them, and that puts people off.
People ask whether, if they leave benefit and try work, they be able to go back onto benefit if it does not work out. Due to their fear that they may not be able do so, they do not look for work in the first place. It is a high risk for someone who has had mental-health problems in the past: if he finds a job, he may be unsure as to whether he can keep it.
We need to look much more effectively at work trials and earnings that carry the message, in simple and straightforward ways, that people can try out working. I suspect that that will have more impact in getting people back into work than anything that is in the Green Paper. That is the problem: we are tackling this from the wrong end. You can move people back into work by recognising their limitations in work. Doing that will get much tougher because of the way the economy is going.
The Chairperson:
Is there anything in the Green Paper that you like?
Mr Allamby:
Yes. There are more generous rules that allow people to stay on and study. That seems to make sense. In-work credits are among the measures mentioned in the Green Paper. They are not new; but they are being brought in to encourage people to work. They allow you to keep an additional sum of money, which makes sense.
There are a number of things the Government have done. The problem with the Green Paper is that the Government know that they are in a difficult situation because they are not meeting their child-poverty target. They have alighted on the idea of getting people back into work. They have put a considerable sum of money into tax credits. Putting aside the very substantial administrative problems, tax credits are extremely generous compared to their predecessors.
However, the idea that you can move people into work straightforwardly and kick them if they are down makes no sense. On the child-poverty issue, if you sanction someone who has children, you are not just sanctioning the claimant; you sanction the children and dependants as well. That makes no sense with respect to child-poverty.
The Chairperson:
Thank you very much indeed. We appreciate your contribution and members will discuss how to take it forward.
Mr Brady:
Les said that the review of sanctions is putting the cart before the horse — (Inaudible due to mobile phone interference.) In my experience, sanctions — (Inaudible due to mobile phone interference.)
The main point about the Green Paper is that it is not evidence-based. Another point, something that we have discussed previously, is that there is no break with parity. Any issue that can be dealt with here does not go against the legislation: it deals with it in a more sensitive and humane way.
The Chairperson:
Although the Committee recognises that the parity legislation exists, it should consider how it can be administered differently and to the greater benefit of the people. Is that the consensus?
Ms Lo:
We should try to make the process more compassionate.
The Chairperson:
That is a nice word, Anna. It is not often that one hears the word “compassionate” in Government circles. It is a word that we should underline.
Are members content that the Committee Clerk assesses the general consensus?
The Committee Clerk:
I will need to push that because the consultation period is officially closed.
The Chairperson:
The Department has allowed us some leeway on that.
The Committee Clerk:
If members are content, I will take the comments made today, and the helpful summary that the Chairperson has made, and make the submission directly to the Department for Social Development.
The Chairperson:
Are members content?
Ms Lo:
Mr Allamby made several valid points.
The Chairperson:
We will emphasise the word “compassionate”.