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
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 £m | 2009-2010 £m
| 2010-2011 £m |
| Table 5—administration costs |
862 | 969 | 952
| 874 |
| Efficiency Challenge Fund (programme) | 158
| 66 | 108 | 61
|
| National Insurance Fund Receipt (programme)
| (287) | (271) | (269)
| (261) |
| Table 1—total resource | 733
| 764 | 791 | 674
|
| Directgov | | 30
| 30 | 30 |
| Comparative figures | 733 |
734 | 761 | 644
|
| |
| | |
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 £m | 2008-2009 £m
| 2009-2010 £m | 2010-2011 £m
|
| Per Table 5 | 529 | 430
| 374 | 481 |
| Additional Funding | | 159
| 133 | 36 |
| Per 3 Year Plan | | 589
| 507 | 517 |
| |
| | |
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
| 
