 House of Commons |
Session 2005 - 06 Publications on the internet Standing Committee Debates Welfare Reform |
Welfare Reform Bill |
The Committee consisted of the following Members:John
Benger, Chris Shaw, Committee
Clerks †
attended the Committee Standing Committee ATuesday 31 October 2006(Afternoon)[Mr. Jimmy Hood in the Chair]Welfare Reform BillClause 15Contracting
out Amendment
moved [this day]: No. 160, in
clause 15, page 13, line 33, after
‘relates’,
insert— ‘(d) shall be
subject to the requirements of the Disability Discrimination Act 1995
(c.50) and the Human Rights Act 1998(c.42)’.—[Danny
Alexander.] 4.5
pm Danny
Alexander (Inverness, Nairn, Badenoch and Strathspey)
(LD): It is a pleasure to welcome you to the Chair again,
Mr. Hood. I look forward to serving under your chairmanship
in what promises to be a lengthy but engagingly good-tempered sitting.
I shall be brief, as much of what I wanted to raise was mentioned in
the previous debate.
This is a probing amendment to
ensure that the requirements of the Disability Discrimination Act 1995
and the Human Rights Act 1998 will be taken into account in the
Department’s contracting with private and voluntary
organisations that are to be engaged to deliver much of the work
involved in rolling out pathways to work, and so on.
As he did during our sitting on
19 October, in his reply to the previous debate the Minister gave some
welcome reassurances on the Disability Discrimination Act and the
disability equality duty, which comes into force later next month and
which providers in the private and voluntary sector will have to take
into account. I ask
the Minister to say something in this debate about the Human Rights
Act, because much of what we are discussing has implications under that
Act, not least in respect of benefit sanctions, but in other areas,
too. What consideration has the Minister’s Department given to
the human rights implications of the contracting out of public
functions under clause 15?
In respect of the sanctions,
the Minister made it clear that the Government have no immediate
intention of giving providers the power to sanction that the clause
allows for. That may well come about in due course in the circumstances
that the Minister tried to describe in the previous debate—if
not to my satisfaction, at least to his.
Will the Minister give an
undertaking that an assessment will be made of the policy’s
impact on human rights, on child poverty and on disability equality, so
that the potential adverse impacts of giving those powers to
contracted-out providers are taken into account before any decision is
made on contracting out sanctions? I got the impression from
the Minister’s remarks in the previous debate that he is keen to
enter a substantial number of caveats before any decision is made to
contract out benefit sanction or decision-making powers. Before any
decision is made, a wide range of factors must be taken into account
and I will add them to his list: human rights, child poverty,
disability equality. I look forward to the hon. Gentleman’s
response.
The
Minister for Employment and Welfare Reform (Mr. Jim
Murphy): It is great to see you in your place,
Mr. Hood. We have made substantial progress since you last
refereed our proceedings. A cursory look at the Hansard record
shows that we have made progress via Marx, Stalin and the
Jacobites’ visit to Derby. To understand where they fit in you
will have to read the record carefully, Mr.
Hood. I shall be brief
so that we can make progress. I can confirm to the hon. Member for
Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) that child
poverty has been established as the No. 1 priority of the Department
for Work and Pensions. We are reviewing all our employment and welfare
programmes to ensure that they have the maximum impact on child poverty
and we will examine not just this Bill and the transition of existing
customers, but every proposal to discover their impact on child poverty
and their likely outcome.
I confirm again for the
purposes of the record the assurances that I gave on 19 October, to
which the hon. Gentleman alluded, about the protections of the
Disability Discrimination Act and the Human Rights
Act. The effect of
clause 15 is to allow the Secretary of State to authorise providers to
carry out certain functions of his relating to conditionality. It does
not transfer those functions to the providers. Where a contractor is
exercising functions by virtue of clause 15, subsection (7) provides
that in most cases any act or omission of the contractors in carrying
out these functions is to be treated for all purposes as an act done or
omitted by the Secretary of State. For the purposes of the Disability
Discrimination Act or the Human Rights Act, anything done by a
contractor would be regarded as done by the Secretary of State. That
means that the Secretary of State remains responsible for ensuring that
those functions are carried out in away that is compatible
with both the Disability Discrimination Act and the Human Rights Act. I
hope that that reassures the hon. Member for Inverness, Nairn, Badenoch
and Strathspey and my hon. Friend the Member for Caerphilly
(Mr. David), who also raised the matter in an earlier
contribution to our proceedings.
Mr.
Tim Boswell (Daventry) (Con): I am grateful that I am able
to intervene on the amendment, although I do not need to do so,
particularly after the extremely helpful response that the Minister has
given. However, will he concede two things? First, will he concede that
it is important, as indicated in the earlier amendment, that any
contractor, whether contracted for services, let alone for decision
making, is well apprised of the requirements of the legislation and
trained on it? Secondly—this is a wider issue—will he
confirm that, as a matter of good practice, both the
pathways to work Jobcentre Plus providers, and the other providers of
contracted services, should be encouraged to get together from time to
time to share best practice in this and in other more operational
areas?
Mr.
Murphy: I will give a very brief
response. On the contractors, I made that position clear in respect of
the Disability Discrimination Act and the Human rights Act, but it also
captures what happens with subcontractors. That is the important point.
Contracts under the clause will be drawn up so that providers are
required to carry out their functions with proper regard to the needs
of disabled people. For example, pathways contracts will have clauses
that prohibit discrimination and harassment on the ground of
disability. Providers will also have to provide reasonable adjustments
so that customers can participate in conditionality, and promote
equality of opportunity. A cursory reading of the contracts and the
paperwork concerning the contracts—I made a commitment in our
earlier proceedings to place that in the public domain—will show
that the potential contractors in the private and voluntary sector will
be under no illusions about their statutory responsibility in terms of
the legislation. With those comments, and that reassurance, I invite
the hon. Gentleman to consider withdrawing his
amendment.
Danny
Alexander: As has been mostly been the case over the past
few days, the Minister’s response on the amendments has been
reassuring. Amendment,
by leave,
withdrawn. Question
proposed, That the clause stand part of the
Bill. Mr.
David Ruffley (Bury St. Edmunds) (Con): We have had a good
debate about the preceding amendments, but I should like to say one or
two things about the importance of the involvement of the private
sector and the voluntary sector, and why Conservative Members support,
with some reservations, the proposition contained in the clause. The
Employment Related Services Association—ERSA—which gave
evidence to the Select Committee earlier this year, rather punchily
suggested this about the advantages of private and voluntary sector,
non-state-employed personal advisers being involved in the roll-out to
pathways to
work: “Rightly
or wrongly, individuals are often uneasy dealing with Jobcentre Plus
officials. These officials are sometimes viewed as
‘agents’ of the state, put in place to judge, and
determine whether or not an individual is actively seeking
employment.” Those are
not my words, and that might be stretching a point. Incapacity benefit
personal advisers and the other officials at Jobcentre Plus are
dedicated professionals who are there to help people, not to catch them
out wilfully or with malice aforethought.
4.15
pm What ERSA is
driving at, however, is this. In seeking support, claimants will often
show a willingness to take part in training or condition management
programmes, or they will say that they want to get better. However,
they know that the Jobcentre Plus official to whom they are speaking
will be wondering how ill or disabled
they are, and outside groups get the sense that claimants feel that they
might compromise their right to benefit by disclosing too much. Again,
those are not my layman’s perceptions, but the thoughts that
were expressed time and time again in the evidence to the Select
Committee. There can be an element of trust and a special bond between
a personal adviser in a charitable body and the person whom the
personal adviser is helping to get back into work, and it is important
that we compare that with the relationship that a person will have with
someone who is working for the state.
There is a second issue on
which we must reflect when discussing increased contracting out to the
private and voluntary sector. It is an issue about which sector must
have confidence in bidding for contracts, but we have not yet discussed
it, which is why my comments will be very apposite to the clause stand
debate. Working Links is a public-private sector body and does not
belong purely to one sector or the other. I have had many discussions
with its representatives and visited various of its projects over the
past months. As the Select Committee notes, Working Links believes that
the current approach taken by Jobcentre Plus and some pilots
has “promoted
unnecessary complexity in providing employment support to benefit
claimants”. That is the
result of the perceived complexity of the administration process and
the form filling. Working Links said that that did not happen to the
same extent in employment zones, which are private sector led, as we
all know. The
argument for the employment zone model was supported by the Centre for
Economic and Social Inclusion and Reed in Partnership, which, according
to the Select Committee, suggested that
“a national roll-out of Pathways
based upon the pilots would not be as effective as one based upon
Employment Zones which allow greater freedom and flexibility to service
providers” to test
different approaches free from too much form filling. The Secretary of
State for Work and Pensions acknowledged that in evidence to the
Committee, saying that
“in the Employment Zones, for
example, the private and voluntary sector providers have a very good
track record in improving outcomes for Incapacity Benefit claimants and
Jobseeker’s Allowance claimants. I think their
performance”— that
of the private and voluntary
sector— “actually
exceeds Jobcentre Plus in a number of very important
respects.” The
principle of contracting out is therefore a good one, but—there
is a but—there is a demand for safeguards. We need to understand
that, as the Minister will when he oversees the contract design, which
will be an iterative process. As the Disability Rights Consortium
said, “The
impact of using private and voluntary sector providers to deliver
Pathways in new areas without having to replicate existing provision
will need to be closely evaluated as support may
vary” under the
contracts “by locality,
provider or individual adviser. Identifying the impact on employment
rates by different impairment groups will be
important.” Is that point
reflected in the way the Minister is designing the contracts, looking
at the effect of these contracts in different areas with different
providers on
the employment rates of different impairment groups? I imagine that he
has thought of this, but is there any mechanism by which that will be
measured as the roll-out goes
forward? I turn to
another area where safeguards are clearly required. The Opposition do
not believe in red in tooth and claw, free market provision; in
particular we are not keen on widespread, so-called cherry picking or
creaming. Some claimants, whether for employment and support allowance
or incapacity benefit, by definition have different disabilities. Some
will find it easier to find employment than others. Those with severe
learning disabilities, mental health conditions, autistic spectrum
disorders as well as those with severe physical disabilities will
require more support and take longer to find sustained employment than
those with less serious conditions.
Contractors should not be
allowed to cherry-pick just those claimants who are easiest to place.
Contractors must be able to meet their targets by getting more people
back into work so that the Government can hit their target of 1 million
men and women off the IB rolls by 2016. But it must not be a simple,
bog standard form of target hitting by helping the easiest first. I am
not asking for specimen contracts, but will the Minister share his
thoughts on this and give us assurances that the contract design
process is looking at how cherry picking can be minimised? It will
never be eliminated and it would be quite unrealistic to think that it
could be. The
Minister referred to proposals first mentioned by my hon. Friend the
Member for Runnymede and Weybridge (Mr. Philip Hammond) on
Second Reading about payment by results. I do not want to have a second
reading debate now about what Opposition policy is. I know that you,
Mr. Hood, being a stern and disciplined chairman, will not
want anyone to be tempted down that route. But the Minister mentioned
it on the first day of these proceedings and he said that he might want
to raise it later on the Bill. I have a sneaking suspicion that this
clause stand part debate is the right
time. For the record
and so there is no ambiguity, the Government proposals and the briefing
that they have given to the outside organisations are to the effect
that payment by results, the outcome-based part of the new regime that
the Bill introduces and to which this clause relates, will involve
roughly a 30 per cent. upfront fee to the private and voluntary sector
providers and 70 per cent. will be payment by results: put crudely, if
a job or training is delivered by the contractor who will be able to do
the roll-out for ESA if the Bill goes through. It will be done anyway
as part of the national roll-out of pathways before ESA comes
in. The Minister
referred to a Conservative proposal for the payment by results not
being 70 per cent. purely outcome based and 30 per cent. upfront fee,
but being 100 per cent. payment by results. That is not true in
relation to all the new claimants who will be subject to the Bill. New
claimants going on to ESA will be helped by contractors who will get 30
per cent. upfront and70 per cent. payment by
results. The Minister
will be pleased to hear that we are not in dispute with that
proposition. Our point is slightly different. The Minister has said
correctly that, if
someone is on incapacity benefit for two years, they are more likely to
die or retire than to ever find a job. He then went on to
say: “as a priority we
will focus on those who are newest to incapacity benefit or employment
support allowance.” In
the same vein, the Government Green Paper said, in the roll-out of
pathways to existing claimants: it will be only “as resources
allow”. That got my hon. Friend the Member for Runnymede and
Weybridge, my hon. Friends on the Opposition Front Bench here today and
me, together with other outside groups, thinking how we could get a
better deal for existing claimants than just what resources allow. We
know the phrase “as resources allow” is Treasury speak
for “we’ll see what we can do on the public spending
round, but maybe they’ll get more money and we’ll let
them have more support, but only dependent on what the Treasury can
find”. We were
concerned, as were outside bodies, about what is a resource constraint.
Under the Bill, not enough support will be given to existing claimants
when they come on to ESA, nor will requisite support be given to
existing claimants on IB before ESA kicks in.
We all know that the Department
works under cash constraints. An example of how that works is that the
National Audit Office has identified anecdotal evidence of creaming
within the new deal for disabled people. Contracts out to tender for
the NDDP were based on price, encouraging a large number of low unit
price and low volume contracts offering services. Low numbers were also
targeted by the programme because Jobcentre Plus was allocated only
enough funds for around 4 per cent of the total IB population in an
area. This is not something I say critically of Ministers, but we have
to acknowledge, as the National Audit Office have acknowledged and the
Government in replies have occasionally acknowledged, that the numbers
of people who are the subject of help in, for instance, the new deal
for disabled—it would also apply in similar programmes—is
4 per cent. This is a very small figure and we have to ask ourselves
why it is only 4 per cent. It is not because Jobcentre Plus only wants
to help 4 per cent; it is due to public spending constraints.
Let me give one example.
Ministers will be aware of this and I do not think they are any more
happy about this than we are. The Sure Trust, among many
others—I could also name the Patwith Trust—say that there
can be a contract to get, for the sake of argument, 500 people into
work who have physical disabilities and who have been on benefit for,
say, two or three years. If the contract is to get 500 people into work
in Birmingham, for example, the organisation has a yearly contract to
hit that 500 target.
The organisation may hit the
500 target after three months. It has done very well. Having reached
the target nine months ahead of schedule, it goes back to Jobcentre
Plus and says, “We have done in three months what the contract
says we can do in 12 months. We are on a roll here. We are doing
terribly well. Can you give us more money so that in the next nine
months we can get more people back to work?” The answer is no
because of the spending constraint at the Department. The departmental
budget for that cannot be exceeded.
We know this is not an anecdotal
example, it happens all the time.
Adam
Afriyie (Windsor) (Con): Is my hon. Friend suggesting that
the policy of the Department for Work and Pensions or the policy of the
Treasury could be holding back the speed of roll-out and take-up of
ESA? 4.30
pm
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