Jobseeker’s Allowance (Mandatory Work Activity Scheme) Regulations 2011

Lord Kirkwood of Kirkhope Excerpts

Tuesday 10th May 2011 Lords Chamber

[Baroness Lister of Burtersett]

My Lords, being new to the House, I am no connoisseur of Merits Committee reports, but on reading its 27th Report over Easter, it struck me as being damning in its conclusion that the lack of information attached to the regulations was unacceptable. The noble Baroness, Lady Thomas of Winchester has confirmed that view.

I am rather more familiar with the reports of the Social Security Advisory Committee, having read many of them over the years. Its report on these regulations, to which the Merits Committee refers, is at the more critical end of the spectrum of SSAC statements. Its key recommendation was that mandatory work activity should not proceed. Nevertheless, it is proceeding on the basis of regulations deemed inadequate by the Merits Committee for their lack of clarity of purpose. As the committee underlines, these are important regulations, the effects of which could have serious implications for the livelihood of thousands of unemployed people. As we have heard, where sanctions are imposed, JSA will be withdrawn for 13 or 26 weeks and, if further primary legislation is passed, we could be talking about loss of benefits for 156 weeks for a third so-called offence from April 2012.

The evidence suggests that it is often the most vulnerable who are subjected to sanctions. Both the Merits Committee and SSAC comment on the ambiguities surrounding the scheme's purpose. The department denies any punitive intent, emphasising how the scheme is supposed to help customers develop behaviours and attitudes required to get and keep work, yet it is adamant that sanctions must be applied to those who do not comply. I do not find the department's response to SSAC’s concerns very convincing. The velvet glove and warm words about support surrounding the iron fist of sanctions look rather threadbare.

I am reinforced in that view by my reading of a recent systematic review of international evidence on the impact of benefit sanctions published by the Joseph Rowntree Foundation. The review questions the efficacy of sanctions in changing claimants’ motivation or attitude towards work. It suggests that although sanctions may have a short-term effect in shortening unemployment spells, the longer-term effects can be counterproductive in jobs and earnings progression. It is worth citing the report's conclusion:

“this report brings into focus the gulf between the rhetoric of welfare reform and the evidence of the effects of sanctions … policy-makers continue to justify the extension of sanctions (and sanction-backed conditionality) on moral philosophy grounds while taking an ambivalent attitude to the evidence … with evidence being marginalised by discussion of principles and what can be expected of claimants in return for benefits”.

I fear that, in a moral crusade against the supposed welfare dependency, Ministers read the evidence through a distorting lens. As the TUC warned in its submission to SSAC, these regulations seem to move employment policy further away from an evidence-based approach. The SSAC report comments:

“The evidence on the efficacy of ‘workfare’ schemes is, at best, mixed”,

as the noble Countess has already pointed out.

Personally, I was unhappy about the previous Government's work-for-your-benefit proposal, but at least, as the Merits Committee notes and my noble friend pointed out, it was to be a pilot scheme with a clear evaluation plan aimed at examining whether mandatory work activity had demonstrable benefits. These regulations introduce mandatory work activity nationwide without any such evidence.

That makes all the more important the monitoring of placements to ensure that, among other things, participants are treated properly and are not used to replace waged workers. I am pleased that the department has accepted SSAC’s recommendation on that point, and I would welcome more information from the Minister about the placement monitoring system. However, as the Child Poverty Action Group points out—I declare an interest as its honorary president— there are no guarantees of minimum standards that can be expected from employers. I regret that the department has rejected SSAC’s recommendation that detailed guidance should be given to employers about placements.

My other main concern, which was also picked up by the Merits Committee and SSAC and was commented on by the noble Countess, is the question of discretion. The Merits Committee questioned how the scheme can be delivered with any degree of consistency given the degree of flexibility and discretion built into it. In its 28th report, drawing attention to oral evidence provided by the Minister for Employment, the committee observed that,

“The targeting of the Mandatory Work Activity Scheme is to be left almost entirely to the discretion of Jobcentre Advisers, and the Minister is sanguine that there will be local variation and a lack of consistency in the way that the Advisers apply their judgment”.

That is just one example of how discretion is being extended in the social security system, and I find it worrying.

Flexibility sounds very positive, but its flip side is a lack of clear rights and the danger of arbitrary and inconsistent decision-making and lack of transparency. Moreover, the JRF review suggests that the administration of sanctions is not rational or equitable and can lead to bias, including racial bias. Important decisions with implications for a claimant's livelihood will be taken on the basis of what SSAC refers to as the

“views and opinions of the personal adviser”—

views and opinions about attitudes and motivations that will require considerable skill to interpret correctly. I would be grateful if the Minister would tell us about the kind of training that advisers will receive to make these decisions, and whether all advisers will have received this training by later this month when the scheme is introduced.

Will the Minister also clarify the department's response to SSAC's recommendation that,

“detailed information is provided to potential participants about the criteria for selection”?

In its response to SSAC’s report, the department says that it accepts the recommendation, but in explaining how it accepts it the department does not state explicitly that potential participants will be told the criteria for selection. I would be grateful if the Minister would confirm whether they will be told.

Another extension of discretion lies in the refusal to prescribe in regulations factors to be taken into account when deciding whether someone has good cause for failing to take part in the scheme when required to do so. This point was made by the noble Baroness, Lady Thomas of Winchester. The department's response to SSAC, namely that doing so risks limiting the circumstances in which good cause could be applied, again is unconvincing. Clear good-cause provisions in the regulations would provide a safeguard for claimants, without necessarily limiting the circumstances to those listed.

In conclusion, the Merits Committee complains about the vague and insubstantial basis on which we are expected to assess whether the regulations will achieve their objective. On the basis of research evidence, I fear that the regulations will do more harm than good. I support my noble friend's prayer that they be annulled, and the Motion of Regret tabled by the noble Countess.

[Lord Kirkwood of Kirkhope]

My Lords, the House owes a debt to the noble Countess, Lady Mar, for raising these regulations this evening. As always, it also owes a debt to the Merits Committee and the Social Security Advisory Committee for their excellent work. The debate highlights very important points, many of which have already been made.

The first thing that I will say relates to the initial observations about procedures made by the noble Lord, Lord Knight. I would support him in pursuing the clarity that we need to enable the House to demonstrate and exhibit displeasure to the department without necessarily seeking to completely torpedo and annul regulations. The Motion in front of us in the name of the noble Countess, Lady Mar, is well judged. It is not always a Minister's fault—indeed, I completely absolve my noble friend from some of the worst excesses of this order. However, we should have the ability to make it clear that if there is insufficient detail, and if we do not feel that it is safe to endorse proposals that are brought to the House by the department via Ministers, we should have a method of expressing that in a grown-up way, and we should be able also to test opinion in the Division Lobbies. I encourage the noble Lord to pursue that line of thought.

Secondly, my noble friend must have bigger fish to fry. I have spies everywhere and they tell me that this is an £8 million scheme. That does not mean that it is not important—there are important principles here—but he has much more important things to worry about, such as universal credit and the work programme, which are both crucial. I also understand that we have managed to get such a keen price out of the contractors that we have been able to double the number of places for the mandatory work activity scheme and are now thinking about 19,000. That raises questions about the quality of the schemes that will be provided. I have a calculator, and I can divide 19,000 into £8 million and see that it works out at something like £430 per four-week placement. These figures need to be confirmed; otherwise, we will all be confused. The point I am making is that, if we have four-week schemes that are costing £430 to provide, one wonders about the disproportionate sanctions referred to by colleagues earlier in this debate of £1,800 or thereabouts, being equivalent to 26 weeks’ benefit at £67.50. There is a disproportionality about some of this, as well as the question of whether the quality can be delivered on a four-week scheme for £430. We need to keep this in context, but there are some really important questions that worry me about these regulations that are creating potential precedents. These deserve attention.

First, if I understand it right, contributory JSA benefit claimants are covered by these regulations. Contributory benefit claimants are different from means-tested JSA benefit claimants. They have been paying national insurance contributions to enable them to be entitled to this benefit, at least in the first year, before they go into the work programme, as I understand this scheme as it is going to be rolled out. They are going to be tapped on the shoulder by some Jobcentre Plus personal adviser and be told that they are going to be subject to the mandatory work activity scheme. People who make contributions through the national insurance system should be in a different place from those on a means-tested JSA regime. I would like the Minister to comment on whether that is correct.

I also worry greatly about the way we are potentially interfering with the well-established legal definition of “actively seeking work”. The way I read this—and again, I would like to be corrected if I am wrong—being able to do just enough to satisfy JSA legal entitlement requirements is not going to be enough anymore under this scheme, because if you are only undertaking activity that is just enough to satisfy your personal adviser, you can still be mandated to be put on this mandatory work activity scheme. So I think we are stretching some of the well-established concepts. What people really clearly understand about “actively seeking work” has been built up over years in case law. We interfere with that at our peril, and I hope the department is thinking carefully about that.

I also concur with the comments made about adviser discretion, which is unappealable, to nominate candidates for this scheme. Obviously, the decision about a sanction is appealable and that is understood, but the noble Baroness, Lady Lister, was right to draw attention to giving discretion to advisers, as other colleagues have done in terms of local flexibility to contractors.

Part 6 of these regulations causes me some concern because I do not know that I have ever seen anything like this, but I may be wrong. Part 6 talks about “contracting out certain functions in relation to the scheme”. If we are starting to contract out certain functions of the scheme—I understand that does not include sanctions—that is new territory as far as I am concerned. We have to be very careful about what Jobcentre Plus staff and personal advisers can do, as well as some of the providers of these schemes.