Welfare Reform Bill

moved Amendment No. 75: 75: Clause 15, page 12, line 30, leave out subsection (1) The noble Lord said: I return to probing. This is a probing amendment which will give us the opportunity to discuss the many questions and concerns which have arisen out of the contracting-out of assessments and support provision to third-party groups, both not-for-profit organisations and private companies. Many people feel that the provision of benefits and support for disabled people should remain under the direct control of government and should not be privatised out to less directly accountable bodies. These concerns are shared by the Joint Committee on Human Rights, which called the attention of the House to this clause in its report on the Bill. However, we on these Benches are not entirely pessimistic. Tendering out these jobs could lead to great advantages in terms of effectiveness and the standard of service offered to claimants. There are, however, legitimate concerns about the finer details of the contracts, and we hope that the Minister will offer strong reassurance on them. One of the greatest concerns is that third-party organisations might be tempted to cherry-pick claimants who need the least support to make them capable of work. The Government have already done much to reassure us on this matter, but some questions remain. In particular, the breakdown of how payment will be awarded has led to controversy. The Government have explained that they intend to pay contracted organisations in three separate chunks: 30 per cent up front for administration costs when they take the claimant on to their books; 50 per cent when the claimant reaches certain job outcomes; and the remaining 20 per cent after the claimanthas remained in work for a sustained period. Unfortunately, this information has led me to think about even more questions. The explanatory material that we have received states that the initial 30 per cent will be paid in monthly instalments. How will these instalments be calculated, given that it is impossible to know how long a claimant will need before he reaches the first of the outcomes and so triggers more financial reward? Will not a claimant who seems likely to make slow progress towards an outcome therefore attract a lower monthly instalment than one who is closer to employment, and will not that in turn make organisations less willing to take him on? For the outcome-based payment, the material begs the question what exactly these outcomes will be. Will they be set individually for each claimant and, if so, by whom? There would surely be a conflict of interest if the personal advisers, based in the contracting organisations, set the benchmarks that the claimants had to work towards. Yet, if they are standardised outcomes, there is again the danger that claimants with a lot of ground to cover will be too expensive for the contracting organisations to take on. The potential contractors to whom I have spoken have stated that, rather than have set levels to reach, they would prefer payment of the 50 per cent instalment to be based on measured improvement. Will the Minister explain why the Government have decided not to go down this route? Finally, on the last 20 per cent, I understand that six months has been suggested as a sensible amount of time for the claimant to have been in employment for it to be considered ““sustained””, which I think is the word used in the explanatory material. Does the claimant just have to be in work or must he be completely off benefits as well? If, after six months, he were then to become unemployed again and rejoin ESA, would the organisation handling his claim receive the 30 per cent initial payment all over again and would the payment process restart from that point or would the contractor’s past involvement be taken into account? Would the newly out-of-work ex-claimant necessarily have the same personal adviser, or even the same contractor? That is quite important. I look forward to hearing the Minister’s response to these questions. I hope that he will do much to reassure the many organisations that have contacted me on these points. I beg to move.