Welfare Reform Bill

My Lords, it is a great privilege and pleasure to follow the noble Baroness, Lady Hollis. Her experience in the department has stood her in good stead; she is an expert in these matters, and her penetrating and skilful analysis, particularly of the risks involved in this piece of policy-making, is essential to its success and will repay careful study. I should like to detain the House for a moment on the politics of the measure. I absolutely agree that active labour markets and the policy of having work for those who can and security for those who cannot were perfectly reasonable, sensible and beneficial policy changes that came in after 1997. Call me old-fashioned, but I imbibed with my mother’s milk the idea of the social insurance principle. People paid in and, during periods of adversity throughout their life, they got help from the state. After 1997, the Labour Government moved subtly away from that. There may have been good reasons, but it was done quietly, and I do not think that there was enough debate. I was perfectly happy to make the best of ““work for those who can and support for those who cannot””, but there is some evidence that the ground is shifting yet again, and we should be careful about that. Only a few days ago, Mr Murphy, the Minister of State at the department, made an important speech—important enough to go on the departmental website—which moved away from the adage of ““work for those who can, support for those who cannot”” to ““work first, benefits second””. I am not a conspiracy theorist, but that makes me deeply suspicious. If he is setting out a change in the thrust behind these policy measures, we may be moving into territory where people have to go on to a programme or a job or undertake some sort of training before they get any benefit at all. I will be pleased to be told by the Minister or somebody that I am overthinking this, but, if that kind of philosophy is adopted, when the Bill— support it as I do—is eventually implemented, the environment could be very different. I hope that in the course of this evening’s debate and in Committee we can clarify whether a new dimension and a new perspective are being brought to the philosophy that underwrites some of the policy. As has been said by other people—indeed, it is the only thing about which I disagreed with the noble Baroness, Lady Hollis—conditionality is deeply worrying. Administrative systems of that kind are contrary to natural justice, have unintended consequences and result in a degree of complexity from which we are already suffering too much. Bills of this kind should always have a simplification clause, as standard. There are some simplifications in the housing benefit aspects of the legislation, which are welcome—but not much else. I hear that the department is now thinking of predictive data techniques to speed up benefit claims, but there is a world of difference between having techniques to manage complexity and getting a simpler system in the first place. There should be a rolling programme of simplification measures, and the Bill does not have enough of them. The role of the private sector will be distinctly different in the implementation of the legislation, and I am particularly interested in the Minister’s view of what Sir John Freud will bring to that agenda, because I hear that he takes the view that private sector companies could easily enter the field and increase efficiencies in the roll-out of the administration. I hope that the Minister will advise Sir John to go and talk to the managing director of Capita, who had some very inelegant experiences administering housing benefit systems for some of the London boroughs in the not too distant past. The department is in pretty bad shape right now. It is an excellent department, and the professional staff are all admirable people, but it has suffered from a series of circumstances that cannot be ignored if we expect success in the deployment of this policy. The Gershon efficiency savings are taking a toll. The absence and sickness rate in the department itself—rehabilitation systems and processes—is terrible, and the departmental record in absence management has been chronically bad for a long time. In addition, the department faces a 5 per cent efficiency saving cut, which is being worked on now. At the same time, the comprehensive spending review to be completed later this year will take effect but will probably not make things any better. The frequent changes at Secretary of State level, with six Secretaries of State in the past 10 years, have led to incoherence. The department has suffered in that regard, and we have to take all that into account. Staff morale at all levels in the department is low, particularly at a local level. In my area of south-east Scotland, the former integrated local office based in Galashiels, with 45 to 50 loyal, professional and high-quality staff, is being replaced by a supermarket—it is now a branch of Tesco. The staff are being relocated to new offices and being given no assurances at all about long-term established work, so they are finding other work because they are able people at the end of their tether. That background cannot be ignored when we are making policy changes of the kind that are contained in the Bill. There is a series of operational factors that the department must address. We look forward to going through those systematically in Committee. I have been scarred by my own experience, and I have no alibi, because I was there when we debated the initial legislation on child support in 1991. The noble Baroness, Lady Hollis, spent most of her departmental career trying to fix the mess. It was not her fault that the thing got into such a fankle, to use one of my granny’s favourite Scottish words. The combination of two things concerns me. First, the House may know that the DWP abandoned the benefits processing repayment programme last year. Noble Lords may not know that that was a fundamentally important set of processes that underpinned the new employment allowance that this legislation introduces. The department’s investment strategy programme, published for the years 2005-08, declared that the BPRP was, "““a core Information Technology Platform which will provide a lasting foundation for modern, flexible IT solutions which support business priorities, including improved service for customers and employers, reducing the operating costs of legacy systems, efficiency savings and improved programme protection””." According to the press, the Government wrote off £141 million as a result of the abandonment of that programme. The good news, as, I am sure, the House would like to know, is that those who administer Jobcentre Plus believe that only £70 million was lost because some of the work can be recycled and salvaged. I hope that it can. That measure underpins the roll-out of the IT platform in Part 1 of the Bill. Almost simultaneously with that measure, the department asked for aSection 82 power, under the Welfare Reform and Pensions Act 1999, to spend in advance of Royal Assent. As the House probably knows, the department is, unusually, spending money already on this IT platform before Royal Assent—there are powers to do that, and it has gone through in the other place. I cannot but think that those two things are connected. The last time that the Section 82 power was used was to bring forward an IT platform for the CSA, so the auguries are not necessarily good. Was the timing of those two things consequential on one another? Was the Section 82 consent asked for because the benefits processing repayment programme was abandoned? If that is the case, I wonder whether the 22-month programme that was set in place by the Section 82 consent, which has been three months in gestation since the authority was given, is realistic. We have been here before with other IT platform programmes. It is a politically driven programme, and it is far too challenging. If it does not work, does A-day still happen on 1 April 2008, or does it move to November 2008? When it happens, what does ““up and running”” mean? Does it mean that the platform will be available to every front-line adviser on the day when the scheme is rolled out? Now that Jobcentre Plus has had that extra time since it got the consent for the spend under Section 82, can the Minister say whether the spend is up to programme or is it slipping further behind? The department estimates that it has foregone ““only”” £70 million of the BPRP. Is there anything that can be salvaged from the remaining £70 million? I would dearly like to know whether efforts are being made in that regard. The department said that it was going to put a plan into effect to ensure that the most was made of the salvaged elements to deal with the legacy systems. Will the Minister undertake to share with us in Committee the details involving the underpinning IT provisions and operational platform for this new, important allowance? My experience suggests that, if he does not, the whole house of cards could tumble down because of operational difficulties because the computers do not work. If that happens this time, it will be a tragedy, and there will be no excuse, because Ministers could not say that they were not warned.