UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 977

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

WORK AND PENSIONS COMMITTEE

 

 

DWP DEPARTMENTAL ANNUAL REPORT 2009

 

 

Wednesday 14 October 2009

RT HON YVETTE COOPER MP and SIR LEIGH LEWIS KCB

Evidence heard in Public Questions 1 - 81

 

 

USE OF THE TRANSCRIPT

1.	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, and copies have been made available by the Vote Office for the use of Members and others.
2.	Any public use of, or reference to, the contents should make clear that neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.
3.	Members who receive this for the purpose of correcting questions addressed by them to witnesses are asked to send corrections to the Committee Assistant.
4.	Prospective witnesses may receive this in preparation for any written or oral evidence they may in due course give to the Committee.
5.	Transcribed by the Official Shorthand Writers to the Houses of Parliament: W B Gurney & Sons LLP, Hope House, 45 Great Peter Street, London, SW1P 3LT Telephone Number: 020 7233 1935

Oral Evidence

Taken before the Work and Pensions Committee

on Wednesday 14 October 2009

Members present

Mr Terry Rooney, in the Chair

Miss Anne Begg

Harry Cohen

Mr Mark Harper

Mr Oliver Heald

Mrs Joan Humble

Tom Levitt

Greg Mulholland

Jenny Willott

________________

Witnesses: Rt Hon Yvette Cooper MP, Secretary of State, and Sir Leigh Lewis KCB, Permanent Secretary, Department for Work and Pensions, gave evidence.

Q1 Chairman: Good morning, everybody. Welcome to this Committee's review of the Departmental Annual Report 2009. Secretary of State, you are welcome to the proceedings of the Committee and congratulations from the Committee on your appointment, and welcome to the old man. If I can kick off, obviously the topic is unemployment. What is the department's current estimate for when it might start falling?

Yvette Cooper: Just before we start can I say that I have also sent a letter, Chairman, to the Committee this morning which provides some additional information, particularly on unemployment. I know that the Committee have had some informal discussions with our officials about what we think is happening in the labour market and I thought it might be useful for the Committee to have something formally which sets out some of the information which I think you were shown informally and also some of the analysis which shows the differences between what has been happening in this recession compared to previous recessions, ways in which the labour market may have changed, and also because we are publishing today some information about some of the employment programmes, including the six-month offer, and some supplementary information about some of the other employment programmes, such as the Local Employment Partnership. I can talk you through any of those points if you are interested but otherwise you should be receiving that letter which should have been sent to you first thing this morning.

Q2 Chairman: As we go along there will be questions on all of those.

Yvette Cooper: We do not forecast unemployment.

Q3 Chairman: We get that mantra all the time.

Yvette Cooper: I think it is genuinely also hard to predict even for people who do do forecasts of what is happening to unemployment because the labour market has clearly changed significantly compared to what happened in the early nineties. The unemployment figures out today show, on the ILO count this morning, that there has been a much lower fall. It is still 2.74 million but the increase has been much lower; it is 88,000, which is lower than it has been in previous quarters. The claimant count obviously has continued to increase but, in terms of the differences that may be taking place compared to previous recessions, it may be that the traditional lag that everybody has always talked about between what happens to growth and what happens to unemployment may be narrowing and so that would make it even harder to predict than it normally is exactly what will happen to unemployment over the coming months.

Q4 Chairman: I understand the mantra but you do do desk work, for want of a better word, particularly in terms of your own labour force planning, so when do you envisage the peak will be?

Yvette Cooper: We genuinely do not do a forecast of when we think the peak will be.

Q5 Chairman: I am not asking for a forecast but there must be a working assumption just for your own labour force planning purposes.

Yvette Cooper: I genuinely think it is very hard to tell this time because, as I said, the Chancellor's forecast was that the economy will start to grow before the end of the year. In previous recessions unemployment has continued to grow even once the economy is growing, but, for a series of reasons, partly because people have been kept closer to the labour market this time and we have had a stronger Jobseeker's regime, and partly because businesses seem to be behaving in a different way, it does look as if the economy is operating in a different way compared to the early nineties. That may mean that there is a shorter gap between the economy starting to grow and unemployment starting to come down. However, it is genuinely very difficult for any economist to predict and for any economists who are operating with models. We do not do that kind of detailed economic forecasting and those sorts of formal proposals. I do not know if Leigh wants to add anything to that.

Sir Leigh Lewis: Only that in terms of the operational requirements of the department in forecasting staffing needs, we tend to take, of course, the unemployment assumption that the Treasury use at the time of each PBR and Budget and use that, and then we look at actual operational data, the number of claims being made and so on.

Q6 Chairman: I could say that most of the additional staff you have taken on have been on fixed term contracts, so that presumably is when unemployment starts falling, at the end of that fixed contract period.

Sir Leigh Lewis: I think that is simply a wise way of running the department, but taking on people on fixed term contracts means that we have flexibility at the end of that period to review what is then happening in the labour market.

Q7 Chairman: Yes; I think we should move on. The department has been given £4.5 billion extra funding to cope with the recession and for various programmes, some of which you have just mentioned. How will the £1.6 billion being spent this year be allocated between these programmes?

Yvette Cooper: Obviously, a lot of the funding is to make sure that we have enough people in place to be able to keep the whole Jobseekers regime working effectively, because what you do need to do is make sure that you can still have people being interviewed every couple of weeks, make sure that you are still supporting Jobsearch, and make sure you are still providing people with the help and so on. One of the things that happened in the early eighties was that the requirements on Jobseekers were weakened because there were not the additional staff in place to be able to ensure that the regime was kept up, that you actually provided people both with the extra support and also made sure that people were doing everything they needed to be doing in terms of meeting their obligations. A significant portion of the investment is about making sure that you have enough staff in place to support the current regime and also the Flexible New Deal, but in addition to that we have the programmes that we have put in place around extra help for people on sick who have been out of work for more than six months and the expansion of the local employment partnerships, but Leigh, I think, has the detailed figures.

Sir Leigh Lewis: As I think we made clear in our own memorandum, Chairman, we have three stages of additional funding, in PBR 2008 an additional £1.3 billion, the Prime Minister's Employment Summit in January of this year, £0.3 billion, and then Budget 2009, an additional £2.8 billion. Each of those has gone to a range of different facets of helping the department to deal with the recession and the challenges it poses. It was essentially PBR 2008 and Budget 2009 that provided amongst those totals substantial extra money for the staffing of the department for Jobcentre Plus.

Q8 Chairman: So most of this £1.6 billion is increased staffing?

Sir Leigh Lewis: We have taken on over 15,000 extra staff since unemployment began to go up and that obviously has consumed a substantial proportion of that money.

Q9 Chairman: More than 60 per cent of that additional money is going to be spent next year. I would have thought that the focus should have been on this year, not least to stop people becoming long-term unemployed. Can you explain why such a large amount is allocated for next year and not in the current year?

Yvette Cooper: A lot of our programmes are about preventing people becoming long term unemployed and also making sure that you have got more support for the long term unemployed. In any recession you would expect the increases in terms of the pressures on long term unemployment to take time to feed through, so we saw the biggest increases in short-term unemployment, in other words, the biggest increase in the numbers of people joining the claimant count, in January or February of last year. What we needed to do was make sure that we had support in place to prevent people becoming long-term unemployed and provide the expansion of support for people over six months. As you know, that billion pounds in total of the extra £4.5 billion of support for the unemployed as a result of the Chancellor's announcements is for the future Jobs Fund programme and that is to provide a guarantee that no young person will be unemployed for more than 12 months and to cover 150,000 additional jobs for people to go to. That guarantee starts from January. We are making it mandatory from April. Obviously, there needs to be time for councils, housing associations, a whole series of different organisations that are bidding for those programmes to be able to put those bids into place and start delivering those jobs. The first jobs I think started about a week ago in Barnsley and so those are now starting to come on stream, but of course that will continue to increase week on week as we go through and as a result, obviously, more of that money will be spent next year than this year.

Sir Leigh Lewis: Can I just add one extra element to that, Chairman, and that is that because we have been taking on staff through the current year, 2009/2010, we have not self-evidently needed to pay all of those staff for a full year in 2009/10, whereas we will need to do that in 2010/11.

Q10 Chairman: Have you had any difficulty recruiting staff in any parts of the country?

Sir Leigh Lewis: It has been a huge challenge to recruit at the pace and the numbers that we have been recruiting at, because taking on 15,000 extra staff in around a year has been a challenge for the department, but we have been able to recruit pretty effectively in almost all parts of the country and recruit some very able staff, inevitably because there are people losing jobs in other parts of the economy looking to us as a possible source of re-entering the labour market.

Q11 Chairman: How many of those have been recruited from people in receipt of benefit?

Sir Leigh Lewis: I just have not got those figures, I am afraid, in my head. We could certainly look and see if we have got any information that could help the Committee on that.

Yvette Cooper: We probably also can provide you with more information about other public sector organisations that have now started recruiting through Jobcentre Plus and are also recruiting from Jobcentre customers, in other words, from people who are currently unemployed as well, so we have been way across the public sector to encourage more public sector bodies to sign up with local employment partnerships and also to recruit from the unemployed.

Q12 Chairman: The point I would make is that we have heard a lot about local employment partnerships, and you have got the Backing Youth campaign, but if the department cannot take the lead by taking people from the claimant camp, say, how can you expect private business to, plus I would have thought that people who have had experience of being unemployed would have an extra skill that might not be available to others? I know that in West Yorkshire they have employed 73 lone parent advisers who were lone parent claimants and have been outstandingly successful. They might not have the academic qualifications of other people but they cannot half do the job.

Sir Leigh Lewis: We will have done a lot of this, Chairman, and we are way out in front of the Whitehall league table, if you would like to put it in that way, in terms of the number of people we have recruited through local employment partnerships. Another source of recruitment which has been self-evidently sensible is that we have taken people into Jobcentre Plus from other parts of government - the Land Registry is an obvious example - whose business has fallen because of the economic downturn and therefore they had surplus staffing and it made very good sense to recruit people who might otherwise have lost their jobs.

Q13 Chairman: Finally from me, the £2,500 recruitment and training package at six months, what are you doing to make sure that this is not just abused and being used to finance jobs that would have happened anyway?

Yvette Cooper: With any employment programme you always have to take into account that there may be some dead weight in terms of the impact of spending money where people might have been taken on anyway. We have been clear to provide this to help people who have been unemployed for over six months and to use this to help people who might otherwise not get a look-in from employers; they might not even get an interview at the moment, and so therefore, if they are able to send in with their application the information which says "and there is also a potential recruitment subsidy", that might give them a better chance in terms of being able to get an interview in the first place or be able to get that job. We published the six-months data today. One of the interesting things is that we are also finding that the local employment partnerships are proving to be getting far more people into work than those six months offers. The local employment partnerships obviously are working in that close partnership between businesses and the Jobcentre and those are currently getting over 40,000 a month into jobs, the majority of whom are people who have either been over six months unemployed or are maybe lone parents who are coming back into the labour market and so on for the first time. We have been working to try and ensure that the recruitment subsidy has an additional impact on top of what is happening anyway with things like the Jobcentre normal work but, to be clear with the Committee, as well as the recruitment subsidy what seems to be having particular results is the local employment partnerships and that is why we are expanding those as part of the programme over the next few months.

Q14 Mr Heald: Is it part of your response to the recession to have delayed the introduction of personal accounts with automatic enrolment not happening until three years' time? I think it is 2016 now, the date for the full contributions to be made by employers. Is the idea of this to help employers in some way or is it just that you are going very slow?

Yvette Cooper: No, it has nothing to do with what is happening in the recession. There was always discussion about having a three-year phasing for employers to increase their contributions year by year, to start with the original one per cent and then to increase over three years. The very clear advice that has been given to us from the officials and from those who are setting up the Personal Accounts Labour Authority is that there are huge numbers of employers who are going to be signing up every week and huge numbers of employees who will be signing up every week, and if we attempt to do that too fast there will be very serious delivery risks and, given the importance of maintaining confidence in something which is about people's long-term savings, people's long term pensions, we should not be taking risks with the delivery of something which is so important. That is why we have taken their advice, but from our point of view we would obviously like to implement this as rapidly as possible. We think the personal accounts are extremely important, that alongside the auto-enrolment it is a way of getting a big increase in the number of people who are saving for their retirement, but as ministers we would be irresponsible if we did not take the very strong advice that we have been given from officials on the operational challenges of introducing such a large-scale system. I do not know if Leigh wants to add something to that.

Sir Leigh Lewis: Only that if you go back through the whole history of major projects and where they have succeeded and where they have failed, one lesson is that if you rush at things in a way which puts too much weight on the system then you can live to regret that. As the Secretary of State says, of course, we have the Personal Accounts Delivery Authority specifically charged to look at implementing these new arrangements and their view is that this is the fastest pace at which we should safely go.

Mr Heald: I had better not pursue that.

Q15 Tom Levitt: My questions are about Jobcentre Plus; they follow on seamlessly from the Chairman's questions. You have told us that there are 15,000 extra employees in the department and I understand that the target for Jobcentre Plus is to reach 85,000 full-time equivalents by March next year. What was the starting date for Jobcentre Plus? Can we assume that all of those jobs have gone into Jobcentre Plus?

Sir Leigh Lewis: It was at around 67,000 at its low point before unemployment began to rise.

Q16 Tom Levitt: Obviously you have had a model in place. Despite what the Secretary of State said about not being able to predict, you have had a model in place to ensure that your staffing volumes can cope with anticipated volumes of clients and you have been able to mobilise resources quickly enough to deal with the increase and presumably also to match the fall in demand from clients which is anticipated at some point in the future. Are you satisfied that the modelling you have got is the right model for predicting those staffing levels?

Sir Leigh Lewis: I am satisfied that we have responded well, and I would just like to say as the Permanent Secretary that I think it is a remarkable tribute to Jobcentre Plus and the department that they have responded so effectively to the recession and the increased demands which have come on them, which have been very substantial, and I think any organisation, public or private, would have found difficult to cope with. I think we have been able to respond swiftly and effectively. My answer on the way we predict and forecast is the same as I gave to the Chairman's question. This is not an exact science; you are looking at ranges, but I think that what we have been able to do is gear up quickly and, by dint of having very deliberately taken on many of the existing staff on fixed term or temporary contracts, that will also give us the flexibility as and when unemployment does peak and fall to react quickly to that when staffing is expected to reduce.

Yvette Cooper: If I can just add to that, obviously, a lot of planning for this and the work that Jobcentre Plus has done to increase its staffing happened before I arrived at the department so I cannot in any way take credit for it, but I have been impressed by the pace at which they have worked to get additional staff in place. I think it has been very challenging and when we were looking back at what were the lessons from previous recessions and what do you need to learn from those, whilst in the eighties there was not an increase in resources for the Jobcentre provision at a time when there needed to be, what happened in the nineties was that there was an increase in resources to help Jobcentres. However, there obviously were very significant delays in that support coming through and as a result, even though budgets had been announced, the process of gearing up, of getting additional staff in place, took quite a long time, particularly in specific areas, and so that has been an important lesson that Jobcentre Plus has learned this time and it has worked really effectively to get more staff into place very rapidly.

Q17 Tom Levitt: Can I ask you a question not on quantities but on qualities? Presumably, a couple of years ago people were either coming into the Jobcentre as claimants and then coming off the register again pretty quickly or they were the more difficult people to help into employment, and staff would have been used to dealing with both of those categories. Today, and this is very much reflected in my constituency postbag, there is a group of clients for Jobcentre who have much higher expectations and also much higher frustrations because of the change in economic circumstances. I am a bit concerned that these qualitatively different challenges are coming at a time when there is a significant number of less experienced staff available on the Jobcentre frontline, so how do you address those qualitative changes?

Yvette Cooper: I think you are right to raise this because obviously there are challenges for the Jobcentres to increase staff rapidly but also to deal with a very different labour market. The labour market that 18 months ago Jobcentre Plus was operating in was very different and most people who had skills were able to find jobs very rapidly and now currently there are people who are coming in with the kinds of qualifications that would have found them a job very rapidly 18 months ago and are finding it much harder and therefore are asking for more support. That is one of the reasons why we set up the Executive Programme which is provided through contract. I think we need to recognise that, whilst there are some things Jobcentre Plus can do and can learn to do fast, there are other things where it does not have the expertise and where we should get in additional expertise from elsewhere. We have tried to do that through the Executive Programme which provides people with a different kind of recruitment support, in particular those with executive and professional skills. There is also a longer term issue here about the kinds of future reforms we are also keen to introduce in order to have a more personalised approach across the board and that greater emphasis on whatever people's personal skills are and whatever people's personal experiences are, a far more tailored approach. We do try to do that and we have different ways of doing it at the moment but I think that is an area where we can go further.

Q18 Tom Levitt: To repeat part of my question, the fact that you have less experienced staff dealing with potentially more complex cases is not a problem because you are outsourcing that work, is that what you said?

Yvette Cooper: We have a particular contract in place for those who maybe have professional or executive skills to get additional advice which is not from Jobcentre staff but which is provided through one of the contracts. We do that but what we also do is work very hard to make sure that anybody who is dealing with any customer at Jobcentre Plus has got the relevant experience. Obviously, more detailed advice sessions will be done with those with more experience and so on, so that kind of work is under way. I do not know if Leigh wants to add to that.

Sir Leigh Lewis: Just to mention a little bit of personal experience because the department, as the Chairman knows, runs a programme called Back to the Floor, under which we encourage our 280 senior civil servants to spend a week each year doing one of our customer-facing jobs. I spent a week myself in August doing just that in a Jobcentre and there it certainly had its quota of newly recruited staff. What I think was impressive, because you must be right: newly recruited staff are less experienced; they just do not have the detailed knowledge that is required, was that it was very much using the newly recruited staff on the simpler tasks, the ones that were more routine and repetitive, and using the experienced staff to come in and support where there was a need for that experience. This is a challenge; of course it is a challenge when you are recruiting people at that rate, but I was impressed by the way that they were maintaining the use of the experienced staff for those customers and those instances where it was most needed.

Q19 Tom Levitt: I am glad you have given me an opportunity to tell us about the Back to the Floor exercise; that sounds fascinating. Of those 18,000 people who are now working for Jobcentre Plus who were not previously, some of them, of course, come from other parts of the DWP. Can you give us an assurance that that migration has not damaged the services that they were previously providing and that the DWP has not reduced its effectiveness because of that migration?

Sir Leigh Lewis: Yes, I think I can. Just in one sense, the timing was helpful because other parts of the department were, as part of our overall and continuing efficiency programme, reducing staff anyway, so in our other main agency, the Pension, Disability and Carer Service, there is a long-term plan to reduce staffing as its efficiency increases and therefore some of those staff were able to transfer over and that has not affected their performance. Indeed, the performance of that agency has continued to improve overall through the year. Similarly, the CSA, as then was, now part of the Child Maintenance and Enforcement Commission, was already planning to reduce staff and therefore it fitted quite well for some of those staff to transfer across to Jobcentre Plus.

Q20 Tom Levitt: We have already talked about our staffing numbers needing to change according to demand, but are there any other lessons that you think can be learned from the experience of the last 12 months about how the department plans its human resources? Perhaps specifically, do you think here in retrospect that the 2004 Spending Review impact on DWP might have been over the top?

Yvette Cooper: A lot of the work that has been done in the department in response to the 2004 Spending Review has been to deliver some very important efficiency savings across the board in the way in which the department does its business, so there is a whole series of areas where the department has become more efficient and is making savings on the administration and the way in which benefits are delivered. All of those sorts of things, which I think are a good thing to do regardless, we have got to carry on doing and so we have work under way already on what the next phase is of efficiency improvements across the department. I think it is right to respond to the level of demand that you face but also to be able to respond quickly if you need to increase support very rapidly. That is what we have done and I think what Leigh could probably provide more details of is that the department is also helping more people in a more efficient way in that with the investment that we are putting in, both in terms of the staff time but also in terms of the wider resources, we are still able to help more people in a more efficient way than we were even four or five years ago. You have got to keep that pressure up on every public service and so it is right that we should do so.

Sir Leigh Lewis: I would only add to that that I think without some of the efficiencies that we brought in over the SR04 period we would have struggled to cope with the increases in demand that we have seen over the last year. We are an infinitely more flexible, adaptable organisation than we were. Just to give you one very hard-edged but practical example, we now have all of our contact centres which take claims from people who are losing their job and ringing to make a claim to Jobseekers' Allowance networked into a single virtual network, so 60-plus contact centres, which means that when somebody rings the technology automatically routes that call to the next available member of staff in a contact centre, wherever that person may be, to take that call. We did not have anything like that at the beginning of SR04 and were terribly vulnerable therefore to a major redundancy in a small area, and all of those calls would have gone just to one contact centre or one office and could easily have overwhelmed the number of people you had there. That is an example where we are hugely more efficient now than we were, and that has enabled us to respond far more effectively to the increase in numbers.

Q21 Mr Harper: Secretary of State, I wanted to ask you about one of your public service agreements and one of your objectives, ESA 17 about promoting greater independence and wellbeing in later life and ESA 5 on promoting quality of opportunity for disabled people. Both of those are not yet assessed in the last departmental report. What I wanted to ask you was how you felt both of those would be impacted by the proposals that you, together with the other Secretary of State, put forward in the Shaping the Future of Care Together Green Paper. The Green Paper has three models in it for the Future of Care services. All three models, I think, and I would be grateful if you could confirm it, are underpinned by getting rid of attendance allowance, and indeed yesterday Lord MacKenzie confirmed that it was not just attendance allowance but that that encompassed potentially all disability benefits. Am I correct in assuming that all of those models assume losing attendance allowance and other disability benefits? Are there any models which do not assume that in that Green Paper?

Yvette Cooper: I think what it is important to say is that the Green Paper is obviously still in consultation and we are looking for responses. What we particularly raised in the Green Paper in terms of the issue about attendance allowance rather than some of the other disability benefits was that we should look at whether it is possible to better link the care and support that is provided through attendance allowance with the care and support that is provided through local councils and social services and so on because often people will get a bit of support from one area, a bit of support from another, and actually the assessment of their needs can end up being fragmented and they are not getting all the support they need. One of the other things that we have also said, however, is that attendance allowance provides very important support for an awful lot of people across the country in a way that they hugely value. In particular it gives people control; it gives them control of themselves over the way in which they get that support and it is a budget that they can themselves spend. What we have said is that if we are to move to a new system and deliver a new and better care service then what it needs to do is build on the strengths of attendance allowance, which is about providing people with personal budgets and which is about providing people with control themselves over the kinds of care they get as opposed to simply saying, "We are not going to have that kind of approach, we are not going have that sort of attendance allowance. We are going to have a completely different system instead". We have not taken decisions about what is the right way forward and I think therefore that building on the successes of attendance allowance and the popularity of attendance allowance is the way in which we are trying to take this forward as opposed to saying we should not do that any more.

Q22 Mr Harper: Can I just clarify something? I know the Green Paper only specifically refers to attendance allowance but I am correct, am I not, in saying that you are encompassing within that all disability benefits? That is what Lord MacKenzie said in the House of Lords yesterday. He was very explicit; he said, "We do not want to leave out any options and so are considering all disability benefits".

Yvette Cooper: I think it is right that we look at all proposals that come forward as part of the consultation and it is right that we have this as a very wide-ranging debate, but I think what you will find in the Green Paper is that we talk particularly about attendance allowance but also, and I think it is really important to make this clear, we have not taken any decisions about this.

Q23 Mr Harper: Can you just answer the question, though? In terms of the proposals that the Government put forward, although attendance allowance is only mentioned in here, it is correct that you are looking at including potentially all disability benefits in that, including disability living allowance?

Yvette Cooper: At the moment we are not proposing to make major changes to the disability living allowance. What we have said is that we do need to look at the way in which the wide range of disability benefits interact; that is important, and I think there is still an important series of different steps that we have to go through yet before we can reach final conclusions about what the new framework should be. I think it is also possible to do things which allow you to add to the existing framework of attendance allowance. There is a whole range of different possibilities and different ways that you could do this and it would be wrong to say that the Government has decided on a particular model or a particular way of doing it which has particular implications for specific benefits, because that is not where we are on this. What we do need, however, is a very wide-ranging debate because what we know is that an awful lot of people are not getting the care and support they need, whether it is through attendance allowance or whether it is through social services or whether it is through different ways, and are not able to afford the care that they need either. I think we have to have some major reforms to this but saying that this will mean particular things for particular benefits is just way premature. That is not the stage we are at right now.

Q24 Mr Harper: Is there a particular reason why, in none of the three questions that the consultation document has in it, does it ask for anyone's opinion about what happens to those benefits? Opinions are not asked for about what should happen about the disability benefits. Is that not a little underhand?

Yvette Cooper: I think we have asked very open-ended questions that allow people to tell us everything they think about the proposals and what the consequences might be and so on, so we will welcome views on all sorts of things, whether specific questions have been asked in particular ways or not.

Q25 Mr Harper: I was quite heartened by what you said about the personalisation and that is indeed one of the things that, if you read this Green Paper, does seem to be running counter to what the Government is saying. This is talking about moving some of those allowances which, as you correctly say, go to individuals, they have control of them and they seem to be moving them towards control by local authorities. Given that the role out of personalisation is not going at the pace which I think ministers would like, or indeed we would like, in that around 12,000 people have an individual budget out of potentially 1.7 million people getting social care, if these benefits are changed and maybe fall under the control of local authorities, what are you planning to do to make sure that people do have access to an individual budget on a much wider scale than they have at the moment?

Yvette Cooper: It is hugely important that people have as much control as possible. There will obviously be some people who are not able to do that but the majority of people want to be able to make their own decisions about what kind of care they have, about what their care needs are, and also to be able to make those decisions within the family, because in most cases it is not just about an individual; it is about the whole family and the way in which they are all caring for each other. We have said very strongly that this is a direction that we want to go in with much greater personalisation. I think Andy Burnham said exactly the same thing, that what we want is far greater personalisation. There are different ways in which you can do that. One of the things that we are doing in terms of our own department is the Right to Control, which is part of the Welfare Reform Bill for disabled people to have much greater control and also to embed that in the sense of the entitlement to be able to do so in terms of budgets. There is far more we can do in that direction as well, and we are obviously doing so particularly around disabled people because that is the area where we have the strongest policy locus, but it is something we are interested in doing right across government as well.

Q26 Jenny Willott: I would like to ask some questions about Employment and Support Allowance. Originally we were told that the disallowance rates for those undertaking the work capability assessment would be more than ten per cent higher than the disallowance rates under the old personal capability assessment, but I am sure I am not the only Member of Parliament who has seen what would appear to be significantly higher number of people being disallowed under the WCA than expected. Could you tell us whether the on-flows onto both the ESA support group and the ESA work-related activity group have been in line with projections or what they are looking like at the moment?

Yvette Cooper: It is still quite early days in terms of the ESA and the work capability assessment and so I think what we can do is to send you some more information about the on-flow rates because those are still settling in. We are still looking both at the impact of the new test but also at the impact of the recession in terms of the number of applications and whether that is changing. That is one of the other factors that you have to take into account in terms of looking at what is happening with the on-flow rates. You will have seen the figures that were published yesterday which showed that in the first phase of claims five per cent were classified as support group, 11 per cent were the ESA work-related activity group, 36 per cent were assessed as fit for work, ten per cent were still under assessment and 38 per cent had stopped claiming the benefit before the work capability assessment was completed. A lot of those would have been people who were just claiming on a short-term basis for short-term conditions and therefore had moved back into work or into another position before the assessment was completed. Many of those cases will still be completing appeals. At the moment it looks as though the majority of appeals are not being upheld and therefore are confirming the original assessment, but again we are still at an early phase in that. We shall also, as part of an internal review on keeping track of what is happening, shortly be commissioning an external review of the WCA, so that will tell us more about what is happening. At the moment though it does look, as you say, as though more people are being assessed as fit for work, compared to the previous system certainly. That is partly, of course, what we expected because we are doing the assessment earlier in the process, because this includes far higher levels of face-to-face medical assessments and because the test for locus is far more on what people can do rather than what people cannot do.

Q27 Jenny Willott: You have answered a lot of my questions in one answer there so I shall re-jig what I was going to ask you. There has been a really large increase in the number of complaints to Jobcentre Plus in the last year, on a month-by-month comparison rather than the whole year, particularly in certain regions. Yorkshire and Humber has gone up by 61 per cent, London is nearly 60 per cent and so on, so quite significant increases. How much of that increase do you think is just as a result of the increased numbers of people going to Jobcentre Plus or do you have any figures about how much of the increase is as a result of things like the changes to ESA and so on?

Sir Leigh Lewis: I think to some extent the increase in the number of complaints is a factor of the fact that there are just many more people, if you see what I mean. What I think is interesting and rather encouraging that is overall customer satisfaction levels with Jobcentre Plus, which were already high before unemployment started to rise, have remained stable; there has not been a fall in overall satisfaction levels with Jobcentre Plus. Also, the number of people who tell us that they believe that the service is improving is substantially higher as a proportion than the number of people who tell us that they believe that the service is worsening, so there is quite a lot of encouragement in our latest customer service figures for Jobcentre Plus. It is a huge organisation, it is dealing with millions of people on any one day, and inevitably at times it gets it wrong; it is as simple as that, but overall the figures are encouraging. What is also encouraging to me, and I think to Mel Groves, its Chief Executive, is that the organisation is getting better. I talked before the Public Accounts Committee about complaint handling not very long ago. I think we are getting better at responding well and quickly to complaints.

Q28 Jenny Willott: Thank you for that. Going back to the point about the number of appeals that have been granted and so on, could you tell us how the rates of successful appeals for the WCA compare to the rates for the personal capability assessments?

Yvette Cooper: If I may can I write to you about that unless Leigh has the figures accessible? I do have a figure in my head but I am not sure if it is the right one and I do not want to give you the wrong figure, and obviously there are still appeals in the system as well. The figure on the proportion of people being assessed as fit for work under the previous test, the personal capability assessment, was around 17 per cent.

Q29 Jenny Willott: On appeal?

Yvette Cooper: No, that was before appeal. I will write to you with the figures on appeal to make sure I give you the right ones. As I say, before appeal the proportion being assessed as fit for work was about 17 per cent, and that is an approximation, under the previous system. However, of course, that test was done later on in the course of someone's application. The new test is being done earlier and therefore the later test may have been affected by the fact that some of the people who had been on incapacity benefit for longer would also be those who might have the more difficult conditions.

Q30 Jenny Willott: You also referred to the review that has been introduced to look at the WCA. There is already set up a statutory provision for an annual review of the work capability assessment. Why is DWP going to be reviewing it separately from that process, given that it has been operating for about a year and presumably you were expecting one of the statutory annual reviews at some point? Can you explain why it has been done that way?

Yvette Cooper: We need to do the statutory review very shortly but, as you rightly say, it takes time to get the new system in place and so therefore to have that review in place. We thought it was important to review this continually as the implementation went through and we will be able to tell you more about the conclusions of that internal review in due course. However, I think it would have been remiss of us not to review this continually with the implementation of it, given the importance of this. We have said that we need a stronger test alongside stronger support for people to get into work. The whole purpose of this is to make sure that as many people as possible who are able to work can do so and get the support they need to get into work, but we also need to make sure that we are keeping track of the new system and making sure that it is working effectively.

Q31 Jenny Willott: So when are you planning to do the regular annual review as distinct from the one-off one?

Yvette Cooper: We hope to start that relatively soon, so again I can provide you with further information on the precise timetable.

Q32 Jenny Willott: What is the difference between the two, because if the one-on-one is happening now and the regular one is about to happen why are you doing that?

Yvette Cooper: It was simply because we thought it was important to have early information. In terms of the way in which independent reviews take place, we will have a whole series of processes that it will need to go through and all of those different organisations who have an interest in this as well as individuals who may be affected by it would expect us to have an independent review process, an external review, carried out. However, from the point of view of ministers and the department, to make sure that we are doing everything we can to make sure the test is as effective as possible and also to make sure we are getting the right kind of support in place for people once they have been through the test, we need to have earlier information about that as well. This is not to undermine in any way the significance and importance of the external review; it is also to say that in advance of that we need to do our own work on seeing if there are any other things we need to do.

Q33 Jenny Willott: The final issue I want to ask about is what you are doing to look at the broader implications of the people that are failing the WCA because clearly there are people who are going on to Jobseekers Allowance who in the past would gone on to incapacity benefits. I am picking this up a lot in my surgeries and I am sure all Members of Parliament are and you probably are on your patch as well, so there are more people who are going on to Jobseekers Allowance who have got medical conditions, either physical or mental health conditions. The support that they would have received under incapacity benefit clearly is not in place for them if they are going on to Jobseekers Allowance. I would be grateful if you could tell us a little a bit about what you are doing to make sure that there is additional support there. For example, are you looking at whether they can access Pathways to Work? Are you looking at additional training for staff and some of the communications issues that it raises? What is being done, because at the moment Jobseekers Allowance is not appropriate and the support that is available for them on that often is not appropriate for the type of people that are failing the WCA and going on to that?

Yvette Cooper: I think you raise a really important issue and one which we have been looking at, which is what is the appropriate support for people who are able to work but may also have some kind of health condition, and it may not be a health condition that prevents them working or prevents them working part-time or prevents them doing one job or another but may still be a health condition and they may need some support with it. It is also an appropriate time for us to look at the Pathways programme and to look both at the people who are getting the ESA but also people who are on JSA who have different kinds of health conditions or disabilities and need different kinds of support. We have announced this week that we are introducing the Fit for Work programme in 12 areas, which is looking at what additional support you can give to people to help them stay in work, and also the Access to Work budget is an extremely important one because that gives people different kinds of help, but you are right that what we need to do is make sure people are getting access to the right kind of support. I think it is probably time to look again at the Pathways programme and how that needs to improve for people on ESA. There is also the question you raise about whether there are versions of the Pathway programme that might also be appropriate for some people on Jobseekers Allowance, but I think the Pathways programme needs to change in response to the changing nature of the assessment and the wider welfare reform programme. I would be very interested, obviously, in the Committee's views on what more we should do in this area or how we need to change the programmes to provide support. We will shortly be publishing further information about the Pathways programme and are also looking further at helping people with health conditions to get into work. We are looking particularly at people with mental health problems, for example. We have commissioned the Perkins Review to look at issues around mental health and unemployment and whether there is more that can be done there and I think that has to include people who are JSA claimants as well as people who are ESA claimants.

Q34 Jenny Willott: You mentioned Access to Work and its availability. One issue that has been brought up with me quite a few times now is the fact that it is not available for those who are doing work experience or going on training courses. It is only if you are in permanent employment. Is that something that you are looking at as well as more people who are on JSA that would need access to the Access to Work pot are more likely to be going on to things like work experience and taster courses and things like that? Could you tell us a little bit about that? Is that something you are looking into?

Yvette Cooper: We are in the early stages of looking more widely generally at this. We will have produced the Back to Work White Paper before the end of the year and one of the things that we want to look at as part of that is saying a bit more about the principles around it, supporting people with different kinds of health conditions or disabilities to help more people get back into work. There is probably not much more I can specifically tell you in terms of the Access to Work budget at this stage, but obviously this is looking at support for people in work and for people out of work, and that does include looking at issues around what sort of pre-employment training people might need or what kinds of support they might need in order to be able to do that pre-employment training in the first place.

Q35 Jenny Willott: So you will be looking specifically at the pots of money that are available for people with disabilities to do that?

Yvette Cooper: As you have raised it with me I am very happy to look specifically at the issue around support and training as well.

Q36 Chairman: Can I just raise two follow-on questions, because now there is just an absolute mountain of evidence that the biggest issue for people with mental health is employer prejudice and blatant abuse. Is anything happening in that arena? It is really outrageous, the extent of abuse that happens.

Yvette Cooper: There are two things we are doing. The first is that we have been working on a cross-government mental health and employment strategy, which is working. It is the result of a lot of the work that Dame Carol Black did initially and she has been taking that forward. There is obviously a lot of close working with the Health Department in particular, but also working with employers about what more we can do more widely to have that effective working between the NHS and employers and exactly dealing with some of the issues that you are talking about in terms of people's prejudice, people's attitudes and so on towards it, because it is far better often for people's mental health if they can stay in employment when problems arise. That is the overarching strategy. In addition to that we have specifically asked Rachel Perkins to look at problems for people who are unemployed with mental health conditions and who are getting back into the labour market. The strategy is a wider one because it looks at people who are in work as well as people who are out of work and then specific additional work around people who are unemployed. We would hope to publish both of those within the next month or so, certainly before the end of the year.

Q37 Chairman: Just finally, this Committee has raised many times in different reports the issue of people with fluctuating conditions and this still has not been cracked. With all the work that you have talked about on the ESA, if the claimant it is a bad day they will pass and get on to ESA; if for the claimant it is a good day they will fail and it is the same person. How much do you see this as a policy and how much do you see it as an issue around how the WCA is constructed? How do we deal with these people so that they can get helped rather than being consigned to one bin or the other, neither of which is appropriate?

Yvette Cooper: It is something that we have done quite a lot of work on so there has been a lot of effort to work with different stakeholder groups who know a lot about fluctuating conditions but also with GPs on this. A lot of work has been done to try and address that issue around the snapshot and to make sure that is taken into account in the work capability assessment. As somebody who had a fluctuating condition and was off work ill about 15 years ago, I personally think that this is hugely important and you have to be able to make sure that both the work capability assessment is able to respond to that but also that you need to work with employers to help people who have got fluctuating conditions, because there are people who want to be able to work and may be able to work for short periods and then may need two weeks off and then may be able to work again. That is not impossible for all employers. It can be difficult for some employers but it is not as impossible as many employers often will think it is, and so I think it is both looking at whether we are making sure that our support systems are effective enough but also doing more in the same way as we are talking about some of the mental health issues being about dealing with the employer side as well. We have done a lot of work on it. I am keen personally to keep looking at this further just in the light of my own experience. I am happy to keep the Committee updated on that. I do not know if Leigh wants to add anything more about the work that we have done already on it.

Sir Leigh Lewis: No. As you say, Chairman, it is an issue that the Committee has raised a number of times. It is also a really difficult issue. If there was an absolutely simple answer we would all have found it by now, and I know, for example, that our Chief Medical Adviser, Dr Bill Gunnyeon, spends a lot of time with professional colleagues looking at this. Our procedures, in the way we offer them, are designed to look not just at the here and now, but nevertheless this is a difficult issue.

Chairman: We are delighted it is on the radar.

Q38 Miss Begg: I have questions about Pathways to Work but mostly around the way it is functioning at the moment. You did ask the Committee if they had any ideas on how to improve Pathways going forward. As a partial answer to the Chairman's question, and picking up what Jenny Willott said, the only gateway into Pathways is through somebody who is on ESA and has passed. I never know whether you have passed or failed, depending on how you look at the work capability assessment. However, there will be people who have fallen out of work because of an ill health episode. It may not be bad enough to allow them to qualify for ESA and therefore they are the ones who are failing the WCA and are finding themselves on JSA. If you had an automatic entitlement to some kind of help, as if the reason you have fallen out of work is not through unemployment but because of a health-related incident, then you might be able to get some help. It may be a lot less help than is necessarily needed through Pathways but a help that allows people to identify a different job because they have fallen out of work because they could not do that job, and, of course, all the work done on keeping them in work in the first place is also very useful but that might be a way of answering some of those questions. I think the frustration for many people and why they are desperate to fail the WCA is because that is the only route they have of getting the help they need and there is no gradation with regard to the fact that in normal circumstances, of course, they could work and possibly could work full time but not in the job they were in and they need help to identify what that new job is. That is one of the ways forward. The question is how the Pathways to Work programme is working at the moment because there has obviously been an impact on it because of the change to ESA and the WCA, so how is it performing in your eyes at the moment as a mechanism of getting people off them and getting into work?

Yvette Cooper: What we find is that as interviews are done with people who have had help from the Pathways programme have been through it they tend to strongly value it, that often people will say it has made a very big difference to them in terms of being able to get back into work and in terms of them liking the support they have received. The evidence on the overall impact in terms of employment relative to other programmes has been far less strong and we will publish very soon some evaluation that has been done from some of the initial phases. My sense about it at the moment is that the Pathways programme is providing some extremely valued help for some people and a lot of people have said that they welcome the support that it provides, but that there are questions, for example, about the way in which it links to training. Although it provides quite a lot of support on things like condition management programmes, does it have the right kinds of things with pre-employment training or those sorts of questions? Similarly, there are issues that you have just raised and Jenny raised about whether or not there is that health support that ought to be provided for other people who are not people going through the Pathways programme or claiming ESA at the moment. I think this has been a very important programme but that this is the time to review it more widely. I would be interested to know the Committee's views both about the issue for JSA claimants but also for the ESA claimants where you think that this could be improved or adapted because, as I say, it is something that we want to make some progress on quite rapidly in advance of the Back to Work paper in the new year as well.

Q39 Miss Begg: I do wonder whether enough people are being referred on to Pathways to Work because, according to information gathering from a freedom of information request, up to September last year provider-led pathways had only received 68 per cent of the starts expected. Do you know why that is? They are presumably being contracted for 100 per cent, they are getting paid for 100 per cent coming in, and if they are only getting 68 per cent that is bound to affect the outcomes and the providers are being underused.

Yvette Cooper: The latest figures I have are that overall Pathways to Work has helped over 148,000 people into work. Of that there are 11,000 in provider areas, and part of the reason for the balance of those figures is that the provider areas have only come in more recently, and the current level of support the private and voluntary sector providers are now achieving is around 2,000 job entries a month, so that has increased over time.

Q40 Miss Begg: That still does not give us an answer to the percentage in terms of the on-flows. Could you provide the Committee with the figures?

Yvette Cooper: I will do. There were some early problems in terms of the referral arrangements between Jobcentre Plus and the private and voluntary sectors. My understanding is that those have now been addressed and arrangements have been changed between them in order to make sure that that is happening and to make sure that people are being effectively referred, but I will go back and check and write to you further about it.

Q41 Miss Begg: Also, there was an article in The Observer in March 2009 which purported to have the contents of a leaked document that indicated that there were very poor levels of performance from the private companies in Pathways to Work, that they were achieving very low job outcomes, only 27 per cent of the job outcomes expected. Have you got any comments on that?

Yvette Cooper: I am in a slightly difficult position simply because we do have reports that will be published very shortly that I think will provide you with the answers to a lot of these questions and will set out some evaluation that looks both at private sector provision and also at employment provision. I think it is important that those are fully published and you have access to all of those.

Q42 Miss Begg: So there will be the private provision, the set provision and the cross-provision? It will have all three?

Yvette Cooper: Yes.

Q43 Miss Begg: I think that is quite important, if you do not mind my saying, from a political point of view because I know that the Tories are saying that they want to put most of this work out to the private sector and if the private sector is under-performing the other sectors that is an important bit of information that we need.

Yvette Cooper: Obviously, a lot of these assessments are limited by what data is looked at and there are not significant differences being found between the different kinds of provision. I think what I should do is probably let you know the title of the publication because it is relatively soon and then if you want to ask further questions, even a written form of questions, once you have that evaluation I am very happy to follow up.

Q44 Miss Begg: A lot of the referral to Pathways is on a voluntary basis, and it is only through the ESA now, but I understand you have got pilot areas that are doing it on a mandatory basis. Have you got any information about how that is working, whether it is more effective, less effective, waiting for people to volunteer to go on to Pathways?

Yvette Cooper: I think that is probably too early to say, but again I will add that to the information we send you.

Q45 Harry Cohen: Part of the Pathways to Work is to help people get over barriers and to improve their confidence has a psychological component, CBT. How is that working? Are there enough people to practise that in view of the people who need that service?

Yvette Cooper: I do not have the answer to that.

Sir Leigh Lewis: I do not think we have had shortages in the necessary skilled professionals but I think it is early days and covered by the overall answers which the Secretary of State has given. There is just one extra thing perhaps that I thought I might just say in answer to your question, Mr Cohen, but also to that from Anne Begg. It is right to say that Jobcentre Plus of course does have a network of disability employment advisers and has had in its offices, and therefore they are there; they have been there and they remain there to help people claiming JSA but who, nevertheless, have problems and barriers to overcome. Perhaps it is worth adding that.

Chairman: I would say that I am delighted that cap on the number of voluntary people who can be taken has been lifted. That is really good news.

Q46 Mr Heald: At the end of 2008 we were promised a housing benefit review consultation in early 2009. It got to June and the Minister, then Kitty Ussher, said a few months more. Here we are five months later. The latest bulletin I saw that you put out said it would be soon. What is happening?

Yvette Cooper: One of the things we have been looking at is how we should be linking the housing benefit to the next stage of welfare to work and programmes on welfare reform. Obviously, we are doing a whole load of work around preparing for the Back to Work White Paper. The issue at the moment is to make sure that the approach to housing benefit is in line with the wider approach and the Back to Work White Paper. That has involved us looking at some issues again, as part of the work that had been done around housing benefit. I do still strongly think that this has to be the next phase of reform to help people into work. We know that particularly in high cost areas - obviously particularly in London - housing benefit does cause problems for people who are trying to move into work, both in terms of the way it is paid and the intermittent nature of the fact that it responds immediately to changes in people's incomes and then poor people can find it difficult to predict what they might be entitled to, and the fact that also there are an awful lot of people who do not realise that they can get housing benefit while they are in work, as well. That affects perceptions of whether or not people would be better off in work, even if in practice they will be significantly so. I think, therefore, this has become so important as part of helping people into work that that has also meant it has been important to do this alongside some of the other measures to support people getting back into work, but we are very clear that we want to set out measures to reform housing benefit before the end of the year.

Q47 Mr Heald: The other housing issue is the Local Housing Allowance. At the moment, if you have a rent which is £15 or more less than the level of the allowance you can keep £15. You consulted earlier in the year on scrapping that, so you would get either your actual rent or the level of the allowance, depending on your circumstances, but you would not be able to keep the £15. In The Times recently there was a comment that you were not proceeding with scrapping the excess entitlement. What is the score on that?

Yvette Cooper: At the moment, the position is that we have set out a consultation process and the Social Security Advisory Committee has also conducted consultation as well. We are considering all of the consultation responses. I think some quite important issues were raised as part of that consultation which we do need to look at very carefully because there are significant questions there. We will announce our response to that consultation in due course. I will certainly let the Committee know as soon as we do so.

Q48 Mr Heald: One of the issues that has been raised with us is that if you did scrap it, it might lead to the levels of rent actually going up as landlords just put the rent at the level of the allowance, and it would have an overall effect on the housing market. Is that one of the concerns you are worried about?

Yvette Cooper: Yes. I think one of the issues that has been raised is: what will the impact on landlord behaviour be, as well as the impact on tenants. That is certainly one of the things that we are looking into further.

Q49 Mrs Humble: Can I move on to another consultation document that was promised, and that was on the Social Fund, back in February. The Government announced then that there was going to be a further review into the Social Fund beginning in summer 2009. I know I have seen various government announcements over the summer on the Social Fund but I do not remember seeing a consultation document. Is one going to be published?

Yvette Cooper: Again, the Social Fund and a series of other things have become wrapped up in the wider programme of work around the Back to Work White Paper. It is one of the things we are looking at at the moment and we concluded that rather than doing things in a fragmented way, it made sense to try to pull all of these things together. I am aware of the Committee's strong interest in this area and some of the points that you have made previously about this as well. We are making some changes. We are including, for example, ensuring that for someone's third application for a crisis loan that they have to have a face-to-face interview. I think we have to do much more in terms of linking this to proper budgeting advice, proper financial advice and support for people, rather than people just getting stuck in a cycle of repeat Social Fund applications.

Q50 Mrs Humble: The Committee's earlier report on this did highlight the importance of the Social Fund to many people, especially those who have been on benefit for some time. Interestingly, the statistics that the Department has published have shown a surge in demand for crisis loans, with an increase of over 37 per cent from 2007-08 to 2008-09. Given that we complained previously about the times for processing applications, and now you have had this large increase, are you confident that claims are being processed efficiently and effectively and that people are being given the crisis loans that they need?

Yvette Cooper: I think Leigh can say a bit more about this. This is a hugely important provision for people and there are a lot of people who depend on that kind of support. Obviously we have increased the budget and increased the support available. The nature of the credit crunch and the recession has meant that there have been people who have been facing financial difficulties and we have seen the increase in support. We have certainly also, apart from increasing the resources available, done everything we can to make sure that we are keeping up with the rising demand in terms of processing things. Of course, it is a pressure in terms of being able to deliver that effectively.

Sir Leigh Lewis: May I reinforce what the Secretary of State has said and, as you have said, we have seen a very substantial increase in the number or applications for Social Fund crisis loans. That has put pressure on the system and on Jobcentre Plus at a time when volumes everywhere have been rising. Jobcentre Plus have moved pretty quickly to put in extra resources. They have been able to put more telephone capacity into dealing with applications and overall performance now is definitely getting better. There is a tension because a relatively swift and effective way in terms simply of handling volumes of dealing with Social Fund applications and crisis loans is to deal with them over the telephone. As the Secretary of State implies, it is hard over the telephone really to get to the root of the issue and the problem. That is why we are going to introduce for people applying for a third loan within a year, at the end of October, that the third interview will be a face-to-face one rather than by telephone.

Q51 Mrs Humble: Do you have any idea why, whilst crisis loans have gone up, budget loans have gone down? Have you done any assessments on that?

Sir Leigh Lewis: I am not aware that we have. I will check whether we have and, if there is any information on that, we will write to the Committee, but I do not have it to hand if we do.

Q52 Mrs Humble: Going back to the quality of staff and how staff are dealing with the increase in applications for crisis loans, what measures are you taking to train contact centre staff to make the right decisions? Not only has the Committee in a previous report commented upon the way that decisions were made and the difficulty that applicants had in accessing somebody via a telephone and then actually getting the information over to them, but your own internal auditors have also commented upon Social Fund decision-making. At the risk of repeating myself, if you get more people ringing up, you have to make sure that the decisions are being taken properly.

Sir Leigh Lewis: This is a really important issue. There is something here which I hope the Committee will welcome. We are very aware of this and of some of the comments made by the Independent Review Service, for example. From September of this year, Jobcentre Plus have introduced a new quality assurance framework, precisely to seek to improve and drive up quality of Social Fund decision-making. I do not want to go into too much detail. That framework provides for the identification of particularly common errors, much more one‑to‑one feedback to staff, and importantly I think the more systematic use of the feedback that the Independent Review Service gives us on their findings in individual cases. I think that is really quite an important development and it responds to some of the things which this Committee and the Independent Review Service have said.

Q53 Harry Cohen: I want to ask about fraud and error issues. You rightly make a very proper distinction between fraud, official error and customer error, but all three of them amount to around £900 million each and total together about 2 per cent of the overall benefits bill; it has been stubbornly at that sort of level. Firstly, may I ask you about the impact of the recession and what effect you think that will have on the percentage. Even if the percentage does not change, that will mean an increase in all those areas in actual amount. As well as that, your department has quite rightly been reducing the head count staff as part of efficiency, where you can, and also transferring some from the back room to the front room to deal with customers. It is those back room staff that deal with fraud and official error and other error. Can you talk about that impact?

Yvette Cooper: I will ask the Permanent Secretary to respond to that. We have been doing a lot of work in that area.

Sir Leigh Lewis: It is a really important subject. Could I take issue with just one thing you said, Mr Cohen? Although the gains have been small and incremental, it is getting better. The NAO report that was done for the Committee notes that fraud and error is now at its lowest ever level in the Department's history at 2 per cent. If you go back to the beginning of this decade, it was at over 3 per cent. We have been seeing it get steadily better, but the steps are small. There is a huge programme of work to address fraud and error going on in the Department. The three components inevitably are different. In one case people are deliberately trying to defraud you and we have one set of responses to that. Then we have customer error; the customer makes a mistake but by definition, because otherwise it would be fraud, it is an unwitting mistake and it is not deliberate in any sense. We have done a huge amount of work to try and improve the information, the simplicity of our systems for training, and so on. The third component is that our own staff make mistakes and that is official error, and again there is a huge amount of work going on into that. One of the things we are concerned about inevitably is that when you bring in many new staff, and by definition they are inexperienced at the beginning of their employment with us, there is a risk that they will make more mistakes because they just do not know the systems. We have, as we all know, a very complex benefits system as well. We are putting in huge amounts of effort to try and ensure that they are properly trained. Again, as I said earlier in answer to a question from Mr Levitt, we are using our more experienced staff for our more complex cases. It would be idle to say that when you bring in 15,000 new staff very quickly there is not some risk that overall error might rise, but we are working very hard on this. Overall, I am genuinely encouraged by the progress we have been making. One thing that it is perhaps worth saying is that the NAO themselves have compared us against a whole range of comparator countries and they do not believe there is any which both measures fraud and error as systematically as we do and also which has as comprehensive a programme to try and tackle it.

Q54 Harry Cohen: Picking up the point about the new staff, there is a programme of effective training as best you can at that early stage?

Sir Leigh Lewis: Yes. We have almost doubled our training days this year. That is very largely directed at those new staff. The whole emphasis is that new staff are not deployed until we can be as sure as we can be that they are able and competent to deliver the tasks. That is, of course, why at the outset they are directed towards the simpler tasks, which require less experience and less knowledge, but again one could pretend that there is no risk whatsoever arising from the new staff, and that cannot be the case. If you bring large numbers of people in who have not worked in your system before, they will simply be less experienced; they must be more vulnerable to making mistakes.

Q55 Harry Cohen: You launched an error reduction strategy in January 2007. It has not yet published progress report for 2008-09. When do you think that is likely to be done? Also, in the longer term, the Comptroller and Auditor General has not signed off your accounts I think for 20 years because of the level of fraud and error. Do you think you are ever going to get to a stage where we would be in a position to sign them off?

Sir Leigh Lewis: I very much hope so. I think the longest letter that I have ever written and signed as the Permanent Secretary was to the Chairman of the Pubic Accounts Committee about precisely that, and I did at the time, Chairman, copy it to you. It is somewhere dusty in the archives at the moment. I think we must break out of this. I have said this before to the PAC. Where you have reached a position where your accounts are qualified for 20 successive years, it ceases to be any kind of incentive for better or worse to anyone, if you see what I mean. It simply becomes something that almost has a ritualistic quality. I think we need to be in a position where we, our staff and the Department can see a realistic prospect of being able to arrive at unqualified accounts in order precisely to increase the incentive on us to get there.

Q56 Harry Cohen: Under-payments are also important because they affect the poor and vulnerable; that is at a figure of about half a billion pounds in 2008-09. How do you go about correcting them? Do you just wait for the claimant to say, "I think I have been underpaid" or do you have something else that is more proactive?

Sir Leigh Lewis: No, we are absolutely more proactive than that. We have regular reviews of samples of cases and of course if, as part of that, we come across an instance where a customer has been under-paid, we will put that right. More than just putting that right for that individual customer, we are looking the whole time at where you may have trends, where you may have types of cases where particularly our own staff may be getting it wrong, either in leading to an over or to an under-payment. Then we seek very quickly to disseminate that learning and, if necessary, change our guidance and our instructions.

Q57 Harry Cohen: Can I move on to efficiency errors? I know you have made a lot of progress and you have targets for efficiency. You have told us that you have met some of those targets. I congratulate you on that. Will they be sustained during an economic downturn? What is your feeling about that?

Yvette Cooper: As Leigh has already said, I think that they have been critical to helping us deal with and respond to the economic downturn. I think there is evidence certainly of those efficiency savings being sustained and becoming ever more important. We are continually looking at how we can improve services, make them more efficient, improve the way that we deliver things, including just different ways of using IT in the future, allowing people to apply for their benefits on-line, or sending information electronically. All of those sorts of areas allow for the possibility of greater savings and more efficient processes in future, on top of the changes that we have already made, both around the way in which we use staff time but also the way in which we use new technologies as well. Leigh may want to add about the work we obviously have under way on this.

Sir Leigh Lewis: We have a huge amount of work under way. It is worth saying that we still have an underlying efficiency challenge, notwithstanding the fact that of course we are taking on more staff to deal with the economic downturn, but we are still committed to and are required to make the underlying efficiency savings that emerge from CSR07. What is encouraging to me is that as part of our departmental change programme and our adoption over the last three years of what we call lean techniques, looking at how we undertake individual processes, I think it becomes clearer and clearer that it is possible both to increase efficiency and to deliver better service. Just one quick example of that perhaps is in our Pension Disability and Carers Service. After a lot of work, we have introduced a new service where someone ringing to report, sadly, a bereavement only has to speak to one member of the agency staff and then the information that a parent or whoever has sadly died will get put into all the parts of the agency who needed it. Previously, people were having to make up to five calls in those kinds of very distressing circumstances to tell all the people who needed to know. If you just look at that in value-for-money terms, that meant the cost of taking five calls, which is a lot of money but, in terms of customer service, it was also a very bad service to require somebody to ring us four or five times. You have to work at it but you can actually deliver better service at lower cost.

Q58 Harry Cohen: You mentioned the IT aspect and you have made savings in your IT budget. I think there is concern that the IT bill is business-related in the sense that if there are lots more customers, that bill could go up again. Are the contracts you have appropriate or do they need to be looked at as to how people operate in relation to those contracts? Is there a danger that some of those saving you have made will be lost because of the recession?

Sir Leigh Lewis: The underlying IT efficiencies that we have been making over a long period are undoubtedly continuing. If you look at our long-term trends, the cost of our IT relative to what is being provided is continuing to fall. One other thing to say - and we always touch a piece of wood at this point because we never quite know what the next day may bring - is that we have had very high levels of system availability right through this period of unemployment growth with systems being available virtually 100 per cent of the time. That is incredibly important to our staff. There will be, and we will see it this year and next year, some inevitable increases in our IT expenditure because some of those contracts, perfectly sensibly and rightly, are volume-related. If you just look at, say, telephone calls to Jobcentre Plus, they are 40 per cent up this year; now, no supplier is going to provide you with 40 per cent more capacity without any effect on price. Use of the labour market system, the absolutely key workforce of the Jobcentre Plus system, is up over 30 per cent compared with a year ago. We simply have to recognise that we are going to bear some volume-related increases in our IT costs this year and some of the extra money provided for the Department will be used to meet that. The long-term efficiency gains that we are making from our IT are continuing and will be made.

Q59 Harry Cohen: This is a bit of a technical point requiring an explanation. You provided us with a table of revised IT expenditure forecasts up to 2010-11 and you explained that the increases in the operational expenditure between 2008 and 2011 were due to increased business volumes due to the recession, but £58 million in 2009-10 and £96 million in 2010-11 are attributed separately in the table as economic downturn funding. Is that a little bit of double counting? What is economic downturn funding other than dealing with operational costs anyway?

Sir Leigh Lewis: I think, rather than be at any risk of misleading the Committee on something which has its technical aspects, I would like, if I may, to write to the Committee about that. I think, though, that there are two kinds of extra costs: one is pure volume-related costs; and the other is where you are needing to adapt or modify your systems more fundamentally in terms of what they actually do to deal with higher volumes. I think that is the distinction. If I may, I will write to the Committee because I do not want unwittingly to mislead it.

Q60 Chairman: You may not remember this but I certainly do; it is imprinted on my brain. At one of these sessions you said to the Committee that it was your ambition to have non‑qualified accounts before you retired. Does this mean that you are going to work until you are 108 or are we actually going to achieve this target?

Sir Leigh Lewis: I have not changed my ambition, Chairman, and my at least notional retirement date approaches, so the ambition becomes ever more acute.

Yvette Cooper: But we are having a review of the default retirement age!

Chairman: Maybe you need to engage the services of Sir Thomas Legg to help you to achieve it. I move on.

Q61 Greg Mulholland: Welcome to the Committee, Secretary of State. It is nice to have you here. We always really get on with our Secretary of State just as they leave. I hope that is not the case with you. Good morning, Sir Leigh, as well. I want to ask a couple of questions about the results of the staff survey, if I may. I will start by saying that clearly there have been improvements in various areas, which the Committee regards as very welcome. I do think, nevertheless, it is still worth making the point that, even though it has gone up and gone up quite considerably, we still have a figure of 38 per cent of people working within the Department being valued. In things like exams, people often regard 40 per cent as a pass mark, so anything below that is clearly entirely unacceptable. I think the more revealing figure, unfortunately, is that 62 per cent of staff working for the Department do not feel valued. Quite simply, why is the Department still such a demotivating place for people to work?

Sir Leigh Lewis: Shall I just say something and then the Secretary of State may add on the basis of her many visits to the Department since her appointment. First of all, it is the case, and thank you for acknowledging it, that the figures are improving. We are just starting our latest survey this very week, and so we are going to know in a month or so whether we are seeing further improvement or not. There is one really boring technical point to make that there are always people in a slightly curious middle group who say they do not know whether they are whatever the question is. It is not always the case that because 38 per cent say they are something and are proud to work for DWP automatically 62 per cent are not. Having said that, what do I think about this as Permanent Secretary? The figures are still in absolute terms too low, and some of them by quite a margin. I absolutely consider it a fundamental part of our leadership role to try and increase the level of engagement with our people. This is one reason for our back-to-the floor programme for example, which has been a huge endeavour. We are now running a series of programmes this year called Making a Difference, at which 7,000 of our first-line leaders will be at a day-long programme with a member of the executive team at every one talking about the Department and where it is going. Some of the history: we went through SRO4; we cut, as has already been said, over 30,000 posts from the Department. Although we were able to avoid compulsory redundancy, many people had to change job, change location, promotion prospects were less good. Inevitably, those things had an impact on the way people regarded the Department and the way they felt value. I am encouraged by the fact that the trends over now I think three successive years have been steadily improving. Although it would be a brave man to forecast a survey which is under way, I very much hope we will see further improvement, but I agree with you that some of the absolute levels are still lower than I would wish to see.

Q62 Greg Mulholland: May I make hopefully a helpful suggestion off the top of my head which is that the "don't knows" point is an interesting one. We can probably guess that those people do not feel particularly valued but do not want to say they feel under-valued. For a question like that it would be more sensible to have a scale of 1 to 5 where at 5 you feel incredibly valued and at 1 you feel incredibly under-valued. Perhaps that would give us a better idea. It might be worth considering that in the next survey. Clearly, it is general work in progress. We all desperately want to see that figure going up above 40 and above 50 and we will know next time we see the report. Let us hope that is the case. The other question on the survey I want to ask, and I am sure you will guess what this is, is about the corrected results from the question asking managers if they feel that they have the skills to do their jobs. Of course we are aware of the fact that some non-managers filled that in not realising it was for managers. When that was corrected, of course the managers have a very positive score in terms of their skills, which is excellent news. I hope you will acknowledge that that has inadvertently revealed the fact that non-managers do not feel that they have the skills to their job. The first question is: are you going to ask those non-managers, because certainly as a committee we are very concerned that that is the case. Secondly: when are you going to ask them? Assuming, as I think we can, that those non-managers do feel that they do not have the skills necessary, what are you going to do to address that?

Sir Leigh Lewis: First of all, the position is exactly as you have said. We have this slight statistical oddity which meant that the two years' results were not comparable. One result which actually is comparable and I was pleased with is that one of the biggest improvements in our 2009 survey - I am not talking about the one running now because of course we do not know but the January one - compared with 2008 was that 15 per cent more of our staff said they had the opportunity to improve their skills compared with the 2008 survey. As for the investment that we have put in to learning and development, I could certainly on another occasion take the Committee in far more detail through the range of our programmes. I think it is beginning to pay off. We have a range of programmes designed to go right through the range of our people to improve not just their operational skills and whether they have the technical skills needed to to the job that we are asking them to do, but the opportunities for them to develop. We have an early talent programme, an intermediate talent programme and an executive talent programme designed to give people the opportunities to progress through the organisation. It would take more time I am sure than the Committee would want me to spend on it this morning. We do have a skills strategy; it has been seen by Government Skills, which our sector skills body, as one of the most comprehensive in Whitehall, and it does appear to be paying dividends, but there is a lot more still to do.

Q63 Greg Mulholland: Are you going to ask the question?

Sir Leigh Lewis: One thing that has happened in this current survey is that all government departments have all joined together in a common Civil Service-wide survey in the sense that the questions are now identical for the most part right across Whitehall. That is the reason why we are having two surveys in one year, which we would not otherwise have done. This survey is the first which will have a common core of questions being asked to every Whitehall department and we can still add some of our own. I will go back and check what we have asked on this occasion about that specific area and I will drop you a note.

Q64 Greg Mulholland: That is appreciated because I think we would be keen to see that question asked of all staff. It would be helpful if you could clarify that. Could I ask a couple of questions on departmental performance? Without wanting to use the jargon, which is rather unavoidable with some of the targets, you have told us that one of the indicators for PSA8 and DSO2 cannot be assessed until the end of the economic cycle and some of the base lines for other indicators will only be set in this year's autumn performance report, or even in next year's departmental report. The measures of progress on some indicators will only be possible at the end of the CSR period, which is the financial years 2008-11. The obvious question is: why did you set objectives for performance over the CSR period that cannot actually be measured until the end of that period? Does that not defeat the purpose of setting the objectives in the first place?

Yvette Cooper: Leigh can obviously explain in a more detail the way in which we are monitoring the progress in the meantime. In general terms, there is a series of things: there are obviously lags in the data; there are things where, in order to take account of the economic cycle, that also does mean that you have to recognise that a specific time you will be at a certain point in the economic cycle, and it is difficult therefore to assess that. This was a challenging balance for us between how much you go for things that you can measure, even on a day-by-day basis, and how much you go for things which are actually the right objectives for the Department but do, as a result, take longer to measure. We do have a whole series of indicators, however, that we can use which help us get a sense of the progress, even where there are major indicators which cannot be measured until later on in the cycle. We have also been looking at additional things to monitor, for example looking at the number of people who are leaving JSA count, the number of people who are moving into things and the off‑flow rates that people talk about as other things that you can use which will monitor more swiftly what is happening in some of these key areas where there may also be further measurements that will take place later on. Leigh can provide more detail.

Sir Leigh Lewis: I have little to add to what the Secretary of State has said. There is one updating issue for the Committee about which I think the Committee has been very understandably concerned about and that is the number of PSAs and DSOs where we had not yet set a baseline for the indicator. We have made very good progress on that and we now have 23 out of 26 indicators for which the baseline has been set, with the other three due to follow pretty soon now. We are there. Then I think the Secretary of State has simply set out the position. I am not sure I can add to that seriously.

Q65 Greg Mulholland: I am asking a question about the specific progress against PSA8 because your own assessment of that is red/amber, which obviously flags up concerns. The biggest concern that you have identified as part of that is poor job retention rate of those coming off benefits. Can you give us an idea of what is being done to address that particular point?

Yvette Cooper: Obviously the overall position is affected by what is happening in the wider economy. Overall, what is important is for us to be doing everything we can to support the wider economy to come through the recession with a range of measures for the fiscal stimulus through to the specific employment support measures that we have introduced as well. One issue that we have been looking at for example is the proportion of people who leave benefit and stay off for a sustained period. There has been a downward trend since 2006. There has been a change. It is interesting that it is different if you look at what has been happening with people who were on incapacity benefit and ESA and lone parents compared to those who were on job seekers' allowance. Obviously you have people being affected by recession and maybe being able to get a short-term job but actually are finding it difficult because of what is happening in the wider labour market. At the same time, we have still been continuing to make progress for lone parents and for people who have been long-term inactive. It might be interesting for the Committee if we provide you some information about the differences between those two groups. Overall, it is harder in a recession for us to make progress around PSA8 but it is also more important for us to focus on PSA8. I think that is basically why we have provided the additional investment for the job centres but also the additional programmes of support. We need to extend the additional £5 billion investment, which I think has been critical and should not be withdrawn at this stage. We are looking at further measures which will be set out as part of the Back to Work White Paper about what more we can do to prevent the long-term unemployment, to prevent historesis as the economists would call it, in terms of the long-term scarring that can otherwise be created by a recession when people will either become inactive or long-term unemployed. So a lot of the programmes that we have introduced, for example the Young Person's Guarantee, are all about preventing that, but you are right that we need to look then at what happens to people in work and the progression in work, which is something else that we want to pick up as part of the White Paper. It is something that we built into the Flexible New Deal contract to try and get people into sustainable employment. Jim Knight has been looking at what more we can do around job centres being able to look at that longer term sustainable support as well.

Q66 Greg Mulholland: Thank you. I think we are all very aware that this area is a challenge with the recession. It would be helpful to the Committee if you could possibly clarify for us in terms those poor job retention rates or give us any indication of where those figures have been affected by those people losing their jobs through recession-related redundancy or business failure - and clearly you have said that the recession has an impact there - in a way that we would be able to determine, if it does. It would be easy to see if some of those people have gone into jobs and have lost them because of recession-related redundancy or business failure. Otherwise, frankly, we cannot be sure that that is the case and there may well be other reasons. It would be useful if you could provide us some figures on that, because that would give us an indication of the challenge that the recession is bringing. It will also give us a better idea of where the Department is succeeding or failing in terms of getting people into jobs that are sustainable.

Yvette Cooper: What would be difficult to disentangle in these figures is that you will have some people who may be taken on by a firm that then obviously has serious difficulties as a result of the recession. There may also be many companies or organisations that might decide to take people on only on short-term contracts because of the wider economic or financial climate and also just generally a more difficult labour market will affect how long people are able to stay in work. I think there will be a wide range of factors involved that would be difficult to carve up in the way that you say, but we will certainly have a look at the figure and see what more information we can provide.

Q67 Greg Mulholland: Could you drop us a note with whatever information you can provide, even if it is not necessarily in concrete figures, just to give us an indication.

Yvette Cooper: What you are trying to do, I think, is recognise that there are cyclical issues here but there are also structural issues and so can you keep on tackling the structural, long-term problems here and keep on making progress there, even while there are some short-term issues that are affecting the figures at the same time.

Q68 Greg Mulholland: A final question and this is for both of you, but particularly for Sir Leigh: just going back to the last time that you were before the Committee, Sir Leigh, if you remember, you enabled me to break Jeremy Paxman's record for asking the same question many times. I think Jeremy Paxman's record was nine and I managed to achieve, according to one press title, 14 questions asking you about the child poverty target. Unfortunately, we still did not get an answer. Of course, we have now had an announcement on that, that the Governed is not going to hit its child poverty target. In a sense, I am asking you the question again. Could you now give us the clear and current position of the Department in terms of the child poverty target, how that has changed since we last met and what the Government are going to do about it.

Sir Leigh Lewis: I think I might ask the Secretary of State to set out the Government's position. As I recall, and I do recall our exchange only too well, at the time the Government had said it was going to set out its forecast at the point of the budget, and I did not feel able to go beyond that. The Secretary of State may help me out.

Q69 Greg Mulholland: You are not going to give me another non-answer, surely, Sir Leigh?

Yvette Cooper: We have set out targets for 2010 and 2020. We also now have the legislation coming through for 2020. What we said on 2010 is that it is still 2009; we have to keep making progress, we have got to keep striving to make progress. Everybody knows that meeting that 2010 target is going to be very difficult as a result of what has happened in the wider economy and the position that we are now in. However, I think we should keep on making progress towards it. I do not think it is right to say that we should just abandon targets. We have to keep striving to do so. The measures that we have put in place in recent budget and pre-budget reports do mean that we will reduce child poverty by an extra half a million, and those have not yet fed through to the latest figures that we have. I think that it is right that we should keep on trying to do everything we can to keep making progress. Obviously, where we get to compared to the 2010 target will be assessed once those figures are in place but until we reach that point, we have to keep doing everything we can and keep working towards that target, just as we also need to be laying the ground now for meeting the 2020 target and the measures that we need to be thinking about in advance in order to reach the very strong targets that are set out as part of the child poverty legislation.

Q70 Greg Mulholland: Of course we would all agree that we have had progress but can we, please, be straightforward; can we be blunt. You are a Yorkshire MP like me and like the Chairman. We are not going to make the 2010 target, are we? Can we not just be honest about that? Yes, we want to get as close as possible. We do not know how close or not the Government is going to get. We are not going to make that target. Can we just be straightforward and honest about that today?

Yvette Cooper: Some people take the view is that basically we should say that we should abandon that target.

Q71 Greg Mulholland: I am not saying that.

Yvette Cooper: I think it is important. I think what you say about this does actually reflect what your attitude is towards it. Obviously, it is hard to predict things like the impact of the different relationship between inflation and earnings and what is happening about that in the current period, because that is more difficult to predict during the recession. We also have the measures in place. We are right to take the position which says: we all know this is going to be really difficult; we know this has got much harder as a result of the wider economic circumstances - and it was always a challenging target. I think the wrong approach is to say: now we should say we are not going to meet that target, we are just going to abandon that target and we will think about 2020 instead. I do not think that is the right thing to do. Let us assess the 2010 target when we get there but in the meantime, between now and then and between now and actually getting to those figures, what we should just keep doing is to work towards it to keep doing everything we can to make as much progress towards it as possible. Let us assess it when we get there rather than trying to pre-empt that assessment now and as a result losing the focus on 2010 and simply talking about 2020 instead.

Q72 Greg Mulholland: I did not let Sir Leigh get away with not answering the question. I am not going to let you get away with not answering the question. I think that is two or three times you have not answered the question

Yvette Cooper: That is because I think what you are asking me to do is to actually say we should ditch the 2010 target and that is not what I am prepared to do at this stage.

Q73 Greg Mulholland: No, it absolutely is not. To clarify that for you, it is not, and please do not put words into my mouth. First of all, let us remind you that it is the Government's own target that is in place. Neither I nor anyone on the Committee nor anyone else is saying that we should abandon that target. That is, frankly, a red herring. The target is there. All that people care about, and can we have a straightforward answer, is: are we going to meet that target or not? It is as simple as that: yes or no?

Yvette Cooper: I have made my position very clear, which is that I think what you are asking me to do is effectively to write off a particular target.

Q74 Greg Mulholland: That is absolutely not. I am asking you if we are going to meet the target.

Yvette Cooper: You are asking me to pre-judge.

Q75 Greg Mulholland: Are you going to meet your own targets? I have asked you five or six times now.

Yvette Cooper: You are asking me to prejudge in 2009. I think what you are asking me to do is effectively to write off a target, which I think is important. I know, you now, everybody knows that this is going to be much more difficult, but I still think it is important for us to keep working towards it and to assess it when we get there. That actually will also help us make progress towards the 2020 target as well because, in the end, that is the most ambitious target that any government has ever set. You can go and look at other countries in the world where, although they may start with lower levels of child poverty than we have, they have actually seen their levels of child poverty increase and have not set anywhere near such ambitious objectives. I think we have got to keep the pressure up. We have to keep the pressure up on ourselves, on government, but also on agencies and organisations across the country. That is why I think this is the right position to take because we have got to keep the pressure up and that is what is important.

Q76 Greg Mulholland: Yvette, there is not a single person in this room who thinks I am asking you to abandon that target. That is ludicrous, quite frankly.

Yvette Cooper: I think you should think about the consequences of what you are asking me to do.

Q77 Greg Mulholland: I do not even think you believe that. I am simply asking: does the Government believe you will meet the child poverty target for 2010, yes or no?

Yvette Cooper: I think you need to think about the consequences of what you are asking me to do. You may say that you are not asking me to write off the target. I think you are.

Q78 Greg Mulholland: I am asking you to be honest about whether you will meet the target.

Yvette Cooper: We have been round the houses several times.

Q79 Greg Mulholland: I think that is very revealing.

Yvette Cooper: I think we need to say very clearly that what we need to do is carry on making progress. It is not the right thing right now suddenly to say to local authorities or to organisations across the country who are just in the process of putting duties and obligations on as apart of the Child Poverty Bill: okay, we have eased off on the 2010 target because that is too difficult and so we are only thinking about 2020. Actually, what we should be saying to all of those organisations is: let us keep trying and let everybody keep working towards that target; we will assess how far we have got when we get there but right now everybody needs to keep working towards it. I think that is the right and responsible position for a government to take.

Greg Mulholland: I am going to leave the 14 question record intact because clearly I think we probably could exceed that but it is my record and so I am going to leave it in place because we are clearly not going to get an answer from you on that. I will give you an answer. We are clearly not going to make it. I believe you and the Department know that. We can have that on record; I think this Committee believes that the Government will not make it. That is nothing to do with whether the target should have been there, should continue to be there or not. It is simply that we believe that the Government will not make that target and we believe that you know that you will not make that target. Chairman, we are not going to get an answer any further and so on that note, back to you.

Q80 Harry Cohen: I know time is short, although Greg was asking quite an important question and maybe there can be some correspondence by way of response. What work has the Department done on marginal reduction rates in income from people going into work and coming off benefits, maybe gradually coming off benefits? Have you made some progress there? Can we have some response, perhaps in writing?

Yvette Cooper: We can certainly send you some detailed information. The overall position is that I think we have halved the number of people who face very high marginal deduction rates as a result of reforms, particularly things like tax credits but also things like the minimum wage and so on. So we have made some very significant progress. The overall impact of things like the minimum wage, tax credits, the better off in work measures and things like that has been to ensure that people are substantially better off moving into employment, although there will be families who get often thousands of pounds as a result of the tax credit system. There are sometimes people, and we have talked about housing benefit before, who may not expect to get housing benefit if they are in work. There are always issues around perception there. There is also an issue about what happens to people once they are in work as they work additional hours. Again, housing benefit can be one of the particular things that can affect that and that is why housing benefit reform I think is an important part of the next stage in this process of going further and making further improvements.

Q81 Chairman: Thank you for today and for the genteel nature in which you have conducted this and thank you for all the additional information you have promised to send to us. There may be one or two additional questions we have, which we will send, not through the usual channels because they are changing, but we have reached day 24.

Yvette Cooper: May I just quickly say thank you very much. Obviously, this is my first session in front of the Committee. May I thank the Committee for the nature of the debate; that is very much appreciated. I look forward to many such discussions in future. If you have any further thoughts about the things we were discussing at the beginning about the labour market and the initial information that I have sent through today, any views of the Committee either as individuals or from the Committee as a whole in advance of the Back to Work White Paper will obviously be very much appreciated as well. Thank you very much.