Twenty-eighth
Report
Report on the Oral Evidence Session with
RT HON Chris Grayling Mp, Minister for Employment, Department
for work and Pensions, regarding recent DWP STATUTORY INSTRUMENTS
1. In our 27 previous reports this session, 7
DWP instruments have featured as major items: frequently for failing
to provide an adequate explanation of the policy intention or
to provide evidence that the regulations will work as intended.
2. In reviewing recent DWP regulations, as well
as the immediate information requirements for good parliamentary
scrutiny, we had in mind the long-standing principles of good
regulation promulgated by the Better Regulation Executive in BIS,
which state that any regulation should be:
- Transparent
- Accountable
- Proportionate
- Consistent and
- Targeted - only at cases where action is needed.[1]
3. These are criteria that successive governments
have endorsed and with which all regulations are supposed to comply.
However, the Committee has found that a number of recent DWP regulations
have not provided sufficient evidence to meet the standards expected,
and the Merits Committee therefore asked the Minister for Employment,
the Rt Hon Chris Grayling MP, to give evidence and fill in some
of the gaps.[2] We thank
the Minister for his assistance. Much of the meeting was taken
up with discussion of a new Mandatory Work Activity Scheme for
certain individuals on Jobseeker's Allowance, introduced by SI
2011/688 and reported by the Committee in its 27th report (HL
Paper 126).
Transparent
4. In its 27th report the Committee noted that
the purpose of the Mandatory Work Activity Scheme was not stated
consistently, veering between "work related activity with
a view to assisting the customer to improve their prospects of
obtaining employment"; and "a mandatory programme in
order to reorient their [claimants'] mindset"[3]
- which a number of commentators had perceived as a punitive regime.[4]
5. When the Committee asked Mr Grayling to clarify
the aim of the Mandatory Work Activity Scheme he said that its
origins lay in the grassroots desire of Jobcentre staff to have
a tool to deal with claimants who had become detached from the
working environment (Q 2). Still uncertain about the purpose of
the scheme, the Committee asked for examples of what those nominated
might be asked to do, and what skills they might gain from the
activity. The Minister suggested that activities might include
working in a charity shop or with a conservation group (QQ 3-4).
Despite these suggestions, the Committee remains unclear about
the full range of activities to which people might be assigned,
and how quality of content will be assured, particularly given
that a very wide degree of local variation is integral to the
scheme.
Accountable
6. The Committee was also concerned about how
the scheme was to be assessed as to whether it represented value
for money. In evidence the Minster said the budget would initially
be £8m (including the costs of evaluation) (QQ 22-23). Because
of the range of activities being considered no per capita spend
or unit cost information is currently available. After the evidence
session, DWP responded to a question about the possible 'offset'
savings from this scheme:
"We have not explicitly estimated savings from
Mandatory Work Activity however evidence to support the impact
of mandatory activity on the likelihood of jobseekers finding
employment is provided the Intensive Activity Period (IAP) stage
of New Deal 25+ (ND25+) becoming mandatory for jobseekers aged
25 to 49 from April 2010 and a pilot making the IAP stage of ND25+
mandatory for jobseekers aged 50 years and over.
The evaluation of IAP found that putting customers
onto a mandatory programme increased jobseekers time off benefit
by 34 days. If MWA had a similar impact then we would expect to
generate £1.30 of savings for the Exchequer for every £1
spent. This includes both AME (benefit) and fiscal savings."
7. As is their frequent practice DWP, despite
the degree of political and media attention attracted by many
of their initiatives, did not provide a formal Impact Assessment
with the Mandatory Work Activity Scheme, nor even basic information
on its financial costs and benefits. The Minister justified this
on the grounds that the initial scope of the scheme was such that
its impact would be limited (Q 31). However, the Regulations have
been drawn up so that the DWP do not need to return to Parliament
in order to expand the scheme - they can simply make the changes
administratively. Therefore the time for DWP to have assessed
the likely impact of their scheme, and to have presented detailed
information to Parliament to help it to perform its essential
scrutiny function, was when these Regulations were laid before
Parliament.
8. The EM states that the scheme is intended
"to assist the customer to improve their prospects of obtaining
employment" but sets no definition of how success is to be
measured. The plans for monitoring and review set out in paragraph
12 of the EM are sketchy, simply saying that there would be "an
assessment of the impact of mandatory work activity on employment
and benefit outcomes, subject to identification of suitable comparison
group". This is mentioned as part of a wider review of the
pre-Work programme, and the Committee is not clear how the specific
impacts of this scheme will be separately identified. Furthermore,
unlike the Work For Your Benefit Scheme proposed at the end of
the last government, this is not a structured pilot, but a variety
of provision that will be designed differently in different areas,
with no control group identified as part of the scheme's design
(QQ 20-21).
9. It seems poor practice that the Department
should have almost concluded the tender process without having
thought through the evaluation criteria for the scheme. In particular
the Committee is concerned that without an Impact Assessment there
is no defined benchmark against which the outcome, whatever it
is, can be measured. The Committee has in the past commented that
DWP has seemed to confuse activity with effectiveness:[5]
robust data is the best defence against that accusation.
10. The Minister said that DWP "will track
and evaluate on the basis of the propensity to be in work or otherwise.
We have plenty of comparators to use within our existing databases"
(Q 30) - yet the Department chose not to publish more specific
detail in the EM. This is a theme that we have come back to more
than once with DWP instruments in this policy area. When the Committee
took evidence from a previous DWP Minister in January 2010 on
the draft Jobseeker's Allowance (Skills Training Conditionality
Pilot) Regulations[6],
which show a number of similarities with the current proposal,
we stated:
"In our report on the original Flexible New
Deal Regulations (2009/480) we commented on the lack of a clear
plan for evaluation and the lack of baseline information against
which progress could be tested. The EM to the Skills Conditionality
Regulations is equally vague about how progress is to be assessed..."
11. The Social Security Advisory Committee (SSAC)
has expressed concerns about whether "workfare" and
mandatory activity is effective in helping people to find jobs,
particularly during periods of high unemployment, and has cited
studies which call this into question.[7]
It would have provided a degree of reassurance if the Department
had outlined more specific plans for an early evaluation of outcomes,
and it is disappointing that DWP did not choose to do this.
Proportionate and targeted
12. The Committee was also surprised that no
clear estimate was given of the number of places required. The
Minister said that 10,000 places had been commissioned initially
and that this was expected to increase (Q 17). When asked if there
was a potential for waste from places not being filled, the Minister
said he thought it unlikely as the frontline staff themselves
had recommended the scheme (Q 19). Beyond this, the Committee
has not been made aware of any rigorous assessment by the Department
of the scale of need for the Mandatory Work Activity Scheme.
13. The targeting of the Mandatory Work Activity
Scheme is to be left almost entirely to the discretion of Jobcentre
Advisers, and the Minister is sanguine that there will be local
variation and a lack of consistency in the way that the Advisers
apply their judgment (Q 7). The Minister said he did not envisage
the Mandatory Work Scheme targeting those people moving off ESA
or Incapacity Benefit, but rather being aimed at the conventional
claimant on Jobseeker's Allowance (Q 12). However, the Regulations
before the Committee would allow such people to be caught by the
Scheme; the guidance for Advisers is not published; and the Advisers
will have very significant discretion, so it is impossible to
be sure that this will be the case.
Consistent
14. The selection criteria for candidates for
the Mandatory Work Activity Scheme are not in the Regulations
but will be given in intranet guidance to Jobcentre Advisers.
This guidance is not available for Parliamentary scrutiny now
and can be changed without any further consideration by Parliament.
We asked the Minster to justify DWP taking this degree of flexibility.
The Minister said that the degree of flexibility was in reaction
to previous prescription from the centre that simply had not worked,
that local teams had to have the flexibility to meet local circumstances,
and that "we have to trust the professionals. We have to
make sure they are well trained, but we have to trust their judgment"
(Q 6). While the Committee has some sympathy for the Minister's
concern that staff should be able to respond to local conditions,
this needs to be offset by clear accountability. We were not clear
how local practice would be monitored to prevent unjustified inconsistency,
and the Minister seemed unworried by the potential for an increase
in tribunal cases from claimants alleging unequal treatment (Q
7).
15. The Committee recently considered changes
to the Work Capability Assessment in the Employment and Support
Allowance.[8] Although
DWP has assured the Committee that its staff are fully trained
and briefed, external information challenges this: in its 23rd
report (HL Paper 105), the Committee noted that 40% of appeals
against the ESA Work Capability Assessment are upheld; and, last
week, the Commons Justice Select Committee deplored the drain
on legal aid from the volume of DWP tribunal cases - of which
34% (23,100 cases) were successful in Quarter 2 2010-11.[9]
The Committee suggests that the high proportion of Jobcentre Advisers'
decisions currently overturned by tribunals might indicate the
need to restrict Advisers' discretion, rather than increase it.
16. In mitigation, the Committee did note that,
when handling disputes arising from people directed to work-related
activity or the Jobseeker's Allowance as a result of a Work Capability
Assessment, a Jobcentre Adviser was working at a significant disadvantage.
This is because a tribunal has access to the claimant's medical
information, but the Adviser does not, thus making variation in
some decisions almost inevitable. The Minister acknowledged these
difficulties but said that the Department was changing its approach
and requiring the Decision-makers, who are discrete DWP staff
who form the first stage of the appeal system, to look at a broader
range of evidence when reviewing the Adviser's decision. This
made him confident that the number of decisions overturned at
tribunal would be significantly reduced (QQ 14-15). While this
should mean that disputed recommendations will in future be resolved
more quickly, this does not address the concern that the Adviser's
initial decision to require someone to undertake a work-related
activity may be ill-informed and the claimant may receive a benefit
sanction in consequence.
The right information at the right time
17. DWP can set its own legislative timetable,
but several times recently the Department has laid regulations
that external commentators described as premature.[10]
The Mandatory Work Activity Scheme came before us with no practical
information on how candidates would be selected, nor any real
indication of what the schemes would involve. This is a vague
and insubstantial basis on which to expect the Committee to assess
whether the regulations will achieve their objective - and it
appears that more precise information will not be available for
some time.
18. In its Explanatory Memoranda the DWP too
often fails to explain the rationale for its decisions. For example,
the Social Fund Maternity Grant Regulations lacked any adequate
explanation of why the proposed solution was chosen over two apparently
similar ones. Memoranda frequently claim that there is no impact
from the legislation proposed on the voluntary sector, but we
are aware of the cumulative burden that it imposes on organisations
like Citizens' Advice or charities helping the disadvantaged -
and we would wish the Department properly to explain the basis
for this assumption.
19. We have therefore asked the DWP Minster to
make certain that, in future, regulations from his Department
include in the Explanatory Memorandum or Impact Assessment all
the necessary information, baseline data and explanation of assumptions
to facilitate proper scrutiny of the proposal both by this Committee
and by the House (QQ 25-29). The Committee intends to keep the
situation under review.
1 http://www.bis.gov.uk/policies/better-regulation
Back
2
The meeting took place on Tuesday 5 April 2011. The transcript
of the oral evidence session is available here:
http://www.parliament.uk/business/committees/committees-a-z/lords-select/merits-of-statutory-instruments-committee/publications/
A webcast of the meeting is available
here:
http://www.parliamentlive.tv/Main/Player.aspx?meetingId=8176 Back
3
Quotes from paragraph 2 of the Explanatory Memorandum to the MWAS
Regulations, and paragraph 2.2 of the Departmental memorandum
to the Social Security Advisory Committee (SSAC) respectively Back
4
See for example the report by the SSAC published with the instrument:
http://www.official-documents.gov.uk/document/other/9780108510403/9780108510403.asp
Back
5
5th Report of Session 2009-10, HL Paper 32, para 34 Back
6
5th Report of Session 2009-10, HL Paper 32, made as SI 2010/696 Back
7
SSAC report on SI 2011/688, paragraph 4.2. Back
8
Employment and Support Allowance (Limited capability for Work
and Limited Capability for Work Activity) (Amendment) Regulations
(SI 2011/228); 23rd Report of this Session, HL Paper 105 Back
9
House of Commons Justice Committee, Government's
proposed reform of legal aid, 3rd report (HC 681-I), chapter
4 Back
10
For example the Social Security Maternity Grant (see our 20th
Report of this Session, HL Paper 95) or the amendments to the
Work Capability Assessment (see our 23rd Report of this Session,
HL Paper 105) Back
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