COMMITTEE FOR SOCIAL DEVELOPMENT

OFFICIAL REPORT
(Hansard)

Welfare Reform Bill

11 May 2010

Members present for all or part of the proceedings:

Mr Simon Hamilton (Chairperson)
Ms Carál Ní Chuilín (Deputy Chairperson)
Mr Mickey Brady
Mr Alex Easton
Ms Anna Lo
Mr Fra McCann

Witnesses:

Ms Anne McCleary	)
Mr Colm McLaughlin	)	Department for Social Development
Ms Margaret Sisk	)
Mr Kevin Higgins	)	Advice NI

The Chairperson (Mr Hamilton):

We are joined by officials from the social security policy and legislation division of the Department for Social Development (DSD), who will brief us on the clauses, schedules and delegated powers of the Welfare Reform Bill. I welcome Anne McCleary, director; Margaret Sisk, assistant director; and Colm McLaughlin.

The proceedings are being recorded for Hansard for the benefit of the report and for our scrutiny. Members have a cover note from the Committee Clerk and all the relevant papers. Will you give some brief opening remarks before taking us through the clauses of the Bill?

Ms Anne McCleary (Department for Social Development):

Thank you for giving us the opportunity to go through the Bill with the Committee. It is a complex but important piece of legislation. We will try to keep things as succinct as possible. We will deal with the various clauses and allow members to ask questions. I will deal with the first 14 clauses and Margaret Sisk will deal with the remainder of the Bill. Colm McLaughlin is our resident guru so, if there are any questions on the detail, I may defer to his superior knowledge.

Clause 1 refers to schemes for assisting persons to obtain employment through “work for your benefit” schemes. The clause inserts two new articles into the Jobseekers ( Northern Ireland) Order 1995: article 19A, which refers to schemes for assisting persons to obtain employment through “work for your benefit” schemes, etc; and article 19B.

Article 19A(1) enables the Department for Social Development to make provision in regulations:

“for or in connection with imposing on claimants … a requirement to participate in schemes … designed to assist them to obtain employment.”

In particular, those regulations may impose a requirement on claimants to undertake work or work-related activity as part of a “work for your benefit” scheme. I stress that the intention is to pilot “work for your benefit” schemes in limited geographical areas of Great Britain from 2010 onwards in order to assess their effectiveness. Implementation in Northern Ireland will be subject to the outcome of the evaluation of those pilot schemes in Great Britain and the availability of resources.

Paragraph (1) will provide for regulations to set out the circumstances in which jobseeker’s allowance (JSA) claimants are required to participate in schemes under that article. Paragraph (2) makes it clear that regulations may require claimants:

“to undertake work, or work-related activity, during a prescribed period with a view to improving their chances of obtaining employment.”

Paragraph (3) defines “work-related activity” as:

“activity which makes it more likely that the person will obtain or remain in work or be able to do so.”

Paragraph (4) precludes regulations made under paragraph (1) from applying to JSA claimants who are not required to satisfy the job-seeking conditions. The Department envisages that the precluded groups will include lone parents with younger children who are moved to JSA after the abolition of income support.

Paragraph (5) provides examples of provisions that may be included in regulations made under paragraph (1). Sub-paragraph (5)(d) enables regulations to provide that benefit payments may be withheld or reduced where a claimant fails to comply with the regulations and that person does not show good cause for the failure within the period specified in regulations. Paragraph (6) provides that JSA is not payable for a period specified in regulations where a claimant fails to comply with regulations made under article 19A. That paragraph also provides that the period specified in the regulations in respect of which a JSA is not payable must be at least one week and not more than 26 weeks.

Paragraph (7) provides that the appropriate consequence if a member of a joint-claim couple fails to comply with regulations is that he or she is treated as subject to sanctions for the purpose of article 22A. The period for which the full allowance is not payable must be at least one week and not more than 26 weeks.

Paragraphs (8) and (9) make provision for claimants to receive an income-based JSA, even though provision made by the regulations may prevent it. That is to enable claimants who are subject to a sanction to receive hardship payments. Paragraph (8) does not apply in the case of a joint-claim JSA.

New article 19B is supplemental to article 19A. Its provisions relate to the practical operation of schemes prescribed under article 19A and provide support for any contractual arrangements that the Department for Employment and Learning may make regarding their delivery. Paragraph (1) enables the Department for Employment and Learning to associate itself, financially or otherwise, with any scheme falling within it. Paragraph 3 enables the Department for Employment and Learning, where necessary, to use existing powers in article 4 of the Employment and Training (Amendment) (Northern Ireland) Order 1988 to make an order dealing with the employment status of claimants participating in schemes under article 19A and detailing how any income gained when on a scheme should be treated for the purpose of other legislation. That follows the same approach as the Welfare Reform and Pensions ( Northern Ireland) Order 1999.

Subsections (3) and (5) of clause 1 make amendments which are consequential to the new article 19A. Subsection (3) inserts a new paragraph to make it clear that:

Are we agreeing this without prejudice, then?

Ms Sisk:

Yes. The authority is there to make the regulations, but the Committee will have to see all of these things again. The delegated powers memorandum sets out everything that will require regulations to be made.

I hear what you are saying. At this stage, there are an awful lot of unknowns from our point of view also, because GB has not really started those pilots yet. We do not really have any idea of what exactly GB will do or how things will work. Some of the things that GB wants to test are some of the things that you are concerned about, such as the exploitation factor or the idea that other people who are in employment may be displaced.

Ms Ní Chuilín:

Absolutely.

Ms Sisk:

As regards the pilots, the proof of the pudding is in the eating. When we come back to the Committee, we should have a lot more information, as will DEL.

Ms McCleary:

That will have to go through you.

Mr Brady:

The point is that, although the Department may say that the measure is not meant to exploit people, it gives others the opportunity to do exactly that. You mentioned power, and that is what it is all about.

This is parity legislation. If different groups on JSA are targeted and, as the Minister has said, sanctions are not be imposed on those who cannot participate due to a lack of childcare, particularly lone parents, does that constitute a breach of parity? Parity is supposed to mean comparing like with like. That is where the whole thing becomes ridiculous, because we do not have that in a lot of the legislation.

Ms McCleary:

The lone parent example is a good one, because it is a situation where we are doing something different because the situation on the ground is already different, which means that we cannot simply apply the same criteria as in GB.

Mr Brady:

Do you have any idea of where in Britain the pilot schemes are operating?

Ms McCleary:

I am not even sure that the Department for Work and Pensions (DWP) has decided.

Ms Sisk:

We can probably check that out for you.

Mr Colm McLaughlin (Department for Social Development):

I think that there are four areas. We will check that out.

Mr Brady:

If you are going to compare areas here which have historically had high unemployment and continue to have low-wage regimes, it seems that areas in England with equivalent or similar problems might provide a better picture and help us in coming to a decision.

Ms Sisk:

Mr Brady:

Therein lies the difficulty.

Ms Lo:

Mr F McCann:

Research that we got on similar schemes in Nova Scotia, the USA, the Netherlands and Denmark seems to suggest that, by and large, such schemes were failures. I take it that, when they were looking at the “work for your benefit” schemes, they tried to draw on the experience of those countries, which seems to be a poor reflection on the Bill.

One of the Committee’s concerns — and Alex was one of the people who asked the question — is the worth of the employment in the schemes that people will be asked to go into. On the record of the past, whether it is to do with New Deal or whatever, that call is 100% right. Young people were heavily exploited by employers, and even at the end of the schemes they left with little or no training.

You also spoke about people doing the round of schemes. If the pilots are seen as having been a success in different parts of England but do not match the employment situation here, are you saying that they will not be implemented here?

Ms Sisk:

I am saying that the model of scheme that is introduced in GB does not necessarily have to be the same as the one that is introduced in Northern Ireland. All that we are saying in the legislation is that, where an individual is required to go on a scheme, going on that scheme will be a condition of his or her continued receipt of benefit.

They will certainly not be sanctioned. It will not be their fault that there is no employment at the end of the scheme. The idea of the scheme is to make people more work-ready. If there are no jobs out there, it is clearly not a person’s fault that he or she cannot find a job at the end of the scheme. The purpose of the scheme is to help people who have been long-term unemployed to get back into the way of working. The longer that one is out of work, the more difficult that it is to find employment.

As I said, the point of the scheme is to try to help people who are long-term unemployed to be more work-ready, to improve their skills, and to get used to getting up in the morning and going out to work. People who have been out of work for a long time can get out of that habit. The scheme is not about forcing people into employment. It is not employment; it is a work-preparation scheme.

Mr F McCann:

But preparing them for what?

Ms Sisk:

That will depend. DEL will have to assess what is the best type of scheme for people to go on, what they are already skilled to do and what the gaps are in their competencies. Much of this will be down to what type of schemes the Department for Employment and Learning draws up. We have to wait for the pilots to be run in GB in order to see what type of scheme DEL will run.

I accept that it is difficult at this stage for you to envisage what is planned. This is very much a framework, and we are waiting to put flesh on the bones. We will have to come back to the Committee to flesh out the legislation, and you will get a much clearer picture of the plans then. At that stage, if you do not like it, you can say no to it.

Mr F McCann:

What you are asking us to do at present is to support apparatus that will allow you to deal with people somewhere down the line.

Ms Sisk:

We are asking you to agree the framework, because, without it, we will not be able to do this. Even if the scheme is beneficial in GB, and even if it looks as though it is working, we will not be able to do this if you do not allow us to put the framework in place now. That is what we are asking for.

Mr Brady:

I take your point that DEL will implement the scheme. However, the buck stops with the Social Security Agency (SSA), because it controls the benefit money and imposes the sanctions.

Ms Sisk:

Yes.

Mr Brady:

There would have to be very close networking between DEL and the SSA, and that really is not happening at the moment. Although they are now back in the same office, you may find that the right hand does not know what the left hand is doing most of the time. If DEL is to introduce schemes, however wonderful —

Ms Sisk:

Hopefully.

Mr Brady:

It is accepted that a lone parent will not be required to work during the summer. If that person had been on a scheme to prepare them for work before the summer, would they have to return to the scheme because they were in the same situation that they were in before the summer holidays?

Ms McCleary:

Schemes will have to take such situations into account, because, fairly obviously, a significant number of people will be in that position.

Mr Brady:

That will make the situation more complex than it is already.

Ms Sisk:

Those people are in what are called progression to work groups. The groups are made up of parents of children ranging from three to six years old. Much of this will come out in the wash in the pilots that are being run in GB. Again, we will have to come back to the Committee to put flesh on the bones of some of the issues, such as what sort of things people who are in a progression to work group will be doing. It might not necessarily be work-related activity; it might just be arranging a CV or doing some form of training course, which often do not run over the summer holidays. People in the progression to work groups will not be required to go to work. That is not a requirement. Parents of children who are seven years old and above will be required to seek employment.

Mr Brady:

Moving lone parents to job seeker’s allowance from income support is surely working towards —

Ms Sisk:

The lone parents will be on a modified form of job seeker’s allowance. They will not be required to seek work. The Bill modifies job seeker’s allowance to make it suitable for people who are in a progression to work group. They will not be required to satisfy the condition that they must be actively seeking work. It is a preparation.

At present, those people will not have to do anything until the child reaches seven years of age. Then, all of a sudden, when the child becomes seven, the parent will be required to seek work. The idea behind that is to prepare people for work so that there is no sudden step. As it is, one minute, they are not required to do anything, and the next, they are required to go out and look for work. To a certain extent, the situation is similar to that of the long-term unemployed. If a lone parent has been at home with children for seven years, he or she may not be ready to go out to work. Many women find that they have lost their confidence. They do not feel that they are able to go out into the workplace; they feel that they cannot compete with people who have been in work throughout their lives. The idea is to get those women ready so that, when their child reaches seven, they are in a position to seek work. The intention is that work will help those families to get themselves above the poverty line. While people remain on benefit, they will never be on anything other than the rock-bottom minimum.

Ms Sisk:

They will not be expected to do that. If someone will be financially worse off, that is good cause for not taking up employment. No lone parents will be required to take up a job if they will be worse off in work than they would be on benefits.

They must be at least as well off, and they certainly cannot be worse off.

They will still get that, because they will be on the income-related element of ESA. They will still be passported.

Mr Brady:

The Chairperson:

So there is no rigid date or flexibility?

Ms Sisk:

Clause 15 amends the Social Security Contributions and Benefits (Northern Ireland) Act 1992 to enable the Department to require that where the goods or services are covered by arrangements that the Department has made with the supplier, the award made must relate to specified goods or services and the payment will be made to the supplier. It is expected that those arrangements will involve the supply of white goods and furniture at a discounted rate. Basically, what it is saying is that instead of people who apply for community care grants getting money, they will have white goods or furniture provided by arrangements between the Department and the contractor.

Clause 16 precludes reviews of such arrangements. At the minute, reviews tend to be applied for by people who have asked for £200 for a fridge or a bed and only got £100. In future, they will be provided with the item, so there should not be the same requirement for a review. Clause 17 is about the Assembly’s control over regulations around the disclosure of information. It provides for penalties for the disclosure of information.

To a certain extent, clause 18 is also about the social fund. At the minute, where there is a delay in paying benefit — when the claim cannot be paid immediately or an award has been made but cannot be paid immediately — a claimant can get a payment from the social fund to tide them over. Under the new arrangements, they will actually get a payment of the benefit that they are entitled to, and that will be recouped once they get their full benefit payment.

Mr Brady:

That method of providing goods was tried in the old single payments system, which led to two things happening. It created almost a monopoly in which certain dealers made a living out of providing those goods, particularly via local offices in which they had contacts. It also stigmatised social security claimants. There is no doubt about that, because there were shops with notices up saying that social security claimants were welcome. When they provided the same service to other people, they did not put a sign up in the window. That needs to be addressed. The other thing is that it can also lead to suppliers raising prices or distributing goods that are not quite up to standard. There needs to be some sort of a check. This type of scheme has been tried before, and I do not see the point of reintroducing it.

Ms Sisk:

As you said, Mr Brady, much of it will depend on how well the contract negotiators conduct the negotiations and impose the conditions based of the contracts. However, the SSA is much better at contract negotiations now than it was in the past, as many contracts are being —

Mr Brady:

I am thinking about their white-goods skills and what training they will have had.

Ms McCleary:

It may not be people in the agency who conduct those negotiations.

Mr Brady:

More privatisation?

Ms McCleary:

No. Central Procurement Directorate (CPD) now carries out all contract negotiations for the Civil Service. It is expert in that field and could undertake the negotiations for the scheme.

The Chairperson:

I do not disagree with the principle behind this, and if the Department is trying to drive efficiencies and save money, that is fine. However, although bureaucracy could be reduced, a new layer could also be created in the process, because, as Committee members have outlined, someone will have to check that the new system is operating correctly and that there are no cowboy operations. Furthermore, if the Department is to be successful in achieving maximum efficiencies, it may be better to have one contract for the whole of Northern Ireland. However, that also has its own potential problems, with the successful supplier perhaps not having a branch on an individual’s high street.

Ms Sisk:

The Chairperson:

Clause 18 deals with payments on accounts and has already been covered. There is nothing too controversial in that clause.

Clauses 19, 20 and 27 are all similar and deal with sanctions. Can we take those clauses together?

Ms Sisk:

Yes. Clause 19 deals with fraud sanctions. Currently, when someone is convicted of benefit fraud on two occasions, and the second offence is committed within five years of the date of conviction for the first, there is a loss of benefit provision, commonly referred to as the two-strike rule.

Clause 19 introduces a new benefit sanction to apply after the first conviction, or after an administrative penalty or caution, which will be known as the one-strike rule. The combined effect will be for the benefit to be reduced, or withdrawn for a disqualifying period when a person convicted of one or more benefit offences accepts an administrative penalty as an alternative to prosecution or agrees to be given a caution. The disqualifying period will be four weeks, beginning at a prescribed time after conviction, or on the agreement of an administrative penalty or caution.

Clause 20 deals with the sanction for violent conduct. Where someone has been found guilty of violent conduct towards staff in a social security office, staff in a jobs and benefits office or the staff of a contractor, a sanction of one week will be applied to a jobseeker’s allowance claimant who has been successfully convicted or cautioned for violent or threatening behaviour.

That was a bit of a marathon session in the end, and I thank you for your time and patience.

Ms Sisk:

Do you want us to stay and deal with any issues that may arise from the evidence session with Gingerbread NI?

The Chairperson:

That would be great. We will take a short break now.

Kevin Higgins, the head of policy and research at Advice NI, joins us. Members have a copy of Advice NI’s submission and all other relevant papers. The session is being recorded by Hansard, and I remind you all to switch off mobile phones.

I invite you to make your presentation. Given the commonality of responses to the Bill, the Clerk suggested that Kevin and Advice NI focus their oral evidence on “work for your benefit” schemes, community care grants and contracting-out issues.

Mr Kevin Higgins (Advice NI):

Thank you for inviting me to make a presentation. I will begin with some introductory points and then move on to the three areas of focus. First, in terms of parity with GB, Advice NI has noted that the necessary welfare reform legislation is out of step with that in GB, although possibly temporarily. However, we note that the social security system has not completely broken down and is still functioning normally. Therefore, in respect of timing, if not in respect of substance, events have shown that parity can be broken and that we can do things differently. In that context, Advice NI suggests that this piece of legislation be examined and amended to cater for circumstances that are unique to Northern Ireland, and the opportunity should be taken to adapt how things are done, rather than seek to break parity in respect of benefit types, benefit levels and the conditions attached to benefits.

Secondly, we believe that the primary purpose behind the Bill is to assist people on the journey from benefits to work. Many benefit recipients who will be affected by the proposals contained in the Bill can be categorised as those who are the hardest to help. They often represent the most vulnerable in society in terms of physical or mental ill health, education status, employment readiness, language barriers, and so on. As long as the reform agenda is interested only in removing people as a benefit statistic, applying benefit sanctions and being punitive, and so on, and not meaningfully trying to help people make a transition into employment, the hardest to help, who will be impacted by the proposals, will see themselves as being subjected to the proposals, rather than being eager participants.

In previous welfare reform consultations, Advice NI has argued that forced integration into the labour market will not work without associated significant increases in areas such as childcare. I know that that has been explored in detail already today by the Committee, but we believe that sufficient resources will have to be made available if welfare reform is to have any meaningful impact here.

There should be a firm focus on helping those who move from welfare to work to get and retain jobs over the longer term, so that there is not simply a revolving door in and out of schemes and back and forth onto benefits. There should also be a firm focus on supporting the hardest-to-help benefit recipients, who could well be left behind by welfare reform in a possible haste to meet targets as the labour market is swelled by new people, such as school leavers, university leavers and those who have recently been made redundant, who may well be seen to be more job ready. I will say more about the target regime in a minute. The people who need and could use the most support could well be left behind, although those are the people whom we should be focusing on.

With regard to targets, Advice NI is involved in systems thinking, which is an approach that fundamentally challenges the traditional view of the world in terms of top-down command-and-control management, measures related to budgets, productivity of staff and all of that traditional management routine. Systems thinking is about requiring senior managers to be willing to contemplate the possibility of changing the way that they think about management and about designing services that are specifically around the needs of the service user, rather than some top-down model of what they think should be the case. The systems thinking approach has been shown to result in improved customer service, because it is focused on the needs of the customer or the client. It leads to lower costs in administration and efficiency, and it has improved staff morale, because staff are able to deliver and do more meaningful work for the clients who are coming through the door. Advice NI believes that there is merit in rolling out that type of approach in the delivery mechanisms of welfare reform, as it will guarantee that service users will be at the heart of what is being done.

We agree with the Committee Clerk’s help and guidance; we should focus on certain areas. I will move to the “work for your benefit” aspect of the Bill. Our concerns can be categorised under potential economic impact, and we explored that earlier today. There is also a concern around timing, and there is a potential for it to be a bureaucratic nightmare to administer. It has the potential to be counterproductive and may not help people become any more job-ready.

There is a sense that claimants on these schemes might provide services on the cheap. For example, employers and service providers may source labour under a scheme with a view to exploiting the opportunity to reduce their overheads and staff costs and, importantly, boosting their profit margins.

Advice NI notes from the Programme for Government that growing the economy is the top priority. We, therefore, argue that there needs to be a careful analysis of the possible negative and detrimental impact of “work for your benefit” schemes on economic growth in Northern Ireland, particularly at this stage.

That leads me on to the issue of timing. A number of members today have said that there are few, if any, job placement opportunities in the current economic climate. The claimant count now stands at 55,900; I think that it increased by 300 over the past month. The expectation seems to be that growth will be static, and some commentators have said that we could fall back into recession. In a climate where employers are facing complete shutdown, it is difficult to see where opportunities for placements will arise. Perhaps I should have said “meaningful placements”, because it is important to make that distinction. We want something that is credible and meaningful for the participants in these schemes.

Advice NI is worried that participants will simply be channelled through a revolving door. We are concerned that claimants will, effectively, not be able to look for work while on these schemes, thereby making the schemes counterproductive because they deflect claimants from job-seeking and job-related activity. That is an area that should be addressed.

An industry could potentially develop around the administration of “work for your benefit” schemes. Advice NI notes the impact of “work for your benefit” schemes in the US, where it has been a real challenge to achieve high rates of participation in those programmes among claimants, because a significant percentage of welfare recipients are unable to participate at any given time. We are concerned that an industry may develop around the administration of such schemes, with the focus being shifted from where it should be, namely helping the people who should be helped.

We see in paragraphs (5), (6) and (7) of proposed new article 19A, and article 19B, the potential around sanctions and good cause and the need for people who are responsible for making decisions, people who manage those who are making the decisions and people who quality check that work. Very shortly, an industry will develop around that.

We believe that legislative provision is clearly being made in that part of the Bill in terms of a lack of claimant participation. We wish to see similar legislative provision focusing on the schemes themselves, ensuring that they deliver for participants by helping them on that journey from benefits to work. There is a very obvious gap in the Bill. The focus is on enforcing punitive sanctions if people do not engage. However, the question is what people are being asked to engage in and whether those schemes are the most effective way of helping and supporting people to move from benefits to work. We are mainly concerned that those people will not become more work-ready unless the schemes provide an element of real, effective training and support, particularly in addressing barriers such as mental health, physical health, literacy and numeracy, and help them on that journey. Again, there is scope to tighten that up.

We suggest additional wording that aims to create a greater balance and actually refocuses attention on the participants and the schemes. We want those schemes to be as effective as possible, not futile paper-pushing bureaucratic exercises that do little good for the participants’ morale or that of the staff. Of course, resources will be required, and disproportionately more resources will be needed to help those people who face the additional barriers and the longest journey.

We proposed two amendments to clause 1. First:

“Each and every scheme will have a cost-benefit analysis — highlighting administration costs — aimed at ensuring that resources are targeted on individual claimants.”

That is to get a sense of the potential development of resources being deflected from the industry, and what will be of benefit to the person. Also, the schemes should:

“clearly specify the support, training and education opportunities available to help people on the scheme become more job ready”.

That is aimed at tightening up the arrangements, focusing on the schemes and trying to make them as effective as possible.

That is all that I wanted to say about the “work for your benefit” schemes. I could continue, or we could pause there.

The Chairperson:

It may be useful to pause.

Mr Brady:

It appears that neither you nor Advice NI is particularly happy with the Bill. It seems to me that welfare reform should reform a scheme that is not doing what it should be doing. I do not want to put you on the spot, but do you think that there is anything in the Bill that suggests that it is innovative and that it will be beneficial to the clients that it is designed to help? It seems to me that large parts of the Bill are not designed to do so. It seems to be more concerned with saving money and resources than helping the people at the bottom.

You talked about management taking an innovative approach; that is absolutely necessary. The other thing, it seems to me, is that in terms of the outcomes and how they might be managed, there are not ultimately going to be people who will benefit in great numbers, which is what the scheme is presumably designed to do.

There is another, more general point about parity. What you are really saying, and what the Committee has been saying, for instance, about disability living allowance is that although we may not be able to change the regulations, we can ask for the administration to be tailored to suit the needs of people here and not to be comparable to areas of Britain that we are not comparable to. Maybe I do want to put you on the spot.

Mr Higgins:

We want to see a balance between the punitive and the sanctioning in the Bill, and we want to get a sense that there is some real help and support for people. I do not think that we are getting a real sense of that from the Bill. Parts of the Bill — the proposed new articles 19A(5), 19A(6), 19A(7) and so on — go into a bit of detail about how sanctions and good cause will be administered. That is all on the negative side — what if you do not turn up, and all of that. There is no detail on the schemes themselves. What can a participant expect to get out of them?

Advice NI tries to speak up for those who are more vulnerable and do not have a voice. I do not think that the balance is there. In order to get that balance we want a sense right through the implementation of it. Evidence was given earlier that we are passing something through now and we have to wait for more detail on the flesh of it, but I would also like to get a sense of the management ethos. Are we going to do something differently here? We are in a whole new world of efficiencies and so on.

We have a model of the systems thinking approach, which puts the person at the heart. Services must be built around the individual rather than have some top-down, command-and-control model that some consultant thinks is the right way to do it. There is an opportunity for those in the highest positions to step up to the plate here.

You asked about outcomes. It is important for anyone who is going to be channelled into these schemes — how are the outcomes going to be measured so that it can lead to something meaningful?

Mr Brady:

You mentioned lone parents in rural areas particularly. Although childcare provision is a huge issue, a lot of lone parents in rural areas are isolated because of the lack of public transport or of transport in general. That is another issue that has not been addressed in childcare provision. My point is that, even if childcare provision is available, the parent has to balance the cost of that against taking a job that pays minimum wage and how much that is going to cost. Then there is transport — all of hose things have to be factored in. Is that good or just cause for not going in to the scheme?

Mr Higgins:

I got a sense from the discussion earlier that some of these things might be issues for DEL. However, they will ultimately land at the desk of a decision-maker in the Social Security Agency. Therefore, there is a join, so there will be issues around consistency. A personal adviser or someone on the front line in DEL could make one decision and somebody else in Newry could make a different decision, which could feed back to the decision-maker in the Social Security Agency and lead to inconsistencies.

Ms Lo:

I agree with you. A lot of us have concerns about whether this is part of a political agenda with Labour wanting to be seen to be doing something about getting people out of unemployment and into the job market. We may be creating more jobs for civil servants to administer the new system rather than helping those who need help to get jobs.

I agree that we need to be more person-centred and help people in a meaningful way through training, support and mentoring, rather than imposing sanctions and pushing people into jobs that are not meaningful. If they come in and out of whatever the system is without gaining anything, in many ways they are further stigmatised and disheartened rather than helped.

The Chairperson:

Do you want to move on to community care grants?

Mr Higgins:

I will talk about contracting out first if that is OK.

The Chairperson:

That is fine.

Mr Higgins:

It is all interwoven, of course; some of my points about contracting out relate to what we have been talking about.

We can see scope for contracting out third-party provision; it is embedded throughout the legislation, particularly in pages 3, 7, 32 and 33. Advice NI is concerned that, depending on the resource allocations attached to any contract, contractual requirements might incentivise providers to focus on targets, which would be detrimental to the well-being of clients. An immediate implication of that would be that the easiest to help would be the first to be helped, because that would look good on monitoring reports and they would require less support and, by extension, fewer resources.

Traditional contractual arrangements and traditional command-and-control performance measuring could warp and distort activity and direct it away from those who need it most. Again, we advocate the introduction of a systems thinking approach to ensure that procurement and contracts mitigate that risk. For example, Advice NI advocates the involvement of service users and potential service providers at the design and commissioning stages of any contract, as well as at the delivery stage. That inclusive approach should enable a more robust and effective approach, utilising the expertise, skills and experience of all stakeholders. These are issues related to resources and the potential cherry-picking of clients, helping the easiest to help rather than the hardest.

Advice NI is concerned about accountability. Social security benefit claimants are, in the main, used to working with Civil Service staff. Any withdrawal from direct provision, replaced by third-party involvement, might serve to blur and confuse claimants. That could leave claimants susceptible to unethical work practices, as the third-party providers might be more concerned with achieving their targets than providing a high-quality service for claimants. Claimants might feel unable to oppose or complain about any such approach by a third-party provider in case their benefit was jeopardised. We already have a sense that there are quite punitive measures and sanctions and so on, and there is an issue around all of that.

Although services may be contracted out, Departments must retain ultimate responsibility for the overall effectiveness of any service. There should be a strategy for robustly monitoring and evaluating the performance of providers, and that must include effective and independent mechanisms for garnering the views of service users.

Due to the vulnerable nature of the client group, contracts must place heavy reliance on the quality of the service to be provided, as opposed to the price. There must be sufficient resources within contractual arrangements to ensure that work can be carried out not only to a required minimum specification but to the highest standard possible. We believe that vulnerable clients should get no less.

Here we reach an additional part of the contracting debate. If a contract is subject to competitive tendering and the price is a factor in any decision on whether to engage a third-party provider, the price will automatically be driven down. Therefore, reduced resources will be available to the provider to provide the service, and there will be a reduction in the support available. The chance of the service being as effective as it could be is reduced.

I will pause at this stage and pose a question about how a Department can pass information to third-party providers. I speak with some knowledge on this, because Advice NI has been engaged in some Social Security Agency benefit-uptake work. With a view to trying to make that exercise more effective, we recommended that the agency share client details with the advice sector. We could then approach clients in a slightly less officious manner and perhaps increase benefit uptake. However, the agency consistently told us that information cannot be passed to the advice sector because of data protection issues and so on. Therefore, an underlying issue concerns how that problem can be overcome in relation to contracting out in general terms in the Bill and passing information and client details on to third parties. That is worthy of greater exploration.

Moves towards third-party delivery must ensure equality of access, particularly in rural areas. I am reminded of the ongoing exercise on the outsourcing of medical support services. It is important, because client groups may not have the means to travel and compensate for providers’ lack of geographical coverage across any particular geographical area. That is why we suggested the wording that we did in our written response:

“Before any function is ‘contracted out’ there should be an analysis of the resources required to perform that function”.

The intention behind that additional wording is to try to ensure that need does not become the victim of financial expediency, that services are not provided by third parties on the cheap and that they are not forced to provide services on the cheap.

“Contractors must conduct annual satisfaction surveys with a specified number of ‘service recipients’”.

Again, the intention is to ensure that the needs of service users are built into the heart of the process and flow back to the Departments involved.

“The relevant Government Departments must robustly monitor and evaluate the performance of providers, including garnering the views of service users”.

The intention here is to ensure that Departments take ultimate hands-on responsibility and do not wash their hands of the situation. They must not just pass everything across to third-party providers, and there is still a sense of ownership and responsibility there.

We have already heard that there is the potential for a lack of clarity in the minds of claimants because a third-party provider, DEL, the Social Security Agency and the Department are all involved. Somebody needs to grip hold of this and take responsibility.

The Chairperson:

We are under a bit of pressure to retain a quorum. Will you move on to community care grants?

Mr Higgins:

The first point in relation to community care grants is the timing of the Bill. Members will be aware that there is a consultation out at the moment called ‘Social Fund Reform: Debt, Credit and Low-Income Households’. Page 8 of that document consults on:

“contracting with major suppliers to provide a range of goods and services for people to access instead of cash grants.”

At the very least, there is a sense of putting the cart before the horse because we are legislating to do something when, in another document, we are consulting on whether to do it. That is an issue for exploration.

Aside from that, the Government frequently says that financial inclusion is a high priority. Advice NI fails to see how the proposal to award goods and services in kind promotes financial inclusion and helps people to take control of their financial management. Depending on the process, on which there is no detail, this could well further marginalise, exclude and stigmatise claimants.

Restrictions on the resources that are available to third-party providers of goods and services could well drive down the quality of the services and goods that are provided — I am reminded of the Spanish cookers and so on — as providers strive to win a contract to provide those goods and services at the least cost. Procurement exercises drive down costs, but could potentially lead to the provision of poor quality goods and services. Of course, the provision of poor quality goods and services would feed back into the issue of stigma through obtaining the substandard good or service.

Earlier, points were made about how to reduce bureaucracy and so on, but scarce resources could well be deflected towards the development of contracts, how contracts are overseen, and the administration and monitoring of third-party provision. I cannot help thinking that staff will have to be appointed to manage all of that, and that other people will have to manage those people. There could be issues around all of that. We know what the budget for the social fund and community care grants is. We want to keep a very close eye on that to ensure that that budget is maintained at the very least, even if we go through the exercise of procurement for community care grants.

Mr Brady:

The social fund in Newry is administered through Armagh. That raises the whole issue about whether to contract with somebody in Armagh or someone in Newry. There are inherent problems, unless, as was mentioned, there is a Six County-wide contractor.

Mr Higgins:

Clients may not care where it is administered, but they will want it to be very much accessible to them, so that they can get it where and when they need it.

The Chairperson:

There is nothing else at this stage. Thank you very much for your evidence and your time with us today. It is much appreciated. There is quite a lot in your paper in addition to what you have highlighted, so I appreciate that. Those views, and those of other contributors, will be taken into account when we do our clause-by-clause scrutiny and look to propose amendments to the Bill. Thank you very much for your time.

COMMITTEE FOR SOCIAL DEVELOPMENT

OFFICIAL REPORT (Hansard)

Welfare Reform Bill

11 May 2010

Members present for all or part of the proceedings:

Witnesses:

The Chairperson (Mr Hamilton):

Ms Anne McCleary (Department for Social Development):

The Chairperson:

Ms McCleary:

The Chairperson:

Ms McCleary:

The Chairperson:

Ms McCleary:

Ms Margaret Sisk (Department for Social Development):

The Chairperson:

Ms McCleary:

Ms Ní Chuilín:

Ms McCleary:

Ms Ní Chuilín:

Ms McCleary:

Ms Ní Chuilín:

Ms McCleary:

Ms Ní Chuilín:

Ms McCleary:

Ms Sisk:

Ms Ní Chuilín:

Ms McCleary:

Ms Ní Chuilín:

Ms McCleary:

Ms Sisk:

Ms Ní Chuilín:

Ms McCleary:

Ms Sisk:

Ms Ní Chuilín:

Ms McCleary:

Ms Ní Chuilín:

Ms Sisk:

Ms Ní Chuilín:

Ms Sisk:

Ms McCleary:

Mr Brady:

Ms McCleary:

Mr Brady:

Ms McCleary:

Ms Sisk:

Mr Colm McLaughlin (Department for Social Development):

Mr Brady:

Ms Sisk:

Mr Brady:

Ms Sisk:

Mr Brady:

Ms McCleary:

Mr Brady:

Ms Sisk:

Ms Ní Chuilín:

Ms Sisk:

Mr Brady:

Ms Sisk:

Mr Brady:

Ms Sisk:

Mr Brady:

Ms Sisk:

Mr Brady:

Ms Lo:

Ms Sisk:

Ms Lo:

Ms Sisk:

Mr Easton:

Ms McCleary:

Mr Easton:

Ms Sisk:

Mr Easton:

Mr Brady:

Ms Ní Chuilín:

Ms McCleary:

Mr Easton:

Ms Sisk:

The Chairperson:

Mr F McCann:

OFFICIAL REPORT
(Hansard)