Welfare Reform and Work Bill (Second sitting)

Helen Whately Excerpts

Thursday 10th September 2015 Public Bill Committees

[Emily Thornberry]

Q 45 The question I wanted to ask was about the benefit cap. Quite a lot has been said about it, but I would like comments from anybody on the panel on this. If we were to take out of any benefit cap housing costs that are not under the control of people who live in London—people who do not own houses and are in the private rented sector because there is not enough council housing for them to live in—and instead assess people on the basis of need, given the size of their family, would that result in a fairer outcome? Would it have any adverse impact on their willingness to work?

Tony Wilson: To be honest, that sounds a bit like the old housing benefit system before LHAs were introduced in the mid-2000s. The assumption when the local housing allowance was introduced was that it would enable tenants to shop around and that it might bring down prices and help make the housing market work better, and it has not done any of those things. We really should look again at that.

[Helen Whately (Faversham and Mid Kent) (Con)]

Q 46 We know that many people in the work-related activity group desperately want to work. Kirsty and Tony, you have both talked about the help for that group and people who are further from work—things like lower case loads, talking therapies and much more personalised attention. Clearly, all of that costs something.

The savings from aligning ESA with JSA are substantial. I have seen a figure of £640 million. Some of that can be used to fund the additional support, and the Government have made a commitment to fund additional support. Kirsty, you also said that those individuals, once in work, tend to stay in work, which is a very good outcome. I want to test this with the panel: is it not better to be helping that group of people into work, as this Bill is proposing, than to keep them in receipt of slightly higher benefits but not in work?

Kirsty McHugh: I accept what you are saying. I completely understand that, and it is a political decision at the end of the day about where the cut-off points are. The majority of people do want to work, and many can with the right support, but it might take a while to get them there. Early investment in that support is therefore probably going to make more of an impact than varying the benefit level. There was an announcement that there would be some more investment in jobseekers with ESA, which we very much welcome. We are looking forward to seeing more details about that.

Tony Wilson: The Government’s commitments to more investment support for ESA are absolutely welcome. Actually, quite a lot of money is being spent through the Work programme on supporting ESA claimants: probably in the order of £200 million.

Charlotte Pickles: I would like to make a couple of points. First, it is excellent that the Department is piloting support via Jobcentre Plus for ESA claimants in certain areas essentially as soon as they claim, rather than waiting for them to go through the WCA. My understanding is that those ESA claimants who have responded to that support have found it very helpful. So the point about early intervention is essential with this group, and as we all know, the longer someone is on a benefit, the longer they are likely to stay on it. ESA is a relatively new benefit, but we are already seeing people in the WRAG group who have been on it for two or more years at around 65% of those people. So we need to be doing stuff a lot earlier to help them.

I would also add, which I think probably links in with what Kirsty and Tony have said, that with the Work programme we are now in a 100% PBR model, and there were good reasons for that. However, I think there are equally good reasons now to look at whether the ESA cohort should have an attachment fee that would help with that cash flow, which for a lot of providers is proving very difficult. We know that per-head expenditure by provider on ESA claimants is actually lower than on JSA claimants. So there is a cash problem in the system—that is certainly true.

Kirsty McHugh: I do not accept those figures at all. My providers, whether they are subcontractors or prime contractors, are subsidising the ESA heavily from the JSA. That is the way that it was intended to be.

Charlotte Pickles: Anecdotally, if that is true, that is fine. The data that is out says that it is a lower per-head case load. Tony is nodding his head.

Tony Wilson: You are both right.

Charlotte Pickles: Either way, I think what we are saying is there is not enough money in the system as it is currently modelled, and therefore restructuring that payment model may help to tackle that.

[Helen Whately]

Q 47 I have a second question. Earlier on there was some criticism of jobcentres’ support for lone parents and questions about flexibility. One of the things my local jobcentre in Maidstone was doing recently was celebrating a young woman—I think she had five children under seven—who had just got into work. She really wanted work and it worked hard to help her, even during the summer holidays. I wonder whether you recognise that jobcentres are managing to help some single parents—Octavia, you must have quite a lot of experience and feedback from single parents on this. When jobcentres are successfully helping lone parents and you combine that with the plans for 30 hours’ free childcare for three-year-olds, surely things are moving in the right direction for single parents who want to go back to work. I have heard that from my constituents.

Octavia Holland: There are a number of points to raise in relation to that, starting off with the childcare. Of course, the 30 hours of free childcare is welcome by any parent across the country with a three or four-year-old or a younger child. It is a great step in the right direction, but I am sure that a lot of you already know that there will be all sorts of practical problems experienced with that 30 hours of childcare. You will have providers who will say, “You can access your 30 hours only if you pay for a full-time place.” There are examples in London boroughs that I know of where providers say about the current 15 hours, “You can only get it for three-hour slots a day.” When you look at those practical problems—they could be term-time only offers or two-day only offers—it does not really effectively support work always. Although it is a step in the right direction, there is a lot more to be done to really support parents into work.

Another point I would make in relation to childcare is that, through the proposed conditionality to require parents on universal credit of three and four-year-olds to start working, 220,000 carers will be affected. At the moment, the Government have not announced any plans to expand the amount of childcare offered, so the 30 hours is being proposed, which is a subsidy for parents—a really welcome subsidy—but we are not aware of any plans to expand provision. Family and Childcare Trust evidence shows very clearly that there is a real shortage of provision: fewer than 50% of local authorities say that they have got enough childcare in place at the moment and only 70% of primary schools offer before and after-school care. Yes, we are moving in the right direction, but if we are really serious about supporting parents into long-term, sustainable employment, a lot more needs to be done in terms of childcare.

[Helen Whately]

Q 48 The point about the implementation of that 30 hours is important—how it is done.

Octavia Holland: It is. I think a lot of lessons need to be learnt from the 15 hours. There are providers who will say, “Okay, I’ll offer the 30 hours, but I’ll offer only two 30-hour-only places. The rest will be full-time at a much higher rate.” If you are trying to help low-income families, you really need to address those issues.

Charlotte Pickles: Can I answer that? The 30 hours, and the increase from 70% to 85% coverage in UC, is a very positive step forward. However, I agree that, if the 30 hours is a term-time only offer, it is a problem, given that you do not just work in term time.

However, to go back to your point about Jobcentre Plus and the flexibility and freedoms that individual jobcentres have, I would say that more work needs to be done to understand the difference in quality of that provision from jobcentre to jobcentre. Some jobcentres are excellent, provide fantastic support and do everything that they possibly can using their flexibility and discretion to do positive things with all sorts of cohorts. Some jobcentres are doing a lot less. One challenge I encourage the Department to look at is measuring jobcentres based on job outcomes and not off-flow from benefits, because we are holding providers to account in a way that we are not holding jobcentres to account. That is a real problem for understanding the performance of jobcentres.

Octavia Holland: I just wanted to point out that over two thirds of single parents enter the three lowest-paid occupation groups, and that training to upskill adults has been cut by 20% over the last five years. Actually, what needs to be looked at is the quality of jobs that people are moving into, and how that benefits their long-term independence and the support that they can give their families. Talking about work is obviously important—single parents want to work—but if it is a low-skilled job and they will be trapped in a low-income job with no prospects for moving on, the benefits that that will bring their family are not as profound as they could be.

Charlotte Pickles: Can I add briefly to that? It is absolutely true that we need to support people to progress when they are in work, but the evidence clearly shows that a job is better than no job, so I do not think we should be disparaging entrance in to low-skilled jobs, but we should be focusing on helping people progress once they have gone into them.

[Hannah Bardell]

Q 49 Should we not be stipulating that it be decent and fair work, rather than any work? The current statistics are one hour in any work in the week before. Should the legislation not stipulate another term of reference?

Charlotte Pickles: I do not think so. I think you need to focus on getting people into work. As we know, for some people, doing a few hours of work is a very positive thing. Also, the evidence base shows us that a job is better for people’s wellbeing than focusing on trying to get a—[Interruption.]

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[Kate Green]

Q 68 We have slightly lost sight now of the effect that you think cutting £30 a week will have on people’s propensity to go into work and on the disability employment gap.

Sophie Corlett: I can answer some of that. I think there is a complete misunderstanding of what keeps people with mental health problems out of work. It is not that they find it financially beneficial; it is that if they are in the ESA group—the WRAG or the support group—they have been found not fit for work. They are not well enough for work; the money is neither here nor there. Having less money will merely make you more likely to be debt-ridden, and depressed and stressed and unwell.

Elliot Dunster: I have been quite clear from Scope’s perspective that we think it will be a disincentive, for the reasons that I have already explained. Also, building on what Sophie said, we know that disabled people have less financial resilience than non-disabled people; we know, for example, that disabled people have on average over £100,000 less in savings and assets than non-disabled people. So they are less able to cope with big financial shocks and long periods of time out of work. Because of the lower financial resilience of disabled people, a long period of time on a very low income will have a very serious effect, which we are concerned about.

[Helen Whately]

Q 69 Mental health is a particular issue of interest or concern to me. In my constituency, I recently visited the local Mind and I saw really effective delivery of parts of the Work programme by it. I joined in a session and spoke to one client who told me very openly how enormously helpful she found Mind’s support, even though she was clearly some way off being able to get back into work. So, because I think the conversation about the support for people with mental health problems has been relatively negative, I just wondered whether there are any positive experiences you could talk about regarding the support that people are receiving.

Sophie Corlett: There are some very successful mechanisms for supporting people to get back into work. Some of our local Minds are involved in individual placement and support, which is quite different from the Work programme. Individual placement and support works with people on a voluntary basis, so it starts from the point of view that you want to get back into work, which, in fact, is the case. So it works with people; it is not saying, “We’re sanctioning you because we’re assuming you don’t want to get back into work.”

IPS works with the flow of where people are going; it encourages them to aspire to work. So, as Gareth said earlier, it is about helping people to boost their confidence, rather than assuming they do not want to get back into work and actually undermining their confidence. It is working with people, working with their aspirations and helping them unravel the things that are stopping them getting to work, whether that is transport, debt, caring responsibilities or other things going on in their life. It helps them to get those things in order, which might be very difficult if they are not well and cannot really organise those sorts of things.

Then it is working with the employer, which is very important from the point of view of mental health problems, both to unravel the employer’s potentially discriminatory attitudes and to support the employer if the employee is not necessarily going to be working at full throttle initially. So you can say to the employer, “It’s all right. We’ll work with you and we’ll stick with you, so that if things aren’t good initially we will still be there to help you.” So, very importantly with IPS, the support carries on.

Some of our local Mind projects have a 32% rate of getting people back into work, which is phenomenal. I think that 82% or 85% of people are still in work after six months, which is a very good success rate. So there are ways of doing that, but importantly they are individually tailored, they understand mental health, they work with the employer and they work on the positive model, not the negative one.

[Helen Whately]

Q 70 Do you think that it would be possible for those successful models that you are describing—as I said, I saw something that seemed to be succeeding—to be extended?

Sophie Corlett: I absolutely believe it would be possible to extend that model, but it is a very different model because it is not based on sanctions, conditionality and an assumption that you are just on the scam and trying to take the money. It is based on an assumption that you want to get back into work and that there are real barriers to your doing so, and we will help you to overcome them. Fundamentally, that is a different relationship that you have with your adviser.

[Helen Whately]

Q 71 Although that is not what I had seen from—

[The Chair]

Order. Helen, you will get some new answers now, if you will just hold a second.

Matt Oakley: I probably came across a bit too negatively about the Work programme. Just to be clear for the record, the Work programme is better than all the programmes that came before it, in terms of both its performance and value for money. ERSA—Kirsty—was here in the previous session. She will give you examples from each of the main providers—the subcontractors—of the fantastic work that they have done with individual cases, individual people and the distinct programmes that they have for small groups of people, as we have heard here. I would like to see the Work programme be better at scaling that up and turning that 8% into 16%, 24%, 32% or perhaps even 50% of people with a disability or ill health problem getting a job from the Work programme. That is the challenge. We need fundamental reform of how the Work programme is financed, how the money is focused on people with the most distinct needs and how some of the contracting relationships work. Hopefully, in the next round of contracts coming this year, that will happen. It will take quite a bit of work before then to get that right.

Gareth Parry: I think that IPS is a proven model. It is established and it has recognised statistics that show it works. It is relatively expensive, and that is what holds back the scalability of IPS, but it is a fantastic programme. If the Committee or the Department are looking for opportunities to invest some of the money that is being made available in bringing together health and employment agendas, IPS is absolutely the place to start. Investing more money in IPS to see how it could be turned into a scalable model could have significant returns on investment for a significant number of people with mental health issues. We would very much advocate consideration of that.

There are lots of other programmes that are highly successful for people with mental ill health. The Access to Work mental health support programme delivers a 92% success rate of sustaining people in work. That is stopping people falling out of employment and on to benefits in the first place, which is an important part of the agenda. If we are going to halve the employment gap for disabled people, prevention is just as important as cure. You will also see fantastic evidence around the Work Choice programme about how people with mental health conditions are supported. The issue is that these things do not get shouted about enough and there is not enough awareness about them. There are a lot of successful programmes out there.

[Helen Whately]

Q 72 We have been talking about the trade off in that these are successful programmes but they cost money. I am interested in your view. When you have a choice, do you keep paying somebody a slightly higher benefit or use some of that money instead to enable them to get closer to work, which is the situation we have here? Is it not better to support someone with that money, so that they can get into work? That is what most people with mental health problems who I know want. Is that not important?

Sophie Corlett: It is really important that it is both. What we know about mental health problems is that—perhaps obviously—stress and depression are very common, and increasing somebody’s anxiety, particularly around their financial sustainability, is not a great place to start. To go back to the point that I made before, if people are in the WRA group, they have been assigned to a group of those not yet fit to work, so work-related activity is to get them towards work and to support them towards work. However, that is not necessarily going to make them well. There is a health aspect to this, to which a financial incentive or a timetable is not conducive; it will take the time that it will take. Work-related activity might help, but it might be nothing to do with it, and to require people to live on less, because they might get a job at some future point, is inequitable.

[Neil Coyle]

Q 73 My questions follow Helen’s quite neatly and are primarily for Sophie, Gareth and Elliot. The Government have a commendable target to reduce the employment gap for disabled people. There are opportunities in the Work programme, where it is supposed to be changing to focus in on that. Some of that has been touched on. A bit more information and specific recommendations from you on disability employment advisers, apprenticeships and Access to Work would be useful. It should be noted that although Access to Work costs money up front, it saves money in the longer term, not just in reducing benefits, but in income tax and national insurance contributions.

Secondly, Laura, you mentioned the impact of changes on disabled people and how they had not been taken into full consideration previously. Can you say a bit more about what measurements and reporting you would like to see in the Bill, including knock-on costs if the Government are potentially getting things wrong, if you have recommendations now?

Thirdly, a wider question: disabled people are known to have higher costs of living and fewer opportunities and the Government have repeated the statement that disabled people have been protected from previous cuts. Would you like to see an exemption for disabled people from benefit and tax credit freezes in the Bill to ensure that that statement is accurate?