Select Committee on Social Security Minutes of Evidence

Examination of Witnesses (Questions 420 - 439)



  420. Do you track some of the most common bits of anecdotal evidence that we have had? We have heard from claimants and we have heard from the advice agencies that, one, people get regularly turned away without being given an application form, they are almost barred on entry—and I accept this is anecdotal but this is what we have heard—two, that people are not well-directed between the different strands of the process, three, that they might get led into an inappropriate channel first of all. For example, the Child Poverty Action Group told us that people are advised to go for a budgeting loan rather than a Community Care Grant even though they may qualify for the latter because the budgeting loan process is faster. Do you track those kind of problems?
  (Angela Eagle) We would if there were complaints, but we have a very small level of complaints about the Social Fund. If you take the winter fuel payments out, something like 0.5 per cent of complaints that we get in the BA are about the Social Fund. It certainly should not be happening that people are barred entry or turned away or being prevented from applying for any of the discretionary funds.

  421. The Social Fund Commissioner has expressed concerns that this happens.
  (Angela Eagle) I am not saying it never happens, I am saying it should not happen and it is not appropriate that it happens. If one of our employees somewhere does that and I find out about it, it will be dealt with. It should not be happening. People should not be prevented or turned away from applying. Even if that person from the Benefits Agency knows this individual does not qualify, it is not appropriate for them to stop and prevent an application.

  422. I have no doubt, absolutely no doubt whatsoever, that you and the entire DSS are committed to that not happening and that being poor practice, what I am concerned about is there is plenty of anecdotal evidence and the Social Fund Commissioner is saying this is happening and has informed the Independent Review Service it is happening. I do not think the fact there are relatively small numbers of complaints tells you anything. In fact there should be more. I think it is a worrying fact there is a relatively low number of complaints, precisely because the people we are talking about are the least literate, the least capable of pressing their demands home, and that should not be seen as a sign the system is working well.
  (Angela Eagle) I did not quote that figure to say I was complacent about how the system was working, I just put it in for your information. It does not surprise me because, I agree with you, some of the people who end up dealing with the Social Fund are the least likely to complain whatever happens. So I am not complacent about that. If this anecdotal evidence could be turned into evidence naming districts and names, I will deal with it. It should not be happening. We do issue guidelines and extra guidance if we feel things like this are happening to remind staff of what their duties are and what they are not. All I can say is that it should not be happening, if it is happening and somebody can tell me where it is happening, I will deal with it.

  423. Does it concern you, again accepting it is a relatively small proportion of the total applications, that the Independent Review Service overturns such a high proportion of decisions?
  (Angela Eagle) In Community Care Grants, do you mean?

  424. Yes.
  (Angela Eagle) I think it is 30-something per cent,[8] is it not, off the top of my head. It is only 3 or 4 per cent of budgeting loans.[9] This increase in refusals is quite new; this increasing percentage. When something like that happens, we would start having discussions with the IRS to see if they had any view as to why. If some issues came up, we would take action about that. We are in the middle of the year yet and this increased percentage of changed decisions has come to our attention, but we are right at the beginning of a process where, with the IRS, we would start discussing why that was and see what their view was and see if we could trace the cause of it and put it right.

  425. The other phrase which certainly stuck in my mind from the evidence, which relates to people's interaction with the service, is the phrase "culture of disbelief" particularly in relation to crisis loans. What can you do about it in terms of the training and the culture that you want to impose on the whole service?
  (Angela Eagle) I hope some of the transformation we are talking about will begin to change some of the older cultures which you might characterise as some people behaving as if it is their money; that sort of culture. That has only ever been a minority in my view of our staff. What we would want to achieve would be a service which was responsive to individual customers and clients, which was sensitive to their difficulties and the circumstances in which they find themselves, and when they are applying for Social Fund loans, be it funeral payments or crisis loans, they are at a very, very difficult time in their lives. I would want to create a circumstance where they could be supported. At the same time, I think people do have unrealistically high expectations of what the system will give them, and I do not mean the Social Fund, I mean in general the welfare system. When people first come into contact with it, if they have been made unemployed in later life or whatever, they are amazed at how it works and how they are expected to interact with it. As we move towards a more client-centred, stronger front-end, adviser helpful kind of approach, I would want that to be reflected in all parts of the system.

  426. Another point on staffing which Andrew and Archy asked you about earlier. In the London context, where we do have particular recruitment and turnover problems across the public service and also in the private sector, it is perfectly possible to recruit teachers from New Zealand and nurses from the Philippines, but we have got between 15 and 20 per cent of the working age population of London who are ineligible to work on the counter in the Benefits Agency. Is this something you could go from here and take up with higher authorities? If people are seeking a Civil Service post, even at the most basic administrative level, people who do not have full British citizenship cannot apply, and we are excluding a huge proportion of the working age population.
  (Angela Eagle) I will take that away with me and get back to you on that.[10]

  427. Another couple of questions about administration. We heard evidence from CABs who, when asked what wish they would like granted about the administration of the system, were of the view that certainly the management of crisis loans would be transformed if the basic administration and the delivery of Jobseekers' Allowance and Income Support could be ironed out, because it was the non-delivery of benefits on time which was one of the principal elements of crisis loan applications. What are you going to do about that?
  (Angela Eagle) We know that a third of crisis loans are about that gap between when people apply for benefit and before the first Giro cheque arrives. A move to ACT, where you can make more automatic payments and faster, might be of assistance there, and we need to streamline our bureaucracies to ensure that we do protect the gateways to benefit at the same time. I think the ONE approach, where you can go in, have one session in one place, get all your forms filled in with assistance correctly, will assist. I think re-tooling our computer systems, which I hope in this new utopia will actually be able to talk to each other and interact in a sensible way, will also assist. Other things are access to the system via the internet or on the telephone, where in fact somebody could take you through an electronic claim form over the telephone, you could give the information and give an electronic signature, would also assist. So a lot of the modernisation we are just at the beginning of now will transform our ability to do this, and I hope therefore we would be able to get that percentage of money spent on crisis loans for alignment down considerably in due course.

  428. The Chairman would expect me to ask you, when will this utopia be of which you talk?
  (Angela Eagle) It begins to exist in its first forms in little pockets. Certainly, for example, telephone claiming for pensions is now happening for all those as they come up for retirement. The CSA has the first computer which will give us proper access and management information and access to accounts and ability to access over the phone and all of that. We have already got prototypes of electronic claim forms and internet claim forms which are up and running in little pilots. We have to deal with the replacement of the big computer systems, and clearly that is Income Support and JSA, in order to transform them. The Early Office Infrastructure Project which we are doing in the BA will give us the first networks in our systems which will enable us to do this work. Remote access terminals which are connecting local authorities with BA offices have already begun to forge the kind of electronic links which are the basic requirement.

  429. Is there a timescale?
  (Angela Eagle) It will come gradually.

  430. There is no timescale for the Social Fund dimension of it?
  (Angela Eagle) The Social Fund dimension will fit in with the modernisation and the reorganisation as it works. We have to decide where to put it, whether it goes in the Working Age Agency, whether it stays with the Pensions Directorate, how we are going to offer that system. We are in the middle of doing various bits of work to make that decision. I expect it will go at the same pace, it is not a little thing that is going to be left behind as an afterthought. We have to take the whole system with us as we separate it out and modernise it.

  431. Going back to the point about crisis loans, is that trend improving?
  (Angela Eagle) I do not know, I have only seen this year's figures. We will get that for you.[11] My anecdotal understanding is that the shape of crisis loans has been pretty unchanged in respect of reasons for granting them. One third tend to be granted because people have money stolen and therefore have no money at all; a third is this alignment reason, and a third is sudden crisis. I think that has been the basic shape of it for a while, but we will confirm that for you.

  432. Assuming we are not going to be on the sunlit uplands for a little while yet in terms of integrated IT systems, is there anything that could be done within the current system to actually make the Social Fund process more user friendly, a statement of account, for example, for people budgeting loans, more meaningful and personal explanations for people as to why they have been unable to obtain a grant or a loan. Is that possible?
  (Angela Eagle) On statements of account, we are trying to improve the letters that go out and the notifications across the system. We have a project called Better Letters. We have, believe it or not, improved the Social Fund letters in consultation, by the way, with the voluntary organisations that, no doubt, you have had giving evidence to you. The initial letters will contain a statement of outstanding debt. I do not think we are geared up to be able to send out monthly statements on some of these repayments and, in fact, the administrative cost of doing so would probably amount to more than the money that we have loaned. If I was going to spend that money I would rather put it into the loans budget. We have to get it right. Clearly, also, if people ask questions they have a right to expect that our staff will give them good explanations. I know that that does happen in many cases, clearly we have heard about cases where it does not.

  433. That is what you hear. It does not take away from the good service.
  (Angela Eagle) There is good service and there are dedicated people working in difficult circumstance to deliver a good service. There are situations, and you get to hear about them, and so does the IRS, where that does not work as well as it should do. We do need to try to get more consistency across and pick up our game in those areas.

  434. I do understand that last point, although I do think just because we are dealing with people at their most desperate, the sharpish end therefore their sense of satisfaction is going to be much tougher.
  (Angela Eagle) It is. They may be so distressed about something they cannot really focus on information anyway, they may be just too upset.

  435. The point about administration, which leads me to my very last question, the administration cost for the Social Fund of £215 million is high. Why?
  (Angela Eagle) It is a lot lower than it used to be, it was over 50 per cent when the Social Fund was introduced and we got it down to 15 per cent in 1997/98 and then in the last figures we have it is back up at 20 per cent, 19.3 per cent. That is the winter fuel payment administration which has caused the difference. It is also the Taylor case,[12] the 60 to 65 year olds, the 109 million people[13] we had to set up a claiming process for in order to pay retrospectively the winter fuel payment to them. I suspect we can get it back down towards the 15 per cent. Administration costs are always going to be higher in the Social Fund than the generality of the system, because they are one off payments in general, they are discretionary, so it is not as easy to run streamlined systems. The administration costs are high because there is one payment, and then we do the loan repayment, and all of that, which is administratively a cost you do not get when you are looking at the cost of administering any other benefits.

Mr Dismore

  436. Can I, first of all, raise the position of the Social Fund Commissioner, who is appointed by the Secretary of State. This does raise questions in the Human Rights Legislation as to the appointments procedure, particularly in relation to his independence. What thought has been given to that particular issue and is there any suggestion that the appointment might be made independent to the department?
  (Angela Eagle) We are happy with the position the way it is. It is for a court to decide in the end, but the operation of the Commissioner has always been independent. I suppose you could make some changes if you wanted to, appoint him somewhere else, but I do not think the Commissioner himself or any of the Commissioners I have known have ever had a problem or complained they have not been allowed to do their job independently. We are pretty happy about it.

Mr Thomas

  437. I am a little surprised that you say that, Minister. As we know the Lord Chancellor has had to change the whole method by which part-time judges, previously known as assistant recorders, are appointed because it was seen that that was going to be in contravention of Article 6 of the Convention, which, as you know, has been incorporated in our law through the Human Rights Act. Indeed, the whole of planning law is up in the air at the moment because the way in which planning inspectors are appointed by the Secretary of State for the Environment. It has been challenged successfully, at first instance anyway, by a court. I do not think, with respect, it is sufficient to say, we think he is independent, because the law at the moment would suggest if he is appointed by the same department which he is meant to oversee, there is a human rights issue there.
  (Angela Eagle) That is a caricature of what I have said. We have taken legal advice and we are not planning any changes.

Mr Dismore

  438. Another point to do with the inspectors, the issue of the rate at which loans are recovered. That, in itself, is not subject to independent scrutiny and the only way of challenging that is through a judicial review. Is that not a rather cumbersome procedure to resolve disputes of that nature?
  (Angela Eagle) I am not sure there has ever been a judicial review.

  439. Maybe because people cannot access judicial review because they know there is no appeal mechanism.
  (Angela Eagle) I think you have to get this into perspective. These are small amounts of grant money. The average Community Care Grant is £400, some of the minimum budgeting loans are £200, where I think around £280 is a maximum budgeting loan at the moment. We have to be careful we do not overlay—you have just been asking me about administrative costs—our entire system, which is a small discretionary grant, not access to benefit for the next five years. We have to be very careful we do not overlay it with huge, judicial administrative oversight that actually costs more to administer than the value of the grant. If we are going to do that, as I said earlier, I would rather put that money into increasing the budget for the Social Fund.

8   Note by Witness: 34 per cent. Back

9   Note by Witness: 9 per cent (see memorandum pp 117-134.). Back

10   See Ev. p. 152. Back

11   See Ev. p. 153. Back

12   R v SFI ex parte Taylor, The Times, 20 January 1998. Back

13   Note by Witness: Up to 1.9 million. Back

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