Overall comments on the strategy
In 2006/07 Citizens Advice bureaux in England and Wales advised individuals on over two million problems they had with either claiming and receiving welfare benefits and tax credits or employment problems. The changes proposed in the Green Paper are therefore of significant interest to our clients, and to our business of providing independent advice.
The volume and range of our advice work gives us a unique insight into the experiences of people living on low incomes who often experience great difficulties dealing with the benefits system and work. Our clients have a wide variety of experiences – from people with intermittent mental health problems who find it difficult to retain or find a job because employers are not prepared to tolerate the flexibility they need, or whether they are lone parents who have taken jobs and moved off full reliance on benefits only to find they are in reality worse off financially, for a variety of reasons and remain so even if they work more hours a week because of the way that benefit tapers operate.
In general terms therefore the Green Paper describes some extremely welcome goals including ensuring that those with health conditions and disabilities are never again written off and receive much better support to enable them to gain and retain employment, and renewed initiatives intended to reduce child poverty. We especially welcome the desire of the Government to address the discrimination and disadvantage which a number of groups face in employment, evidenced by lower employment rates and higher rates of child poverty. Renewed commitments to improve access to and affordability of childcare are very important – and critical to the success of the programme in relation to certain groups.
Within the Green Paper we welcome a number of the proposals, especially the commitment to a step change in support to those who are most disadvantaged in the labour market. We think that the integration of action on employment and skills is, in general terms, the right approach and that much could be achieved with the right strategy and services, and leadership, in place. In general terms the desire to have a more personalised and responsive approach through the whole system, and more support to help people stay in work is very good – although we are concerned about a number of the details.
However, the Green Paper programme is problematic in a number of areas, and needs further development of the policy. There are four key areas of concern for us as advocates for our clients. Within each of these areas there are many points of detail but we would welcome a broad discussion with DWP on the following issues.
Benefit conditionality
We do not support the proposition that a stronger focus on conditionality needs to be a key plank of the strategy. There is no evidence base that benefit conditionality and threats to take people’s benefits away will help deliver the goals of reducing child poverty and improving engagement with quality employment. We think the DWP needs a deeper understanding of the entire range of barriers to work built into the benefit system and experienced by individuals before adopting crude rules to cut benefit at certain points in people’s lives. For example, a barrier to taking up low paid work relying on tax credits to supplement earnings can be lack of confidence – with good cause - about the reliable delivery of tax credits through the whole life of a claim. There remain almost two million households each year who experience significant under and overpayments of tax credits, and in the latter case face financial instability and debt through lack of explanation and recovery regimes. And for lone parents the availability of affordable and suitable childcare remains an aspiration rather than an on the ground reality. There are many employers who will not provide the decent terms and conditions required by law, or the flexible working arrangements that parents need. For these, and many other reasons, we are firmly of the view that the proposals for greater benefit conditionality should not be introduced until and unless there have been improvements in the delivery of benefits and tax credits, access to childcare and quality of employment.
Better off in work?
We strongly support the proposal in Chapter four (para 25) that people on benefit should not be made to take a job that does not result in them being better off financially. In the case of parents this would clearly run counter to the goal of reducing child poverty and to some extent the proposals on benefit conditionality present a risk of contradicting that goal. The policy clearly needs more development before implementation. In our experience there are a wide range of influences on the assessment by an individual of whether they will be better off in work. These influences range from objective assessment, taking into account the income from wages and any benefits that may be available to support an individual in work, additional costs faced including from the loss of passported benefits and assistance such as free school meals and the operation of benefit rules, especially tapers and disregards which mean that individuals do not see either an actual or sufficient benefit from working. There also seem to be barriers to take up of benefits by those in work (see eg. the Harker report) and more could be done to bring about higher take up of, for example, council tax benefit, by those in low paid work.
We would suggest that the DWP should now focus on five key aspects which will help to design the more personalised services and avoid the risk of introducing rough and ready conditionality rules which result in people taking jobs out of fear which result in them being worse off financially.
- Understanding the full range of customer experience moving from benefits into work (Citizens Advice is publishing research with clients shortly which may provide some useful evidence in this area);
- Identifying and making changes in the benefits system so that people are more likely to be better off in work and rules align better – a key area for attention should be the interaction of housing and council tax benefit with the tax credits.
- Designing an appropriate holistic scheme for judging whether claimants would ‘better off’ in work – taking into account the impact of loss of passported benefits.
- Improving and simplifying the delivery of the full range of benefits, and tax credits that support people in work, and their children, including disabled children. This would involve more systematic partnership working between Jobcentre Plus, HMRC and local authority housing benefit departments.
- Promoting take up of the full range of benefits which support people in work – this will involve improved competence and knowledge on the Jobcentre plus frontline, partnership working with local authorities and HMRC and also the voluntary advice sector.
The challenges – specific groups
We support the identification of specific groups who experience the most difficulty securing appropriate employment – people who are long term sick and disabled, lone parents, older people and people from ethnic minorities. We note in particular the focus on Pakistani and Bangladeshi communities, and appreciate the evidence of higher levels of child poverty found in these communities.
We think that there are a number of other groups which the DWP programme could specifically and more prominently include, particularly in looking to influence employers’ attitudes.
First is the large number of people with mental health problems, in relation to whom the Department of Health instigated a programme designed to tackle stigma and discrimination (Shift) – to the extent that this programme persists its activities need to be joined up with those of DWP. Chapter five refers to some pilot programmes on employment outcomes for people with mental health outcomes but is silent on how any of the learning will be mainstreamed.
Second people who have criminal records, many of whom these days are young black men. Employment reduces the likelihood of re-offending by between a third and a half – but 75 per cent of prisoners leave prison with no job to go to. Over half of employers said, in a CIPD survey, that nothing would persuade them to recruit people from the core jobless groups including people with criminal records. Given the extent of re-offending, the huge cost to the public of re-offending, and keeping an individual in prison there should be a strong driver from Government to improve employment amongst offenders. Action by NOMS in this area on reducing re-offending could be assisted considerably by DWP’s proposals to engage with employers. It is not clear in the Green paper that this group will be within the scope of DWP activity.
People within the specific groups identified in the Green Paper are often experiencing active discrimination by employers, service providers and members of the community at large. We therefore very much expect to see the DWP engage with the Equalities and Human Rights Commission in taking forward the programme.
Quality of employment – quality of employers
As the Green Paper rightly makes clear working with employers will be crucial to securing more employment for people on benefit. More widely the strategy will only succeed if there are jobs, if they are jobs that genuinely make people better off working than on benefit, and if those jobs are sustained over time. We note, and welcome, the moves to create partnerships with major employers in a variety of sectors under a jobs pledge and to work in different ways with them.
However, as the programme of engagement with employers rolls out and DWP inevitably reaches beyond the large firms identified in the Green Paper it will become harder to secure larger numbers of jobs to feed the programme. DWP will also encounter a more diverse range of businesses, especially businesses under pressure in the low wage economy. We would urge DWP to ensure that in seeking to identify as many jobs as possible (so as to meet its numerical targets) it also ensures quality of employment. To do this it will need to exercise judgement and influence over employers, on behalf of government as a whole, to secure improvements in employer practice and policy and greater compliance with employment law, especially a range of minimum rights relating to statements of terms and conditions, working time, paid holidays and parental and maternity leave, flexible working, discrimination and grievance procedures.
There is extremely well documented evidence of problems workers face in many low wage or ‘flexible’ sectors achieving their rights at work. For example there is widespread discrimination by employers against pregnant women, (see for example the Citizens Advice evidence report Hard Labour (2005) and the EOC investigation into pregnancy related dismissals). In a series of reports we have extensively documented the problem of unscrupulous employers who are not complying with employment law, and the difficulties that vulnerable workers have in enforcing their rights.
We would like to see a positive declaration by the DWP that the programme will not ‘force’ people into jobs with employers who are not complying with the law, and should not sanction them by denying benefits if they have to give up a job due to non-compliance by the employer. We would encourage the DWP to consider how this could be achieved without first requiring an individual to obtain an employment tribunal decision. Discussion with the team at BERR investigating the problems faced by ‘vulnerable’ workers, and exploring possible solutions, would be helpful.
New delivery methods and the capability of DWP
The Green Paper makes it clear that a major transformation of policy and delivery is envisaged. The Green paper requires a significant change on the part of DWP and Jobcentre plus in the way that it engages with local actors from employers to local authorities, and devolved administrations who are seen to have a key role in influencing local economic development strategies. It is not immediately clear to Citizens Advice where the capacity to engage, lead and influence will come from, particularly following the recent significant reductions in staffing within DWP agencies. Our evidence simply relating to consistent and effective liaison and communication with advice agencies about changes in service delivery by Jobcentre Plus over the past couple of years suggests that a lot of development would be needed.
And genuinely integrating delivery of action on improving skills, employer attitudes and benefit support will be extremely challenging to deliver.
Together with the emphasis on personalisation, and diversification of delivery mechanisms through contracting DWP and Jobcentre plus will need to adopt very different ways of working with customers and partners. Simply bolting on a set of geographically varied contracted out services does not deliver a seamless experience for the customer.
There is also a considerable risk of the development of postcode lotteries – with some geographical areas delivering excellent programmes, and others not. There is potential for this variation to get into the system not only from contracting and greater reliance on a variety of external providers but also in the area of developing partnerships with the skills sector and employers. We can also envisage the risk of some areas taking different approaches to customer service and individuals’ entitlements to both support and benefits. Simply from the perspective of the independent advice sector it will become more difficult for us to advise people accurately on what they can expect, and what their entitlements are, if this varies locally. More widely variation and increasing discretion, and the growth of contracting out of programmes, will make it extremely difficult to divine objective measures for the effectiveness and fairness of the system of welfare benefits and decision making which DWP is accountable for.
Overall we are extremely sceptical about the capability of DWP, and Jobcentre plus, to deliver such a sophisticated and risky programme, and to do so consistently and well. The Green Paper highlights that more work is needed to develop an approach to contracting. We would like to see within that a much stronger focus on ensuring minimum standards – not of conditionality (page 60, para 19) but of delivery. There also seems to be a need for development of appropriate leadership and external engagement structures in DWP and Jobcentre Plus.
Consultation questions:
Lone parents
Question 1: At the moment, lone parents are entitled to Income Support until their youngest child is 16. Is it right that this age should be reduced?
There is a clear need for providing more support for lone parents not less. In the past CABx have helped many clients who have had very little contact with the labour market for years and suddenly find themselves totally unprepared when their youngest child reaches sixteen and they are simply told their benefit will stop. We agree that regular contact with Jobcentre Plus throughout the period of claiming benefits is helpful in ensuring that claimants are ready for work when their circumstances mean that they are able to.
We do not support the view that moving lone parents to Jobseekers’ Allowance is the best way to provide the extra support required and do not support the case for extra conditionality. Considerable success in increasing the proportion of lone parents in work has already been achieved. There is no evidence to suggest that further growth in the employment rate is limited because of an unwillingness to engage. One Parent Families point out that 66% of parents with children over eleven are already working and of those not working and claiming IS, one quarter are caring for a disabled child and one half have a health condition or disability1. The Harker report concluded that greater conditionality was only appropriate in the context of better support and childcare: ‘if a stronger package of support for lone parents was in place and lone parents genuinely had access to affordable childcare and work that fits with their family commitments, there would be grounds for extending conditionality.’2
Citizens Advice Bureaux report that many parents are eager to return to work but are prevented from doing so by a number of barriers including:
- Extra costs associated with doing so will not be met by the relatively small increases in their income.
- Lack of access to childcare appropriate for their needs.
- Lack of confidence in the ability of the benefits and tax credits systems to adjust to changes in circumstances, preventing gaps in household income when parents move from benefits into work. Bad experience of moving into work will damage confidence to move off benefits again.
- Lack of flexibility on the part of employers to enable them to combine their family commitments and travel needs with work.
- Lack of training to help develop skills to help the move into sustainable work, improving job prospects in the longer term.
Citizens Advice believes that the policy needs to be based on a better understanding of and a focus on addressing the barriers to engagement in the labour market to achieve greater success in achieving the lone parent employment rate of 70 per cent and the overall employment rate of 80 per cent.
In addition we are concerned about the potential under the JSA regime for sanctions to be imposed on lone parents who have had to leave work if they were unable to juggle work and childcare arrangements. Claimants sanctioned under the JSA regime can lose all their benefit and must apply for it to be restored up to 60 per cent of the original level. Income support claimants can only lose 20 per cent of their benefit in order to protect the household income and the needs of the children. The potential loss of all benefit income is counterproductive to the child poverty agenda.
Question 2: What would the minimum age be?
We have already said that we do not support the need for conditionality. Should the government decide to go ahead, factors other than the age of the youngest child must be taken into account when deciding to move someone to JSA. The paper gives welcome recognition that the extra caring responsibilities of some lone parents will make it appropriate for them to remain on income support. Recent interviews conducted by Citizens Advice with lone parents highlighted the extra difficulties faced by parents with three or more children particularly when they too often found that each child had to be taken to different childcare facilities. We suggest that the number of dependent children that a lone parent is responsible for is relevant in deciding whether work is appropriate.
Question 3: Should we do more to ensure that our support for lone parents is accessible and useful for all groups, in particular those with disabled children and those from certain disadvantaged groups and areas?
As the majority of lone parents with children over eleven and not already in work have additional needs or responsibilities, then it is imperative that support is designed to take their needs into account. Where they care for disabled children, the need for appropriate childcare must be recognised and parents with health problems should be able to access the same sort of support that ESA claimants have access to.
Question 4: More frequent Work Focused Interviews are currently offered to lone parents in the two years before their eligibility to Income Support is lost. As the age of the youngest child is reduced, should other forms of support be provided, and over what period prior to loss of eligibility?
Lone parents should have opportunities to access skills assessments in advance of any move to JSA. Adequate childcare must be available to ensure that they are able to take up opportunities for training courses.
Question 5: For lone parents who move onto Jobseeker’s Allowance when they lose Income Support eligibility, what forms of support (in addition to those provided to Jobseeker’s Allowance claimants who are not lone parents) should be available, and over what timescale?
Question 6: Jobseeker‘s Allowance recipients can, in certain circumstances, restrict their search for work to a minimum of 16 hours per week. Should additional flexibilities be available if the proposed changes are made?
Question 7: What form might a ‘better off in work’ assurance for lone parents take?
The government’s commitment to provide lone parents with calculations of what their income from work will be and not to push anyone into a job which will result in their families being worse off is of course very welcome. But calculating whether or not someone will be better off and what their financial circumstances will be is a complex assessment. It depends on a number of individual circumstances and it is important that the full range of factors are accurately taken into account and explained to claimants.
CAB advisers suggest that while some people are considerably better off in work, many gain only about £30.00 and sometimes as little as £10.00. The subsequent loss of passported benefits such as free prescriptions and free school meals, together with extra travel costs associated with working can completely wipe out these small gains. If a lone parent is in receipt of child maintenance they can be significantly better off in work as it is ignored for the assessment of tax credits and housing and council tax benefit.
Better off calculations used to assure someone that they will be better off in work must include as a minimum: an assessment of the loss of passported benefits; extra travel costs; childcare costs not met by working tax credits; and the drop in tax credit income in the second year of return to work because of the impact of the £25,000 income disregard in which only applies in the first year of returning to work. The process should also identify and assist with claims for housing and council tax benefit and any other local assistance such as school uniform grants.
Question 8: Are any special provisions required for lone parents who move onto benefits other than Jobseeker’s Allowance (for example, Employment and Support Allowance or Carer’s Allowance)?
Question 9: In addition to the improvements in childcare provision and the right to request flexible working, is there further support that should be provided to help lone parents into work and support them whilst there?
Question 10: What more could we do to help working families – especially those from the most disadvantaged backgrounds – improve their earnings and lift themselves out of poverty?
Flexible working. The introduction in the Work and Families Act of the right for parents and carers to request flexible working has been a valuable recognition of the challenges families face in juggling work and family commitments. To qualify for this right, children must be under six (or if disabled under eighteen). The right to request flexible working would not therefore help the lone parents required to return to work by the new proposals. We recommend that the right to request flexible working be extended to all parents with dependent children and in fact believe that there is substantial argument for the right to be extended to all workers.
Training and skills and the need for flexibility
Short term work, low pay and poor qualifications are associated with insecurity in the workplace. Poor skills can trap people in low paid work with little prospect of increasing their income over time or unable to move into work because low paid jobs of varying hours do not compete with the stability of benefit income.
Citizens Advice welcomes the proposed ’closer integration of employment and skills provision’ and ‘faster access to the right training’3. However, we strongly recommend that allowance is made for and account is taken of people’s personal efforts to pursue training. Citizens Advice evidence shows people are often pushed into jobs with low sustainability when they would be better off training for skills which in the longer term would bring higher incomes. Undertaking training courses should not automatically be seen as secondary to taking up a low paid job. Recent interviewees indicated that a lot of lone parents who decided to train to improve their earning power often get little or no help in doing this. CAB evidence highlights the failure of New Deal programmes to be sufficiently flexible to meet the needs of Jobseekers. Some CAB clients keen to move into sustainable work and actually engaged in work-related activities felt that intervention from Jobcentre Plus was actually counterproductive as it was not sufficiently flexible.
A recent client on a business administration course was told that she would face sanction if she did not accept a volunteering placement as part of New Deal. It clashed with her course but they could not take account of her hours in college or that she had exams coming up.
Another client was working ten hours a week but told she had to give it up to attend the ‘intensive activity’ period of her New Deal scheme. She took a long time to get her job, loved it and did not want to give it up voluntarily. She hoped the hours would increase soon anyway but Jobcentre Plus said she would be in breach of availability conditions if she did not go on the training course.
In-work support. Securing employment is only the start. CAB evidence finds that many people find it difficult to juggle their work and home responsibilities and continued help from their personal adviser after they moved into work could provide important help during the transition period.
Free school meals and budgeting loans. The loss of free school meals can significantly reduce any financial benefit a lone parent can gain from moving into work. We recommend that the Government consider extending eligibility to free school meals and to social fund budgeting loans to families in receipt of working tax credit. This would ensure that any gain from work is not automatically wiped out by loss of entitlement to this help.
Question 11: What more could we do to help ethnic minority women, particularly of Pakistani and Bangladeshi origin, overcome specific barriers they face?
In the preparation of this response we undertook a number of interviews with clients from BME communities in specific CAB outreach projects. Whilst the numbers we spoke to overall were small they highlighted several areas which we believe need addressing if the employment rate for these groups is of people is to be increased. To effectively increase the employment rates of specific ethnic groups, we believe the Government needs to tailor their support to address cultural as well as language barriers.
Outreach services. To reach many of the hardest to reach groups within the BME community, Jobcentre Plus need specialist outreach workers working within and trusted by the communities they are seeking to support. A CAB adviser working specifically with Asian Muslim women highlighted the difficulties she found in providing advice and support to this group. She stressed how family and community authority and control limited access for these women to services provided by agencies and organisations outside of their community. It was primarily these factors rather than education, training or language that determined whether or not they worked.
Language was still an issue for some clients interviewed at Vietnamese and Somali outreach projects. Some of the women had worked but in restaurants where English was not needed. They were now learning English but finding it difficult and believed it was inhibiting their opportunities to find better paid jobs. Some also expressed fears that if they moved into work they would have to pay to complete their English courses themselves.
Question 12: In exchange for more specialist support, are we right to ask more of those who have been unemployed and receiving benefit the longest?
Question 13: Should there be any exceptions to this approach of increased conditionality and increased support?
Question 14: Is a structured, progressive regime of support and conditionality at fixed intervals the right approach?
Question 15: Should some people be enabled or required to enter the Gateway stage more quickly than others, taking account of their employment history or needs? Which groups should be ‘fast-tracked’?
Question 16: Should we require a period of work experience from those who do not succeed in getting work after benefiting from a more intensive level of help from specialist providers? How can we best ensure that this work experience is beneficial?
We repeat our earlier comments that we do not believe that increased conditionality is necessary to ensure greater engagement with support provided by Jobcentre Plus. If training and skills programmes are sufficiently resourced and genuinely providing claimants with new opportunities to develop their experience and skills, increased conditionality should not be necessary. If support with basic skills is identified at the start of a claim for benefits training should be available as soon as is appropriate and the claimant should not have to wait until the Gateway stage.
Social Policy contact: Katie Lane Katie Lane
1. One Parent Families website, Lone parents and employment conditionality
2. Harker, L, Delivering on Child Poverty: what would it take? A report for the Department for Work and Pensions, November 2006
3. In work: better off, Executive summary, para. 45.
|
