My Lords, as far as I am concerned this is an important debate on an important amendment and, indeed, it is an important suggestion that we should have a review of the sanctions regime. Most colleagues already know this, but I am a non-executive, non-remunerated director of the Wise Group, an intermediate labour market provider in Glasgow that is subcontracted to the Work Programme, so I have had experience of some of these matters. There are difficulties that need to be ironed out and I hope that this review will take the opportunity to do just that.
I strongly urge my noble friend on the Front Bench to pay careful attention to what is being said, although I think that the amendment is a little ad longam to put in a Bill. I am with the noble Lord, Lord McKenzie, in spirit, but I am not sure that the amendment is necessary. I think that we get the point that he is trying to make—I certainly do.
To the need for a review in this amendment I would add the question of the costs, which have been calculated as a maximum of £130 million. At the risk of being pedantic at this time of night—and I apologise to the House—I refer the Minister to page 6 of the impact assessment and Annexe A on the methodology of the calculation. Paragraph 18 describes the total value of the money allegedly at stake in this Bill. Frankly, I cannot understand it, but that may just be the hour of the morning. It states that the total value equals the number of sanctions multiplied by the number of weeks, although, in passing, I have to say that sanctions are variable in weeks—they are not all fixed-week sanctions, so I do not know quite how you can multiply by a number of weeks when they vary. That is multiplied by the percentage of cases of under-25s multiplied by the rate for under-25s and the percentage of cases of over-25s multiplied by the rate for over-25s. However, the final clause puzzles me, because that total value is,
“multiplied by reduction due to successful appeals and hardship”.
You have a multiplier multiplied by a reduction. Either my arithmetic is not good, which it is not, or the language in that paragraph is wrong. If the language in that paragraph is wrong, I would like to be told, because that is what we are being invited to consider as the potential cost to the taxpayer as a result of these changes. If the impact assessment has not got the methodology of the calculation correct, it would be good to know.
My other point is about recompliance. My experience in the Wise Group is that although many of these sanctions are originally set at, say, 26 weeks, the participant in the programme gets the message that they are going to lose out rather quickly and they come back into compliance. They are therefore reduced from a 26-week penalty to a four-week penalty as a matter of course. I do not know to what extent that is factored into the calculation of the total value. There are a number of methodological problems that I do not understand. One of the things that this report should do—I am not suggesting for a moment that we need answers to all these things this evening—is to look carefully at exactly what the total amount at stake in this Bill is. We look forward to getting that confirmed one way or the other.
Briefly, my view is that the Work Programme was introduced with indecent haste. The flexible New Deal programme was in the middle of its operation and in 2010, in a very short space of time, everything was changed. I understand the need to take away everything that went before, but everyone I now talk to tells me that the loss of corporate knowledge is a difficulty in working with the department. A lot of serious and expert people are no longer in the positions that they had. Bringing this programme in so early and losing such a lot of corporate knowledge over a short space of time is bound to lead to symptoms and consequences of this kind.
Part of the problem generated by these sanctions is that the notices that are given to participants in these programmes are often handled not by prime contractors but by subcontractors. I do not believe that some of them are authorised by the Secretary of State as they should be under the Jobseekers Act 1995, which is part of the reason why some of these notices are not detailed and informative. Therefore, it does not surprise me that the court took the view that it did. That is something that this review should be looking at as well.
Finally, one thing that I am clear about from my Wise Group experience is that a lot of participants in these courses do not appeal against sanctions because they cannot do without the benefit for the duration of the pending appeal—it is a serious loss of money to them. I hope that this will be investigated in the review, but we really need to look at whether the sanctions are being properly scrutinised in terms of the numbers who go to appeal. I think that people just throw in their hand because they cannot afford to do anything else.
In conclusion, there is a lot of important work to be done. I hope that the review will be serious in undertaking that work and making the results and conclusions available to the rest of us so that we can get this sanctions regime better adjusted for future use in the jobseeker’s allowance regime.
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