The Incapacity Benefit system

Extract from the debate in the House of Commons on Tuesday 16 May 2006:

Mr. David Ruffley (Bury St. Edmunds) (Con): Welcome to you on this fine morning, Mr. Olner, and welcome also the Minister, for whom I have a great regard. I want to say on the record for all those who will read this debate that I see it as part of my job as shadow welfare reform Minister to work co-operatively with him.

Welfare to work is a key part of social justice, which is an objective that I believe all politicians of good will sign up to. We may differ on the means but not the objective, and I am sure that everyone reading this debate will want my party to work co-operatively with the Government and the Liberal Democrats to take politics out of the issue as much as is humanly possible during debates on the Bill and beyond. I congratulate the hon. Member for Nottingham, North (Mr. Allen) on another typically insightful parliamentary contribution.

The debate is timely, as the introduction of a Bill to implement parts of the Green Paper and the city strategy is a key part of the Secretary of State’s agenda. We do not know much about the city strategy models. Co-operative inter-agency work has been done in Edinburgh, Glasgow and Manchester, but the strategies are very much in their infancy. The Opposition believe in more localism and, as the hon. Gentleman mentioned, decentralisation, but we must ensure that councils and the public sector take the role of enabling authorities and do not seek to micro-manage.

The right noises are being made on page 10 of the Green Paper about how co-operation should work. It states that employers should be involved and that budgets should be pooled to simplify funding streams so that they are more accessible and comprehensible to claimants. We welcome the idea of fewer and simplified targets. Let us hope that the learning accounts are not individual learning accounts, as that model sounded good in theory but did not work too well in practice. Much detail needs to be chewed over, and I urge the Minister—as if he does not already know this—to understand that the devil lies in the detail, as the hon. Member for Nottingham, North said.

There is a discussion on page 18 of the Green Paper about vacancy rates in the cities with some of the highest proportions of incapacity benefit claimants. There is a reference to the 100 MPs to whom the Secretary of State wrote in January. The Green Paper states:

“However, many residents of cities do not take up these jobs even though they live within easy travelling distance of thousands of vacancies.”

It would be extremely useful to have more detail when we debate this matter in the coming weeks and months. Can the Minister publish evidence to support that proposition, that there are literally thousands of vacancies in those cities? Those inner cities are some of the most depressing, sad and demoralising blackspots for people who feel that they are trapped on incapacity benefit. We need to help them, but we can do that only if we have more analysis, and in particular supporting evidence for that proposition in the Green Paper.

Mr. Allen: The hon. Gentleman has highlighted a phenomenon that I experience often in Nottingham, which is that people do not wish to move off their estate, whether for education or employment. One way to tackle that is to make provision on the estate for further education or other aspects of learning. Once those people are turned on to education and realise that they can get a job, they cannot be stopped from applying for further education or the vacancies that the hon. Gentleman mentioned. We must provide a trigger point in the locality for those people and then let them make the best of it themselves. I hope that that will become evident as we develop our city strategy.

Mr. Ruffley: I am grateful to the hon. Gentleman and hope that he is right. However, we need more evidence for the proposition that there are thousands of accessible vacancies in those cities. Perhaps the means that he outlined—I trust that he is right—is the way for people to access such vacancies, but discovering the distribution of vacancies among cities would be a starting point, and it is necessary before we can discover whether that is a true proposition.

Mr. Ian Davidson (Glasgow, South-West) (Lab/Co-op): Speaking as a Glasgow Member, it is undoubtedly the case that thousands of vacancies are available in Glasgow, and thousands of people are on invalidity benefits. One of the reasons why there has been such a take-up of jobs by the influx of eastern Europeans is that most of those unemployed or on benefits are essentially unemployable and no reasonable employer would take them on in their existing situation. Given a choice between a highly skilled and motivated eastern European and someone trying to return to the labour market who may have addiction problems and has been unemployed for 10 years or so, the latter would be found to be simply not job-ready. They cannot compete in such circumstances, and background help and assistance is necessary. A simple juxtaposition of vacancies and individuals is insufficient.

Mr. Ruffley: That is an important point, which is why I call for the Minister to publish some statistics. As the hon. Gentleman pointed out, the question is not quite as easy as it looks. If it were, many more people would be getting on buses, and going from one side of Glasgow, Edinburgh or Manchester to the other, and we would not face this problem. I take his point.

In some quarters, such as the third and private sectors, the Green Paper’s proposals have been judged to be rather sketchy. We look forward to seeing detail in the Bill and I urge the Minister to tell us the likely date of its publication, not just for my benefit but for that of the stakeholders outside this place. I shall make it easy for him: can he narrow it down to summer or autumn? A specific month is not necessary.

I want to raise some points that bear on the likely success of the city strategy model, which are applicable to all other means of welfare to work delivery, outside cities. The first is the key role of the voluntary and private sectors. In the Green Paper, we are told of the city strategy model and that

“Each consortium would also be expected to make use of private and voluntary sector providers to deliver additional employment support.”

I shall not rehearse the arguments brilliantly set out in a document from the Oxford Economic Forecasting company prepared for the Employment Related Services Association. In essence, it argues for what the National Audit Office has urged: a complete top-to-bottom change in the letting of welfare to work contracts on the part of Jobcentre Plus.

There is not a level playing field. Private and voluntary sector providers already understand that some of the contracts let to them are of very short duration, which means that they cannot plan and invest for the future by hiring people and buying premises. There are low-value contracts for which it is not worth tendering. Short tendering times and last minute tendering by Jobcentre Plus make it very difficult for the third and private sectors to make proper bids. Quite amazingly, there is sometimes a change in the specifications that a private or voluntary sector provider has to meet after their bid has been accepted.

Those issues must be flagged up because of the ambition that we regularly hear about from Ministers, which I share, to get more private and voluntary sector provision, provided it is as effective as or more effective than the public sector alternative. We are talking not about cost considerations but about what is effective in getting more people back to work more swiftly in more sustainable jobs. The private and voluntary sectors are not getting a fair crack of the whip. The city strategy will work only if we reconsider procurement.

My second concern relates to the target of getting 1 million off benefit within 10 years, and there is obviously a disaggregation of that figure: there will be a target for each city. Of course, that will mean not getting 1 million people into work but getting them off benefit. There is a huge issue here for those of us who grind through the statistics with a great deal of joy in our heart—it is a genuinely fascinating subject. The destination of some of those who come off incapacity benefit will be to return to income support or jobseeker’s allowance, or just to disappear altogether. We should place proper emphasis on getting as many of that 1 million as possible back into work, not just off benefit; they are two radically different things.

I shall not delve into the view of Her Majesty’s Opposition and my views about whether getting 1 million off incapacity benefit by 2016 is too ambitious. The Secretary of State calls it a stretching target, but I wonder about it. I say that for one simple reason. I pray in aid only what the Work and Pensions Committee said in the past couple of weeks, that the

“Department has not met its commitment to produce incapacity benefits caseload forecasts to 2016”

and that it should do so immediately. It also stated that clarification of the baseline by which the aim will be measured is urgently required.

That must be right, because unless we know what the predicted off-flow is, particularly in respect of those over 50 who will reach retirement age between 2006 and 2016, we cannot get a sensible idea of how well the Government are doing in terms of hitting their target.

That brings me to my third concern, which the hon. Member for Nottingham, North will share: how far will the city strategy or any other strategy tackle the problem of existing claimants? That issue needs a good and thorough airing for the following reason. Having been an old Treasury hand pre-1997, I know how to qualify spending commitments and I noted that page 48 of the Green Paper states something about how the needs of the existing stock in pathways to work areas will be catered for:

“As resources allow, we will, over time, consider extending work-focused interviews to existing claimants”.

Three qualifiers in one sentence—“as resources allow”, “over time” and “consider”—is not bad. That bears on what so many of us have pointed out: the £360 million from existing budgets to roll out pathways to work nationally seems a serious underestimate.

Why do we say that? We know that incapacity benefit personal advisers will need upskilling, that there will need to be better training and that there is a shortage of therapists. Professor Layard is probably arguing on the high end of the spectrum when he says that 10,000 cognitive behaviour therapists might be needed to deliver pathways as a high-quality intervention in the condition management programme. Listening to this debate, I wondered whether the consortium in Nottingham will have the ability to tackle what seem to be serious supply-side constraints, be they in physiotherapy or cognitive behaviour therapy.

Employers are important in the area of welfare to work. The Work and Pensions Committee said that employers seem to have been

“largely overlooked in the Green Paper”.

All of us who speak to the stakeholders—the voluntary, private and public sectors— agree with that. No matter how much help and support an incapacity benefit claimant or disabled person may receive, if employers do not change their culture there will be difficulties. They must also change it in respect of statutory sick pay and the 28 weeks for which someone who may still be under contract to a company can take time off work because of illness, be that a mental health condition or otherwise. Employers are not doing enough to intervene and give such people support, because they might have been off sick for six months before they do one day go on incapacity benefit. As we all agree, unless incapacity benefit claimants are helped and supported early in their claim, the chances of their returning to work reduce almost exponentially.

The Minister can help the city strategy model by telling us a bit more about his plans for changing statutory sick pay. What will he do to improve employers’ attitudes when they work in consortiums of the kind that the hon. Member for Nottingham, North outlined? What plans does the Minister have to reform medical certification, which is first encountered by a claimant when they are on statutory sick pay and are going to their local GP? We need to hear more about what the Government intend to do with the new personal capability assessment, which is meant to be about what IB claimants—and those on statutory sick pay who are potential claimants—can do, rather than just focusing on the illness. To do that, we have to understand what the role of employment advisers in doctors’ surgeries will be, not just for individuals on incapacity benefit, but—I stress this—for those on statutory sick pay who are not yet in the benefit system.

The Minister will want to consider all those points. I had a discussion with him before this debate; we decided—well, I did, anyway—that we are men of good will, and that what we were talking about, essentially, is an exercise in improving the legislation in a crucial area of public policy and social justice as much as we can. If some questions raised cannot be answered today, I hope that they will be answered in Committee. I once again thank the hon. Member for Nottingham, North, who has, typically, raised an important issue, and has done so in his own special way.

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