Select Committee on Work and Pensions Minutes of Evidence


QUESTIONS SUBMITTED TO THE DEPARTMENT FOR WORK AND PENSIONS PRIOR TO THE EVIDENCE SESSION

INTRODUCTION

  The Committee welcomes the revised format of the Annual Report and particularly the concise but comprehensive assessment of the Department's performance. The Committee would however be grateful if the Department could reinstate the PSA summary table towards the front of future performance reports. The summary table is very useful and provides a single comprehensive view of the Department's performance across the PSA targets.

Response

  We will bear this in mind for future reports.

CHILD POVERTY

Question 1: The Annual Report retains a "slippage" status for PSA-1a [halve the number of children in relative low-income households by 2010-2011]. Can you confirm whether the performance data underpinning PSA 1a will be available to the Committee ahead of the oral evidence session in July?

  Answer 1: Yes, we will send this data shortly.

Question 2: The Annual Report and the recent Department response to the Committee's report Best start in life? Alleviating deprivation, improving social mobility and eradicating child poverty refer to £125 million of expenditure being committed to local authorities for projects associated with reducing child poverty.

Question 2a: What projects will this resource support?

  Answer 2a: A series of pilots will test ways to expand successful initiatives—such as offering new services in children's centres. They will also test new approaches to improve families' incomes, and to ensure that some of the poorest children are on the path to success and break cycles of poverty once and for all.

  The pilots include:

    —  Family Intervention Projects to provide whole family intensive support to over 500 additional families who are experiencing risk factors which exacerbate and cause persistent severe poverty, and contribute to intergenerational worklessness—for example drug and alcohol misuse.

    —  HM Revenue and Customs advisers have already begun working in children's centres in Preston and Newham, helping parents to better understand and claim tax credits—to support families with everyday costs and childcare costs.

    —  A further 30 Children's Centres across 10 Local Authorities will be funded to offer enhanced work-focused services to parents to boost their confidence, skills and support them to enter and progress in work.

    —  The In-Work Credit programme will be developed and will target potential additional earners, including partners of the unemployed, which will provide financial incentives and support for couples with children to move into work.

    —  The London Childcare Affordability pilots will be extended to support new ways of making formal childcare more affordable for low income families, allowing parents to enter and remain in the labour market and supporting better outcomes for children and young people. The pilot will support parents to overcome the particular barriers they face in London. The possibility of extending the pilot to one or more areas with barriers to childcare outside the capital will also be explored.

    —  Testing additional financial incentives for parents in London to return to work that will consider the higher childcare and transport costs which act as a particular disincentive in London and build on lessons learned from ongoing pilots;

    —  A new one off Child Development Grant of £200 will be available to low income parents in 10 local authorities from early 2009. Parents who take-up childcare places and work with children's centre staff to take agreed action to support their child's development and improve their families' wellbeing, could be eligible;

    —  A programme to explore options to improve supported accommodation for teenage mothers, providing young mums living independently with additional services to support the health and development of their children, improve their parenting and support them with learning.

    —  Grants will also be made available to local authorities to design locally targeted packages to reduce child poverty, working with the third sector, local businesses, families and communities.

Question 2b: How was the figure of £125 million over 3 years calculated as being sufficient?

  Answer 2b: For each pilot, Departmental officials have calculated the amounts that would be sufficient to pilot each programme for a representative sample of the country and population to allow for rigorous evaluation of the impact on child poverty and improved outcomes for the children and families involved. This took into account previous evidence of likely impacts on improved outcomes and reductions in child poverty, and set up pilots that were most likely to have a positive impact on these factors. The final allocation included provision for Barnett consequentials.

Question 3: The Annual Report Figure 4 shows that the proportion of parents with care on Income Support/Jobseekers Allowance in receipt of maintenance on the "new scheme" is higher than the proportion on the "old scheme." Are children being financially disadvantaged if their parents do not transfer to the new scheme? Can the Department estimate how many children are being financially disadvantaged by being kept on the old scheme?

  Answer 3: Currently parents with care on benefit assessed under the "old scheme" rules keep none of the money paid in child maintenance, whilst those on "new scheme" are allowed to keep the first £10 per week of any maintenance paid. This different treatment will be removed by the end of 2008.

  The changes being introduced will enable all parents with care on benefit, regardless of which scheme they are on, to keep the first £20 per week of maintenance paid. So for those on the "old scheme" they will for the first time benefit from child maintenance payments, and for those on the "new scheme" the amount they can keep is doubled. From 2010 the £20 will be doubled again to £40.

  The effect of these changes is:

From 2008—

  We estimate around 40,000 parents and 55,000 children on the "old scheme" could benefit from these changes.

  In total, from both schemes the £20 per week disregard will ensure around 250,000 children and 170,000 parents with care will benefit.

From 2010—

  The £40 per week disregard will lift around 50,000 children out of poverty. Around 350,000 children and 250,000 parents with care will benefit.

  Further differences between the two schemes are created by the nature of the calculation itself. For example under the "old scheme" where a non resident parent is on benefit there is generally no liability to pay maintenance, whilst in the same situation on the "new scheme" a £5 per week flat rate liability will generally exist. It is therefore the case that parents with care on the "old scheme" in these situations are potentially worse-off than if they were assessed under "new scheme" rules. There are around 167,000 such "old scheme" cases where the non resident parent is on benefit.

  But moving cases between the two schemes has not proven to be possible. Ministers recognised the issues affecting child maintenance and that is why they asked Sir David Henshaw to advise on the redesign of the child maintenance system. In his report Sir David recognised the differences between the two schemes but also the difficulties in achieving a successful conversion and he stated:

    "This would be very challenging to administer and past experience does not support the case for taking this approach"

  Given this advice Ministers decided on a different approach which was outlined in the Child Maintenance White Paper and taken forward as the Child Maintenance and Other Payments Bill which received Royal Assent in June.

  A course of action has been set out which will take us from the current two child maintenance systems to a single set of revised rules for ALL clients who wish to be supported by the statutory scheme. In moving from the existing schemes parents will be supported to make choices, be that making private arrangements; or, where both parents agree, continuing with their current arrangements supported by a simple cash transfer service; or becoming a client of the future system. We expect this process to commence in 2010-2011 and to take around three years.

Question 4: The Annual Report provides a status of "not yet assessed" on PSA-3b [increase the number of children in lower-income working families using formal childcare by 120,000] but confirms that the first data will be available in June 2008. Will you be able to supply the Committee with the figures and the assessment before the oral evidence session in July?

  Answer 4: Yes. The 2007 Parents Childcare Survey, published on 29 May 2008, shows that there were 71,000 fewer children from lower income working families accessing formal childcare compared with 2004.

    —  At the baseline date in 2004 take-up of formal childcare in lower income working families in percentage terms was 25.8%. Our target of 120,000 additional users would have equated to an increase by 2008 of 19.5% (or 5.1 percentage points) to 30.9%.

    —  By 2007 there had been an increase in the proportion of children in lower income working families using formal childcare of 5.2% (or 1.4 percentage points) to 27.2 %.

    —  However, this was not statistically significant—it may be due to sampling differences. There was no change in the overall take-up of formal childcare and early years' education.

    —  Over this period there was a fall in the total number of children in the population (as measured using child benefit records). In addition shifts in the number of families in the income bands used to measure this target mean that there was a reduction in the number of families with children in the lower income bands.

    —  Increasing take-up is also a challenging target as it requires action to engage successfully with traditionally hard to reach groups, who may not trust or value early years' services.

Question 5: The ESA support rate is set at a number of different rates. Would each of the rates at which ESA support rate is paid be sufficient to lift out of poverty (a) a lone parent with one child and (b) a couple family with two children where the second parent is not working and claiming carers allowance? What account was taken of the Government's child poverty objectives when the support rate of ESA was set?

  Answer 5: The rates at which ESA will be paid for people in the Support Group are £89.50 for both singles and couples on the contributory side, and £102.10 for singles and £142.10 for couples on the income-related side. The Support Group rates ensure that these are the minimum levels of income, excluding housing and child costs, those in this group are expected to live on and compare to £86.35 for singles and £131.80 for couples currently.

  Whether or not these rates would be sufficient to lift a family out of poverty would depend on household circumstances and other sources of household income from earnings, child maintenance, other benefits and tax credits.

  The higher rates for those in the ESA Support Group were set in order to target resources on those most vulnerable to poverty, including those with children.

EMPLOYMENT

Question 6: Performance on PSA-4a [increasing the employment rate] has been assessed as "on course." The Annual Report confirms that the GB employment rate increased to 75% for the period December 2007 to February 2008. The most recent set of Office for National Statistics data for the net migrant inflow to the UK shows that there was an increase of 191,000 people in the UK during 2006. In considering the Department's performance in delivering PSA 4a, how does the Department differentiate between the impact of the Department's employment initiatives and the impact of migration in raising the employment level?

  Answer 6: The Department routinely evaluates the labour market and fiscal impacts of our main employment programmes. This does not enable us, however, to differentiate between the combined impact of all our employment initiatives and the impact of other factors in delivering PSA 4a. There is a wide range of factors impacting on the employment rate and level which are hard to disentangle. For example, aside from Government labour market policy, employment will be affected by the general state of the economy and by demographic changes.

  On migration, the Government's analysis of the impact of migration on the economy and labour market was most recently set out in the two documents published on 11 June:

    —  The impact of migration from the new European Union Member States on the UK Labour Market: http://www.dwp.gov.uk/asd/asd5/wp52.pdf

    —  Government response to the House of Lords Economic Affairs Committee http://www.parliament.uk/documents/upload/GovernmentResponse.pdf

PENSIONER POVERTY

Question 7: The Annual Report retains a status of "slippage" for PSA 6 [pension credit]. The report states that "it would not represent value for money to repeatedly press unwilling eligible people to take up their entitlement". How does the Department identify the reasons why pensioners are not willing to claim pension credit?

  Answer 7: Most of our evidence on reasons for not claiming comes from research among people who may be eligible for Pension Credit. The following is a summary of that evidence. It should be noted that most of this evidence dates from 2005, so care must be taken in applying it to the present.

  DWP qualitative research found "three primary barriers that prevent older people from making a claim for Pension Credit:

    —  a belief that they are not eligible;

    —  a concern about how the receipt of Pension Credit would interact with other benefits that they are currently receiving; and

    —  a lack of awareness of Pension Credit."

  The research also found that it was uncommon for older people to decide not to make a claim on the basis of the amount of Pension Credit that they would be likely to receive. However, take-up is relatively high among people who are entitled to larger amounts, and the survey found that around 15% more non-recipients said they could be persuaded to claim if they could be awarded over £15 per week, compared with the number that said they could be persuaded if the amount was less than £5 per week. This suggestion, coupled with what is said to staff when discussing Pension Credit claims with customers, that eligibility for small amounts is likely to be a factor affecting customers' propensity to claim.

  In summary, there are a variety of reasons why more potentially eligible people do not claim Pension Credit. These reasons include lack of awareness, plus attitudinal barriers, and concerns about the claim process, but the main barrier seems to be perceived ineligibility, based on lack of understanding, and fear about interaction with other benefits.

Question 8: Annual Report provides a final assessment of "not met" on the 1998 pensions PSA target. The CSR2007 PSA 17 [Tackle poverty and promote greater independence and wellbeing in later life], on which you are the lead department, makes no specific reference to increasing private pension provision.

Question 8a: What plans does the Department have to ensure private sector pension provision increases?

  Answer 8a: As a result of changes implemented by this Government many of today's pensioners have benefited from vastly improved standards of living. Measures such as pension credit have helped to lift 900,000 pensioners out of relative poverty and, for the first time in a generation, a pensioner today is no more likely to be living in poverty than any other group.

  A decade ago, UK pensioners had a median income a seventh below the UK average, now it is a tenth above. And the income of the average British pensioner has gone up from being the ninth best in Europe in 1996 to being the fifth best today. [Sources: Eurostat data]

  However, we face important issues for the future:

    —  DWP estimates suggest that approximately seven million people are currently not saving enough to meet their retirement aspirations.

    —  Only around 16% of 20 to 24-year-olds are saving for a pension, compared with about half those aged over 35.

    —  And about 40% of moderate to low earners (£5,000 to £35,000) are saving towards a pension compared to three quarters of those earning over £35,000.

  In the White Paper Security in Retirement: towards a new pensions system, the Government outlined an integrated package of reforms which built on the analysis and recommendations of the Pensions Commission.

  The first part of this reform package was implemented in the Pensions Act 2007:

    —  It ensures that there is a simpler, more generous and widely available State Pension to address the historic inequalities in entitlement especially for women.

    —  It also provides for a gradual increase in State Pension Age to ensure the system is sustainable in the face of demographic change and enable people to extend their working lives.

    —  The measures contained in the Pensions Act 2007 ensure that there is a solid foundation upon which people can plan for retirement.

  The current Pensions Bill builds on Pensions Act 2007 through a set of reforms, primarily to the private pension system, that will enable and encourage more people to build up a private pension income to supplement that received from the state.

  This Bill will simplify pension saving enabling individuals to take responsibility for saving for their own retirement. All eligible workers will be automatically enrolled into a qualifying workplace pension- helping to overcome barriers to saving such as inertia. Individuals will have the right to opt out.

    —  DWP estimates indicate this will result in between six and nine million people newly participating or saving more in workplace pensions, transforming the savings culture in the UK.

  For the first time employers will be required to contribute to workers' pensions, providing individuals with a clear incentive to save, and helping those on low and moderate incomes to build up their pension pot.

    —  We estimate that around 1 million workers who were already saving will have their employer contributions increased to at least 3%.

    —  Overall annual pension contributions are estimated to increase by up to around £10 billion a year by 2015.

    —  Leading to an increase in pension income of around £11 bn a year by 2050.

  A new scheme of simple, low-cost personal accounts will be introduced which will give those currently without access to a good quality workplace pension scheme—in particular, low to moderate earners—the opportunity to save.

  This Bill will strengthen existing workplace pension provision by simplifying the rules governing private pensions, including measures arising from the deregulatory review of pensions. It will also further simplify the state pension system to give people a better understanding of the state pension they are entitled to—making planning for retirement easier.

  Industry expertise will determine how the scheme is built and run—but within a framework set by Government. This bill will extend the remit of the Personal Accounts Delivery Authority so that it can establish the infrastructure necessary for delivering the new scheme.

  The responses to the White Paper highlighted the consensus behind the need to introduce personal accounts. The overwhelming message across the spectrum of stakeholders is they support both the need for reform and our approach to its delivery.

  The measures contained in the Pensions Act 2007 and the forthcoming Pension Bill deliver security in retirement for pensioners, while ensuring the system as a whole is fair, sustainable and affordable.

Question 8b: What does the Department estimate that the increased reliance on state support for pensioners will cost the Government in 10, 20 and 30 years time?

  Answer 8b: In 2006-2007 the Department spent the equivalent of 1% of Gross Domestic Product (GDP) on income related benefits for pensioners (ie Pension Credit, Housing Benefit and Council Tax Benefit). This is projected to:

    remain steady at 1% of GDP in 2010,

    then fall to 0.7% of GDP in 2020,

    remain at this level in 2030,

    falling again to 0.6% of GDP in 2040.

  In comparison, spending on contributory state pensions is projected to increase significantly over time;

    from 4.2% of GDP in 2006/07; to

    5.8% of GDP in 2040.

  In total the Department spent the equivalent of 6% of GDP on pensioner benefits in 2006-2007; this is projected to increase to 7% of GDP by 2040.

Question 8c: How much does the Department expect private sector pension provision to increase over the same time scale?

  Answer 8c: The Department has working assumptions based on the current evidence base for the impact of automatic enrolment and minimum employer contributions. DWP estimate that:

    —  This will result in between six and nine million people newly participating or saving more in workplace pensions.

    —  There will be an increase of around one-quarter of the working age population saving in a pension following the introduction of the reforms. This will be a permanent increase in the proportion of people saving in a pension.

    —  Overall annual pension contributions are estimated to increase by up to around £10 billion a year by 2015.

THE SR2004 EFFICIENCY TARGET

Question 9: The Committee welcomes the information in the Annual Report confirming that the Department's efficiency targets for SR2004 has been achieved. The Committee would be grateful for the following information.

Question 9a: What the most recent customer services performance outturns are for each of the agencies

  Answer 9a: Since the last update provided to the Committee (7 February 2008), both Jobcentre Plus and the Disability and Carers Service (DCS) have published customer satisfaction surveys.

  The DCS survey, conducted in Autumn/Winter 2007, showed that a significant majority of DCS customers are very satisfied with the service they have received (up three points from last year's survey to 59%.) The total percentage of customers satisfied or very satisfied has fallen slightly from 86% to 84%. This is the first time DCS has experienced a drop in customer satisfaction since the first MORI survey was commissioned in 2003. Possible reasons for this drop, such as the high volumes of work DCS was experiencing at the time of the survey, are currently being examined following a review of the survey results by the DCS Executive Management Team and the PDCS Joint Board. Action plans are now being developed to address the survey findings and ensure continuous improvement in customer service.

  The 2007 Jobcentre Plus Customer Satisfaction Survey reported that a significant proportion of customers (80%) were satisfied with the service they received from the organisation. Due to significant changes implemented in the service over the last two years, the methodology and content of the 2007 survey was revised to ensure we continue to seek the most relevant customer feedback. As such, the 2007 results are not directly comparable to results from previous years' surveys. A policy improvement action planning process is underway, via the Jobcentre Plus Customer Experience Key Performance Group, to act on the issues raised in the research.

  The Pension Service are due to publish the results of their most recent Customer Satisfaction Survey this summer.

  In addition to the Customer Satisfaction Survey, Jobcentre Plus commissioned the Policy Research Institute at Leeds Metropolitan University to conduct a separate survey to gauge levels of customers' satisfaction with their first contact when making a new claim to benefit(s). The survey questioned over 2000 customers and the findings have now been published. Overall a significant majority of customers were satisfied with the new claims process, 78% were very or fairly satisfied with the new claims service and 93% very or fairly satisfied with their experience of the telephone call itself.

  Furthermore, in February 2008 the Child Support Agency published a report Child Support Agency client insight research. This research, conducted in Spring 2007, was a significant step forward in seeking to understand and meet expectations of how an efficient child maintenance system should be run. Although the research showed areas of dissatisfaction, the timing of the survey meant that many clients had not yet benefited from improvements to their areas of concern, including complaints handling, telephony, enforcement and time taken to process applications, which we had already begun to address under the Operational Improvement Plan. These findings will enable the new Commission to learn from past experiences of the Agency.

  The Department continues to supplement customer surveys with further activities to better understand our customers and their experience of our services. In addition to the mystery shopping programme, the Department has recently conducted research to understand what matters most to its customers in terms of receiving a quality service. The results of this work will be used to inform the development of customer service measures. This research is due for publication later this year.

  The Department is keen to use the lessons learned from the Independent Case Examiner (ICE) to inform customer service improvements. To that effect, responsibility for the ICE Office has recently moved to the Customer Insight function and forms a key part of the Departmental Executive Team's Customer Champion's remit. The ICE meets quarterly with the Customer Insight Director as well as senior officials from the Department's agencies to discuss findings and seek opportunities for improving the customer experience.

Question 9b: whether the Department's estimated 11% productivity increase by March 2008 was achieved

  Answer 9b: By March 2007, DWP productivity had been increased by around 6%. We estimated[1] that by the end of March 2008 it would have increased by a further 5%, taking the total increase for SR2004 to around 11%.

  Final data is not yet available. There is a six-month lag to availability of Job Outcome data and financial accounts for the year 2007-2008 have still to be completed and audited.

  A revised, but not final, estimate of the productivity increase achieved by the Department in SR2004 will be available at the end of July 2008. This is expected to be very similar to our previous estimate.

  A final assessment of the productivity increase achieved over SR2004 will be made in time for the final Efficiency Programme report at the end of October 2008.

Question 9c: who validates the Department's productivity improvements? and

  Answer 9c: The Department's work on productivity measurement has been developed with the Office for National Statistics (ONS) following Atkinson Review principles. Productivity figures have been published for public scrutiny.

  On 26 June 2008, ONS published their own independent analysis showing more than a 20% increase in social security administration productivity increases between 2002 and 2007. The large majority of this measure is attributable to DWP and it accounts for around two-thirds of that part of the Department's administrative expenditure that is counted as relevant for productivity purposes.

  The ONS measure corroborates our assessment of the Department's productivity increase.

  Processes for calculating SR2004 productivity increases have been given "substantial assurance" by internal auditors (Risk Assurance Division). We will be arranging for RAD to scrutinise our final assessment of the productivity increase achieved in SR2004.

Question 9d: when the National Audit Office will validate the Department's final outturn on the SR2004 Efficiency Programme?

  Answer 9d: The Department's final outturn of SR2004 Efficiency gains will be validated in accordance with HM Treasury published measurement guidance. The Department is unaware of any current National Audit Office plans to conduct further studies of the Spending Review 2004 programme.

PLANNED EXPENDITURE

Question 10: Figure 28 states that the Employment and Support Allowance IT project is due to be completed by October 2008 but that expenditure to date is just £89 million compared to a budget of £295 million. Why has only one third of the budget been committed to date and is the project still on target to meet its October completion date?

  Answer 10: The Employment and Support Allowance Project has a budget of £295 million. The funding requirement was identified and allocated in 2006 to fund the whole delivery of the new Allowance, including the systems and processes needed for this IT enabled project.

  The nature of this type of Project means that contracts with system providers must be signed and a commitment made by both sides. This way of working allows the Project to identify the funding requirements at each stage of delivery. The Department can, therefore, confirm that all of the £295 million has been committed to be spent on the full range of systems and processes needed to successfully deliver Employment and Support Allowance.

  The actual expenditure incurred in each period is determined by the make-up of the contracts signed and the work which has been achieved and, therefore, warrants payment. The £89 million expenditure shown in the Departmental Report covers the early stages of the project before major IT (and other) costs were planned.

  Of the £295 million funding a total of £143 million has been spent to date (end May 2008). This is made up of £11 million in 2006-2007, £97 million in 2007-2008 and £35 million in April and May of 2008-2009. This represents 48% of the total budget.

  A further £90 million (30%) is committed to be spent between June and October when the programme has maximum activity taking place, and the remaining £62 million is committed to be spent between October 2008 and October 2009.

  The Project remains on target to meet the October 2008 delivery date and we will be happy to discuss progress in detail with the Committee when they take oral evidence on Employment and Support Allowance on 2 July.

Question 11: Figure 30 shows that expenditure on management consultancy increased by 50% in 2006-2007

Question 11 a: Why did expenditure in this area increase so sharply in 2006-2007?

  Answer 11a: The level of expenditure on consultancy in 2006-2007 reflects our high, but now reducing, requirement for external expertise to support our modernisation programmes, particularly to introduce new IT systems. A significant part of the Department's agenda is to develop joined-up systems, processes and IT. DWP's modernisation programme is one of the largest programmes of its kind in Europe and will have a significant impact on the lives of all our 26 million customers.

Question 11 b: What Department initiatives the 2006-2007 expenditure supported?

  Answer 11b: We faced short-term but high-level requirements to support:

    —  integrating and adapting the business processes and systems inherited from our predecessor organisations; and

    —  designing, developing and implementing major modernisation programmes, principally modernising our IT infrastructure, implementing Pensions Credit, supporting our Pensions Transformation, Finance Transformation and Procurement Modernisation.

  From 2004-2005 we conducted major programmes to transform our IT sourcing and finance capabilities. The IT transformation programme completed in 2006-2007 and aimed to enable the delivery of the world class IT systems the Department needs to deliver its efficiency commitments and improved levels of customer service. Central to this was the development and implementation of a new operating model reflecting industry best practice, restructured with a smaller, more highly skilled and professional workforce to boost the Department's overall IT capability. Our Finance Transformation Programme completed in September 2006, this covered the Department's finance and procurement functions and introduced the largest IT based resource management system in Europe—based on the Oracle Financials software package.

  These consultancy costs were principally met from specifically allocated modernisation funds and not from normal running cost allocations.

Question 11c: What is the current estimate for management consultancy expenditure in 2007-2008?

  Answer 11c: £76.43 million.

Question 12: Table 5 shows that while administration expenditure on pensioners and disability is expected to reduce across the next spending review period by 12 and 17% respectively, administration expenditure on corporate and shared services is expected to increase. Why is administration expenditure on central service functions expected to increase while administration expenditure supporting front line services is declining?

  Answer 12: Table 5 shows administration costs only. Tables 1 and 2 both show the full resource position, including both administration costs and programme costs. In addition, there was a Machinery of Government change transferring Directgov into the Department from April 2008. The following table clarifies the position:
2007-2008 £m 2008-2009 £m2009-2010 £m 2010-2011 £m
Table 5—administration costs 862969952 874
Efficiency Challenge Fund (programme)158   66108  61
National Insurance Fund Receipt (programme) (287)(271)(269) (261)
Table 1—total resource733 764791674
Directgov  30   30  30
Comparative figures733 734761644


  This shows a planned reduction of 12% over the period, which compares favourably with other parts of the department.

Question 13: Table 5 shows that administration expenditure on children is set to decline from £529 million in 2007-2008 to £374 million in 2009-2010 but then increase again in 2010-2011 to £481 million. Why is expenditure on children expected to increase in 2010-2011?

  Answer 13: Expenditure on children relates to The Child Support Agency and the new Child Maintenance and Enforcement Commission. The Department intends to draw on additional funding to support establishing the new Commission and continue with the Child Maintenance Reform Programme. The total funding assumption for children is:
2007-2008 £m2008-2009 £m 2009-2010 £m2010-2011 £m
Per Table 5529430 374481
Additional Funding159 133  36
Per 3 Year Plan589 507517


  The additional funding sources are identified in the Department's three year plan and total £1,017 million over the SR07 period. This includes the Modernisation Fund and stock of End Year Flexibility. Access to this funding is by agreement with HM Treasury and funds will not be drawn unless required. This ensures the department maintains effective financial control of all of its resources. The Department will use the Supplementary Estimate process to ensure it draws down sufficient funding to meet its commitments as they arise.

Question 14: Table 6 shows that staff supporting children will decline from 10,286 in 2007-2008 to 2,371 in 2008-09. Footnote 9 indicates that the decline is due to staff transferring to the Child Maintenance and Enforcement Commission. Will the staff reduction of 12,000 published in the three year business plan include the staff transferring to the Child Maintenance and Enforcement Commission?

  Answer 14: No. The staff reduction of 12,000 shown does not include Child Support Agency staff who will transfer to Child Maintenance and Enforcement Commission later this year. It is expected that around 9,500 staff will be transferred to the Commission.

Question 15: Will the staff reduction of 12,000 published in the three year business plan include staff who will transfer to the private sector under the Department's Commissioning Strategy? What is your current estimate of the number of staff who will transfer to private sector providers?

  Answer 15: The staff savings for Jobcentre Plus as published in our 3 year plan and in the Departmental plan do not include any staff savings as a result of transfers of work out of Jobcentre Plus to the private sector. The Commissioning Strategy describes the approach the Department will take with contracted providers once a decision has been taken to commission a particular service externally. It is designed to ensure that the provision it buys delivers the outcomes it needs and value for money. The Government has set out its plans to modernise employment support for Jobseekers from 2009, and the procurement process for flexible New Deal is underway.

  Jobcentre Plus decided that none of their staff will be compulsorily transferred to providers delivering the new programme from October 2009 onwards. This was because although some of their existing work would move to providers it is only one of a number of welfare reform changes taking place. Other changes mean that Jobcentre Plus will need more advisers.

Question 16: Table 6 has not included a breakdown of staff in the Information Technology Service Agency. Why was this information not been included in the table? The Committee would be grateful for the staff breakdown if this is available.

  Answer 16: The historic staff numbers in the Departmental Report go back to 2001-2002. The Information Technology Services Agency ceased to exist in October 2000. The ITSA heading should therefore have been deleted from Table 6 this year, and we apologise for the oversight.

June 2008







1   An analysis of the productivity of the Department for Work and Pensions, published February 2008. Back


 
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