Welfare Reform and Work Bill (First sitting)

Peter Heaton-Jones Excerpts

Thursday 10th September 2015 Public Bill Committees

[Corri Wilson]

Q 29 To follow on from what Hannah was saying, given that the child poverty targets were unlikely to have been met, would it have been better to delay the targets instead of removing them?

Neera Sharma: Yes, the Government could have taken the opportunity to look at the timing and set interim measures and looked at the direction into the future instead of looking at abolishing them completely.

[Peter Heaton-Jones (North Devon) (Con)]

Q 30 I want to move on to the changes in the Bill on conditionality for universal credit. I will be interested to hear your views on the impact that that will have. In particular, will you address whether you think any negative impacts that those changes might have will be to some extent mitigated by the changes to free childcare, with the Government’s proposal to double childcare to 30 hours a week? Is there a balance between the two?

Neera Sharma: We welcome the doubling of free childcare for families, which will help many parents to enter the labour market and progress with their careers. But we have a number of concerns, and one of those is around timing. The childcare Bill will come into force in September 2016, but the greater conditionality—full conditionality for parents of children aged three and four—starts in April 2016, so there is a six-month gap. In Scotland, the childcare provision will not take place until 2019, so there is a bigger issue for devolved nations.

We are concerned that there are timing issues. We are also concerned that the Government should look at what that 30 hours of childcare translates into: that it is available locally and appropriate, and that it meets the needs of vulnerable families—for example, parents who have got disabled children. Our services are telling us that it is difficult for parents in rural areas, parents who are vulnerable and parents with disabled children to access that childcare at the moment.

During the summer, and more recently, providers have also raised the issue of sufficiency and how they are going to meet the demand. For example, the National Association of Head Teachers conducted a survey over the summer, and two thirds of respondents said that they could not meet the extra demand, that they would have to reduce places by 25% to 50% and that that is going to be quite challenging. We are concerned about those points. There are childcare issues that need to be addressed in terms of timing and capacity on the ground.

Emma Stewart: From our perspective, we are concerned about the kind of jobs that are going to be available for low-income parents. We are also concerned about the kind of support that is going be available to address their specific needs in the labour market. There is conditionality for people who are out of work and there is conditionality for people who are in work, and in-work conditionality is relatively untested. Our anxiety is that it is going to be rolled out incredibly quickly, and DWP trials are not necessarily rolling out to test how it will work in time, with the introduction of universal credit nationally.

In terms of support and jobs, we work with very low-income women across London, and our experience is that the flexibilities that were available under lone parent obligations are being withdrawn. On the ground, the experience in relation to UC is going to be that, if you are in work, to move out of conditionality, effectively, you need to be earning the minimum wage in a full-time job. We know that a significant proportion of lone parents can’t have, choose not to have, and, ideally, do not want a full-time job; they want a job that is flexible to fit around their caring responsibilities. That equates, effectively, to a 22-hour-a-week job at £10 or £12 an hour.

The challenge in the jobs market, as it stands at the moment, is that there are very few quality flexible jobs available for parents to move into, so they are going to face impossible choices. Without some form of front-line support from Jobcentre Plus providers and Work programme providers, they are going to be faced with a very difficult choice: either go and work full time, which, when you consider housing, childcare and the taper rates that are being proposed, will not be considerably better for them, and they will be with their children less; or move into a part-time job, but the issue is that only 6% of vacancies available in the jobs market at the moment that offer a level of quality in terms of living standards have some element of flexibility from day one. So parents are fishing in a tiny pool.

So the issue is around having tailored support and brokerage on behalf of candidates who need flexibility through the mainstream system in relation to employers, as well as a recognition that there are bigger structural issues in the labour market that DWP needs to be talking to BIS about. That is really important.

[Peter Heaton-Jones]

Q 31 Could you also address childcare?

Emma Stewart: Our specialism is less in childcare than in the jobs themselves. From the front line, we know that our clients are not necessarily pursuing childcare, unless they know they can get the right kind of job. It is a slight chicken-and-egg scenario. The best way to incentivise parents is to support and encourage them, and to make available the kind of jobs that mean they can fit work with family life and still be better off.

[The Chair]

Helen?

--- Later in debate ---

[Emily Thornberry]

Q 33 My next question is: if you are an unskilled lone parent with a three-year-old and you are trying to find work, are you likely to be able to get work available during the day, or are you more likely to get the sort of work that might be early morning cleaning, bar work or zero-hours contracts where you are expected to be available? How does that fit in with setting up a new form of childcare?

Emma Stewart: At the moment in London, the majority—over half—of part-time jobs pay below the London living wage. A high proportion of them are precarious employment-related—zero hours or shift patterns. The challenge is multiple. There is sometimes no guarantee of regular work and regular shifts. It is very difficult to organise childcare if you are working in a supermarket and you do 9 am to 12 pm for three days and then 10 am to something else for the other two days. Retail works in such a way that shift patterns are often rotated on a monthly basis, so it is very hard to align childcare with certain sectors. We know that within health and social care, there are significant issues in relation to that type of work.

The conversation about part-time work needs to focus on permanent part-time work. There are huge wins for business to consider, in terms of how it can build efficiencies in the way that jobs are done and redesigned to facilitate better retention rates and better talent attraction rates. Even within lower-paid sectors, we know that social care is facing a huge nightmare with retention issues at the moment because women are not able to sustain the kinds of shift pattern that they are having to work and it is very, very difficult to find childcare arrangements. We also know that women in retail often share childcare with their partners and families, because it is just not possible to find the right kind of childcare.

Thirty hours a week in principle is fantastic, but when and how it is made available and how it is aligned to current employment patterns is critical. A classic example is summer holidays. We know from some recent research that about one in 10 parents leave their jobs in the summer because they cannot find childcare.

[Peter Heaton-Jones]

Q 34 Can I pick up on the issue of the proportion of childcare costs that are covered? It is currently about 70%, but under the new arrangements it will probably be about 85%—is that right?

Emma Stewart: Yes, that is correct.

[Hannah Bardell]

Q 35 In terms of conditionality, we have seen a gradual creep down in parents returning to work. We are talking now about women having to return to work when their baby is a year old. That is surely going to have a huge impact on parents of very young children, as will the sanctions attached to it, and a disproportionate effect on children. Under the UN convention on the rights of the child, it will be potentially devastating for not just families that are out of work, but families that are in work.

Neera Sharma: Barnardo’s are really concerned about the impact that the conditionality and the sanctions will have. We have already seen families being sanctioned, losing benefits for a number of weeks, being driven to food banks and being driven into debt. We would like the Government to carry out a broad independent review of how sanctions are operating, and that is something the Work and Pensions Select Committee asked for in March 2015. We think that needs to happen as quickly as possible, because there is no doubt that sanctions will increase after bringing the age down and extending conditionality. They have increased by 4% from 2009, and that trend could continue under these new proposals.

Jobcentre Plus are responsible for handing out the majority of the sanctions. Jobcentre Plus are under incredible pressure due to their staffing and capacity, but we also know that they are not particularly well set up to cater for vulnerable families. For example, our services in Scotland are telling us that parents have to take young children into Jobcentre Plus with them when they job search, because there is no alternative. There are no toilets available, and if they are late, as recently happened to a family in Fife, they are sanctioned. A mother went into a Jobcentre Plus. She was 10 minutes late, was sanctioned for four weeks, got into terrible debt and had to rely on a food bank. We have to avoid punishing families as a result of losing their income. A loss of income is not the only way to enforce conditionality. There is a need to urgently review and look how sanctions will operate and how they are operating now.

--- Later in debate ---

[Kate Green]

Q 38 Are parents and independent advisers aware of these flexibilities and able to encourage, in the negotiation of the claimant commitment, that the lone parent should raise these issues and talk to the jobcentre adviser about them?

Emma Stewart: How information is cascaded is really challenging within Jobcentre. We know that the Government have lost their ability to run campaigns effectively, but some investment is needed into how parents are made aware. For us, the issue of local enterprise partnerships, devolved activity, and how local authorities and LEPs work together at a district level to ensure that communication is made available to advisers is important. It cannot all be centralised.

[Peter Heaton-Jones]

Q 39 Picking up on the point about the support that is available for lone parents at Jobcentre Plus, we have seen a steady increase in the employment rate among lone parents. Is that because the advisory role being undertaken by Jobcentre Plus is working?

Neera Sharma: I believe that in some areas it is working, but there are huge geographical variations, especially for parents who have been out of the labour market for a long time or for vulnerable parents who may have disabilities or have a child with a disability. It varies incredibly from one area to another. Also, advisers have quite a lot of discretion in how they support families and deal with conditionality and sanctions, so I would reinforce Emma’s point around better training and guidance for staff in Jobcentre Plus, especially in their dealings with families who are vulnerable. They will see more of those families seeking their advice as the conditionality of parents with younger children starts to commence.

Emma Stewart: Can I just add that we have also seen a large increase in in-work poverty? The data on more lone parents working is clearly true, but the extent to which they are working in sustainable, quality jobs is not yet fully evidenced. We know from Work programme sustainability rates that the churn is still quite high for lone parents who are moved into work and moved off benefits, but then come back on because they find it hard to sustain a job as it is not paying enough.

[Priti Patel]

Q 40 As part of universal credit, DWP is looking at how best to support claimants who are in work but are low paid, and there are trials under way already. Emma, you mentioned that more work could be done, particularly working with the Department for Business, Innovation and Skills and employers. What are your thoughts on that? What practical advice and support could be put in place, and what more could employers do in this space?

Emma Stewart: Government can lead by example; that is a practical thing. Government at local authority and centralised level can advocate, and, as an employer itself, operate an approach where it embraces flexible hiring, so that it would be open to applicants for its own vacancies on the basis that it consider how, when and where jobs are done from day one and not from 26 weeks, which is the big shift that we are looking for.

In terms of what it can do to engage with employers through the LEP model, which is in principle employer-led, there needs to be more focus and more of a driver to embrace the need to think about flexible labour markets, to encourage flexibility, and to wrap that into commissioning. A practical thing could be done through Universal Jobmatch when someone tries to apply for a job. At the moment, if an employer tries to log one, there is no real prompt to say, “Would you consider flexible hours in this job?” That is a simple tool that can be implemented quickly.

In terms of engaging with employers, the challenge around in-work progression is a difficult one, but we do not think there is a legislative answer. It is about encouraging employers to see the business gain. BIS has done lots of good work on the legislative side of things, but needs to think about how it can create an argument, engage business and highlight good business practice in this space. We have a lot of employers who we work with via the jobsite and recruitment agency who are doing this, but there is still a big attitudinal issue that flexibility goes the wrong way for business.