Helping those in financial hardship: the running of the social fund (HC 282-i) Public Accounts Committee 26 Jan 2005

Evidence given by Mr David Anderson, Chief Executive, Jobcentre Plus, Department for Work and Pensions

Q10 Mr. Gerry Steinberg (City of Durham): Regardless of what you say, Mr Anderson, I think this is a very poor report. I have to say that I have never actually ever been impressed with the Social Fund and I have always seen it as a sort of derisory way in which to treat people who are in poverty and crisis. As far back as when it was introduced in the early 1980s and the 1990s, I always felt that it did not meet the needs of the people for whom it was meant and that was the people who were in crisis and were in poverty; it seemed to neglect their needs. My experience at the time clearly showed that as well. The way that I actually saw a crisis and the way that was dealt with by the benefits officers clearly did not reflect, as far as I was concerned, the situation that people were in. Right from the beginning I thought it was a very, very poor system. However, it is with us now and there is nothing we can do about it. I have to say that at the present time I get very few cases from the Social Fund and I put this down either to it being administered much better, there is not so much crisis about because people are actually better off, or people just ignoring it altogether. Which is it?

Mr Anderson: I should like to think that what is happening is that there are fewer people unhappy with the way decisions about crisis loans are made.

Q11 Mr. Gerry Steinberg (City of Durham): I thought you would say that. If you read the report, that is just not a true reflection of the report, is it? Absolutely not. If you read the report, it clearly states in the report that the staff do not understand it, the staff are not trained in it, the staff do not give advice in it, the staff do not know about it themselves, in fact some of the staff do not even know it exists. You are sitting there and saying it is because it is being better administered by staff. That is not what this report says.

Mr Anderson: I think the evidence is that the majority of decisions are correct and that the staff who deal with ---

Q12 Mr. Gerry Steinberg (City of Durham): The majority of decisions are correct? That is not what this report says; far from it. This report says that over 50% of decisions made were wrong.

Mr Anderson: A high proportion of the decisions which go to review are overturned, but that is different from the proportion of decisions which are correct in the first instance. Obviously, the cases that go to review are a sub-set where people have been unhappy with the decision. If we look at table 15 which is on page 26 of the report, which is the one to which Mr Williams just referred to that is about the decision making ---

Q13 Mr. Gerry Steinberg (City of Durham): The report clearly says that 50% of the applications made at job centres to the Benefits Agency which pays them, are wrong. The applications which come in from your own job centres are returned. Right or wrong?

Mr Anderson: I do not believe that is correct.

Q14 Mr. Gerry Steinberg (City of Durham): Let us have a look. Over 50% are returned, only 47% are correct.

Mr Anderson: I do not have the page reference you are talking to, but the statistics sound as though they may be referring to the cases that are reviewed rather than all the cases.

Sir John Bourn: Paragraph 3.10.

Q15 Mr. Gerry Steinberg (City of Durham): I knew I had read it somewhere. "The quality of initial decision-making varies between types of award. 92% of Budgeting Loan initial decisions are correct but only 52% of Crisis Loans and Funeral Payments initial decisions".

Mr Anderson: Yes, and overall the figure ---

Q16 Mr. Gerry Steinberg (City of Durham): That is appalling and you are sitting here defending it, are you not? You are saying it is being administered better now and it is not being administered better, it is being administered no better than it was right at the very beginning.

Mr Anderson: As I just explained to Mr Williams, the statistics on the decision making which are in Table 15, which is on page 26, show that we have difficulty in decision making for crisis loans and funeral payments. The discretionary nature of these decisions means that they are difficult ---

Q17 Mr. Gerry Steinberg (City of Durham): Go to paragraph 2.14. You have said all that before and you are just repeating yourself. If you go to paragraph 2.14, page 18, it tells us here that two people with identical circumstances, at the same time, could go into a different job centre and get different decisions regarding their applications for a community care grant. The system that can do that is therefore, in my view, fundamentally unfair. How can two people be treated totally differently with exactly the same conditions?

Mr Anderson: The way that the community care grant is administered is that the district has an amount of money which is available to it to pay out and the decision makers have to allocate a priority to the cases that they get. Therefore, it is possible that cases of equal priority would receive different ---

Q18 Mr. Gerry Steinberg (City of Durham): How is that fair then? How is it fair if a constituent of mine goes to get a loan and Frank Field's in Liverpool goes, they both have exactly the same conditions, yet one could come out with a different grant from the other; exactly the same circumstances. How is that fair? Is it fair?

Mr Anderson: In those particular cases, if that arose, it would not be fair. That would be very rare indeed, because we make enormous efforts to make sure that the way the budget is allocated for community care grants matches the demand that will arise and it is based on forecasts of the demand for the community care grant which could arise in each district.

Q19 Mr. Gerry Steinberg (City of Durham): So really it depends upon the resources you have.

Mr Anderson: Yes, we try to allocate the resources across districts according to the likely demand.

Q20 Mr. Gerry Steinberg (City of Durham): Well that cannot be a very good system, can it? I want to return now to the report. If you read the report, it makes it quite clear that the vast majority of the staff in the benefits offices and the job centres do not understand the system. So presumably they cannot answer questions. How can the system work when the staff themselves do not understand the system?

Mr Anderson: The report does identify some shortfall in knowledge of staff and we are working very hard to improve that. We take a lot of action ---

Q21 Mr. Gerry Steinberg (City of Durham): How long has the scheme been going?

Mr Anderson: The Fund has been going a long time, as you point out.

Q22 Mr. Gerry Steinberg (City of Durham): About 15 years. It is taking a very long time to do a bit of training. On the other hand I also read in the report, if I remember rightly, that there is no training anywhere. There is no official training. Am I right?

Mr Anderson: No, that is not correct.

Q23 Mr. Gerry Steinberg (City of Durham): Well it says so in the report.

Mr Anderson: The training has not been updated nationally since 2002. Training is done on a local basis, training is presented on a local basis and bulletins have been issued to update the training which is available to make sure that it is accurate. So there is training and it is available to people. We are trying to address the issue that you recognise, which I accept needs improvement, by the introduction of a standard operating model across the country, which will increase the size of the processing units. We are doing this work in 140 places; we are going to do it in 20 places. That will allow us to have more people with better knowledge and should improve the decision making.

Q24 Mr. Gerry Steinberg (City of Durham): Twenty years ago, 17 or 18 years ago, when I first became a member of parliament, the attitude at the benefit office was never to give advice; if the person did not ask a question, then they did not pre-empt it: "Just tell them what they ask and if they do not ask, do not tell them". Now that was the attitude of benefit offices throughout the country 15 to 16 years ago. I hope it has changed, I hope the philosophy behind that has all changed now, the culture has changed, but when I read this report, I do not believe it has. I do not believe that the staff give advice, I do not believe that the staff guide the people in the right direction and I do not believe that the staff tell them what they are entitled to and what they can claim. I do not believe they do it out of vindictiveness; I think they do it because they do not know themselves. How accurate is that?

Mr Anderson: Since the beginning of this year, our customer service target has included a particular reference to proactivity and that is now measured as part of our regular service monitoring. We are improving our performance on that measure as we go through the year. Previously, as you rightly say, there was not a measurement of proactivity in the service measures, so we have recognised the problem you address. It is also fair to recognise that there has been significant change in the Benefits Agency since it merged with the Employment Service and the amount of training that people have had to adapt to new processes, new ways of working is enormous. The priority that is focused specifically on the Social Fund in that area has to be viewed in a line with the priority for everything else.

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Q88 Mr. Gerry Steinberg (City of Durham): I just want to sum up where I was going because I did not actually have the opportunity to get there. I was previously given statistics and I have been very selective about the statistics that I have used from the report. Mr Sheridan touched on this. 47% of people on low incomes do not know the Fund exists, 50% of applications from job centres are rejected, 50% of the community care grant decisions, 41% of crisis loan decisions are overturned on review. Tell me, why do only 47% know about it, why are 50% of applications from job centres rejected and why are 50% and 41% of crisis loan decisions overturned on review?

Mr Anderson: I think they are three very different questions there. On the overall awareness of the Fund, obviously the vast majority of parts of the Fund are only available to people who are benefit claimants. I think the awareness amongst benefit claimants would be significantly higher and we notify people in various ways who are benefit claimants. Crisis loans are available to all people on low incomes, some of whom clearly are not benefit claimants and we need, for example, to improve the information that we give to people on tax credits or who do not receive any support and try to make that more available.

Q89 Mr. Gerry Steinberg (City of Durham): You are waffling, are you not? 50% of the people who are entitled to this Fund do not even know it exists. That has to be a failure of your department.

Mr Anderson: We have a dilemma in the fact that the Fund is limited in the amount of money that we have.

Q90 Mr. Gerry Steinberg (City of Durham): So you do not tell people about it.

Mr Anderson: We currently use all the money to meet the demand that we have.

Q91 Mr Williams: Rather than repeating the questions we have already had, you have already undertaken to give us a note on what you are doing at the moment to increase the awareness.

Mr Anderson: Yes.

Q92 Mr. Gerry Steinberg (City of Durham): So why are 50% of applications from the job centres rejected?

Mr Anderson: I do not recognise that statistic, I am sorry Mr Steinberg. Can you tell me which aspect of the report that is from?

Q93 Mr. Gerry Steinberg (City of Durham): I read it in the report; I would not take it from thin air but I cannot remember exactly where I read it.

Mr Lonsdale: It is in paragraph 4.12.

Mr. Gerry Steinberg (City of Durham): I read the report while I was watching the football match on Sunday afternoon, which is perhaps the reason why I did not write down the exact paragraph. "Districts told us that they return up to 50% of the applications received from jobcentres for this reason." What is the particular reason? It is because they are inefficient, are they not? They have given insufficient information. It is as simple as that: administrative errors.

Q94 Mr Williams: Could we have the answer to one question before we lose sight of what the question was?

Mr Anderson: This is referring to crisis loan applications and crisis loans are obviously being dealt with in a hurry. Very often the person taking the information from the person giving the crisis loan may not have access to all the information that is required by the form, but may submit the form out of the desire for speed to try to make sure that the payment gets to the person on the same day.

Q95 Mr. Gerry Steinberg (City of Durham): Finally, why is the appeal upheld for 50% of people who go to appeal? Because you made the wrong decision in the first place.

Mr Anderson: Because the decisions under this Fund are discretionary and it is very difficult to have a clear-cut decision where there is so much discretion in the hands of the decision maker. Very often people who are going to appeal or to the review service provide more information at that point than they did when the original decision maker looked at the case. Therefore, very often the outturn is different.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.