Work and Pensions Committee
Oral evidence: Benefit freeze, HC 1983
Monday 11 March 2019
Ordered by the House of Commons to be published on 11 March 2019.
Members present: Frank Field (Chair); Heidi Allen; Neil Coyle; Rosie Duffield; Ruth George; Steve McCabe; Nigel Mills; Chris Stephens; Derek Thomas.
Questions 1 - 148
Witnesses
I: Rt Hon Amber Rudd MP, Secretary of State for Work and Pensions, Neil Couling, Director General, Universal Credit Programme, and Donna Ward, Policy Director, Families and Disadvantage.
Witnesses: Rt Hon Amber Rudd MP, Neil Couling and Donna Ward.
Q1 Chair: Amber, welcome. Might you begin by introducing yourself, for the sake of the record, and your colleagues can then do likewise?
Amber Rudd: Thank you very much. I am Amber Rudd, Secretary of State. I am looking forward to answering your questions, Mr Chairman.
Donna Ward: Hi, I am Donna Ward. I am Policy Director in DWP. I am responsible for children, families and disadvantage, and I lead the poverty work within DWP.
Neil Couling: I am Neil Couling. I am the Director General for the Universal Credit Programme.
Q2 Chair: Amber, we have been told you might like to make a statement on managed migration.
Amber Rudd: Yes.
Q3 Chair: Might you do that at the beginning and then Neil will begin our questioning. Thank you.
Amber Rudd: Thank you very much for that opportunity. Obviously, there has been a lot of interest in what progress we are making with our managed migration pilot. We have decided to go ahead and do that in Harrogate and that is being set up for early piloting as soon as possible. We have chosen them because they have had Universal Credit for three years. They are an experienced Jobcentre. They are an area that has both urban and rural claimants, and we will be making sure that we have the opportunity to test and move as many as possible in an effective way so that we can learn and demonstrate the success of managed migration.
I wanted to let the Committee know, before it is announced elsewhere, that we have chosen where we are going to be doing it and the progress that we are going to be making towards it.
Chair: Thank you.
Q4 Neil Coyle: An interesting choice in Harrogate. You say three years’ experience. As you know, London Bridge Jobcentre is the training centre for Universal Credit and has a bit more experience. I am surprised that—given every single time we get a new Secretary of State or other Ministers in the Department they are brought to London Bridge—Southwark has not been part of this but, also, how you will iron out mistakes, including those I see from London Bridge Jobcentre Plus every week.
Amber Rudd: You are absolutely right that London Bridge is an excellent Jobcentre and it has been a pleasure to visit it. I am sure that you will appreciate, Mr Coyle, that it is one of the best places in terms of Universal Credit and actually has some great job coaches there as well, so that is one of the benefits of it.
We looked at a number of different places to start the pilot. There were various reasons for choosing Harrogate and I am sure, if you would like him to, Mr Couling can tell you a bit more about it. We are starting there. There may be other ones as well, so you don’t need to rule out London Bridge yet.
Q5 Neil Coyle: Before we hear from Neil, this is a pilot of a managed migration after many years of Universal Credit. There has still not been an explanation for exactly the pilot we are doing differently but, perhaps more importantly, when will the revised regulations be brought to this House for a vote?
Amber Rudd: They will be brought by July. We will be making the case then and setting out what our plans are in more detail for the pilot.
Q6 Neil Coyle: Is that contingent on anything that is said on Wednesday?
Amber Rudd: I certainly hope not. Whatever is said on Wednesday, we need to go ahead and do Universal Credit in a way that supports people.
Q7 Neil Coyle: This Committee has made clear that we are very concerned that there are people who will fall out of the system all together as a result of Universal Credit changes, about the delays and about the opportunity to scrutinise those plans, so the sooner we have them the better.
Amber Rudd: I agree.
Q8 Neil Coyle: Can you tell us a little bit more about how the Department plans to safeguard the 1.6 million who move on through natural migration, irrespective of any piloting or managed migration?
Amber Rudd: The natural migration, as we refer to it, will be going ahead this year as you rightly say. Managed migration is a completely different challenge because we need to make sure that, as you have said, rightly, the Select Committee is concerned that nobody falls between two stools. That is also my concern—particularly the most vulnerable—and that is one of the key things I am going to want to make sure that we demonstrate we can do from the managed migration. The natural migration will continue, as it has been, with the improvements that have been put in place over the past few years.
Q9 Neil Coyle: We are, what, five years in and you are beginning a new pilot to see how Universal Credit works?
Amber Rudd: It is not to see how it works. It is to make that we move people who were on the legacy benefits on to the new system.
Q10 Neil Coyle: Well, let’s hear Neil’s assessment of how things are going.
Neil Couling: The pilot itself is about learning the most effective way to move people safely across from legacy benefits to—
Q11 Neil Coyle: After five years?
Neil Couling: We have not tried moving anybody who hasn’t had a change of circumstance. There have been lots of concerns expressed by many stakeholders about the risks to people of doing that, so the reason for piloting is to learn with small numbers so that we do not inadvertently create mistakes that go on at volume.
Q12 Neil Coyle: When do you expect Universal Credit to complete its rollout across the country?
Neil Couling: December 2023.
Neil Coyle: Still?
Neil Couling: Yes. It is complete in terms of it is everywhere in the country but to get everybody—who is currently on a legacy benefit who could be on Universal Credit—across that will be December 2023.
Q13 Neil Coyle: How does any learning from Harrogate or elsewhere, as the pilot is extended, feed through in terms of the technical changes that we know have taken years to deliver on other changes?
Neil Couling: What we are testing and what we are seeking to learn is the most effective way of moving people across. That will be an iterative exercise, so we are testing something that we have called Who Knows Me? That is attempting to use stakeholders and partners—because they may know the claimants better than we do—to help us ensure that they move safely from legacy benefits over on to Universal Credit.
Q14 Neil Coyle: Again, this is five years in you are talking about learning the best and most effective way to move people across, so what message are you sending to the people who have already been moved across without any question about how effective it has been?
Neil Couling: They have come across through a change of circumstance. There is no legacy system for them to have that change of circumstance in any more. We have moved the resources from that legacy system over into Universal Credit to handle those volumes.
By the way, it is actually not 1.6 million people coming across in the next year through a change of circumstance to Universal Credit. Your previous witnesses on that just made an actual error. I think they managed to amalgamate the number of new claims with the change of circumstances.
Q15 Neil Coyle: How many will it be this year?
Neil Couling: It is hard to give a precise estimate because obviously it depends on the number of change of circumstances that occur in the period—and that in itself could be determined by economic and other factors—but roughly half of the caseload growth is through a change of circumstance and half is through a pure new claim to benefit.
Q16 Neil Coyle: A change of circumstance could be moving house as a result of domestic violence, it could be change of job, or it could be a kid going to university or whatever. There are so many reasons it could change. Do you think that is a fair and proportionate reason to reduce someone’s household income to the degree that Universal Credit can?
Neil Couling: Universal Credit can lead to a lower notional entitlement, but the whole point is there has been a change of circumstance. It is a relevant change of circumstance, and there are not the resources anymore in the legacy system to administer those claims. If you wanted to administer those claims in the legacy system you would have to move resources back into local authority administration, back into HMRC to administer the Tax Credit changes and then, as Universal Credit rolled out, you would need to move those resources back out again.
We have made that decisive shift. That is what the rollout was about over the last 18 months. Resources now reside inside of DWP to handle change of circumstances and new claims through Universal Credit.
Q17 Neil Coyle: I don’t want to hog questions, but you have been doing this job a long time—
Neil Couling: Yes.
Q18 Neil Coyle: —and I know there have been political changes. The Government have made decisions that have changed how Universal Credit has gone ahead. If you were to go back, what would you do differently in order to avoid the massive increase in costs, as a result of Universal Credit, and the terrible impact it has had on many individual people’s lives?
Neil Couling: First of all, as a point of fact—a point I never tire of making—there has been no massive increase in costs on Universal Credit. In fact—
Q19 Neil Coyle: It is costing three times as much to run as it was intended to do.
Neil Couling: That is not correct, no. You are completely in error in that, Mr Coyle.
Q20 Neil Coyle: Tell the National Audit Office.
Neil Couling: The National Audit Office when it looked in March 2018—
Neil Coyle: It was reportedly signed off by the Department.
Neil Couling: Yes, at a point in time they said the unit costs were £699, which was the figure I gave them. The latest figure for unit costs for January is £438 and is falling in line with our expectations—actually slightly faster than our expectations—towards £173, which is where we estimate we will end up by December 2023.
Q21 Neil Coyle: You are patting yourself on the back for this. That is not what I asked. You still think it is a success.
Neil Couling: You made an inaccurate comment about overspending.
Q22 Neil Coyle: Tell the NAO. Don’t question my figures. You can quibble on the figure with the NAO. That was—
Neil Couling: I am not quibbling with the figure of the NAO at all. I am quibbling about your understanding. Your understanding is wrong. We are not running ahead of our costs. We have never run ahead of our costs. At this point in time we expected to be at a unit cost of £473. We are actually at a unit cost of £438. That is lower.
Q23 Neil Coyle: I think we will suspend disbelief for a second on that.
Chair: We will come to this in another way.
Neil Couling: Those are the actual facts. There is no suspending of disbelief here.
Neil Coyle: We can go back to what the individual impact assessment said Universal Credit would cost and we can see the difference.
Neil Couling: Okay.
Q24 Chair: It is getting exciting already but we will follow this up in correspondence.
Amber, what do you expect to find from this pilot? We know now that people moving over are just stranded. They do not have enough money. They have a whole period when they don’t get money. What are you going to learn from this that will help you change the system?
Amber Rudd: As we know on natural migration, people’s benefits change in some way or their circumstances change in some way and it has always been like this. It was the same with legacy benefits. The benefit system might have changed. They had to make a different application. We can manage that process and, hopefully, with well trained Work Coaches, make sure it works for individuals.
The business of managed migration is a trickier situation because you will have people who haven’t changed at all and are very resistant, for understandable reasons: they may be on very low incomes and they are very nervous about any changes. They may have heard things that worry them about Universal Credit. What we are going to try to learn is about the best way to reassure them and to move them safely, carefully and reassuringly—where they don’t lose out on money—from one benefit to the next. As you know, this has transitional payment—
Q25 Chair: When you say they won’t lose out on money—
Amber Rudd: I am.
Chair: —are you saying that every week they will have a weekly income coming in, whether it may be higher or somewhat lower, and they won’t experience what our constituents experienced with Universal Credit that there is a whole period of time when there is no money?
Amber Rudd: I am saying that their experience will be different to the natural migration because they will have the transition payment that has been agreed with the Treasury for managed migration. I would hope they will have a better experience in terms of their actual income when they are moved.
Q26 Heidi Allen: How can that be right, Amber—sorry, Chair—that whatever you have an argument about the numbers, so many people are naturally migrating across. On the one hand we are very grateful that the regulations were changed and split out so that they just cover this pilot phase, but it does mean that the period of natural migration will be longer and more people move across. If we are saying it is right to protect people financially when they are managed migrated, surely it is right that they are protected when they are natural migrated?
Amber Rudd: The thing about benefits, though, is that it has always been the case that, if you change your circumstances and need to apply for a new benefit, you may find that the situation of the benefits that are being proposed have changed in between one set and the next set.
Q27 Heidi Allen: If somebody moves two yards down the road and it just happens to be in the next local authority, or they have been advised to move property by their council, that is not their active choice in life.
Amber Rudd: At some stage we have to face up to the fact that the old system had the same intrinsically about it as this system does as well. If you change your benefits, you come in and out of a job, or if your family circumstances change or you move there is a different application that is needed, and it is just the same with Universal Credit. I understand your frustration with this but this is—
Q28 Chair: I am trying to find out whether people will lose some money in the transition or whether they are protected and, if they are, why not others? The Committee was in a school in Neil’s constituency last week. There were a number of young mums, and Universal Credit came up and six of the eight mums—if I have the figures right—screamed, “I hate Universal Credit”. That is what their experience was. What are you hoping to learn from this pilot so that, when we visit a school in Neil’s constituency again, the mothers cheer for Universal Credit?
Neil Coyle: Bear in mind they are all using the London Bridge Jobcentre.
Amber Rudd: That is a helpful note, Mr Coyle. What I am focused on for the managed migration is making sure that nobody is left behind, because I know that the Committee has raised this, other stakeholders have raised it—
Q29 Chair: Lots of them want to be left behind, so let’s—
Amber Rudd: But they cannot be left behind.
Q30 Chair: Because Neil said it would take more money to keep the existing legacy benefits going, but what is going to be their experience? The experience of other people going onto Universal Credit is money not coming through, debts being acquired; an experience of horror.
Amber Rudd: That is not true anymore, Mr Chairman. I know that early on when Universal Credit came in a lot of the payments were not made on time and there were difficulties, but now we have I think 85% of payments made on time. We have advance payments available. There is much more clarity on how much people can get.
Q31 Chair: People have a period of time when they don’t get a benefit. Heidi and I were in Chester meeting organisations helping poorer people. One of the workers there said, “I now do not speak to anybody who is not cold and hungry”. That is what is happening under the benefit system. I want to know, should they be lucky enough to have been in this pilot, there would not be a period of being cold and hungry?
Amber Rudd: Everyone is aware now that everybody who goes on to Universal Credit can get an advance.
Q32 Chair: Which is a debt?
Amber Rudd: I call it an advance. I have never seen a debt. It does not exist.
Q33 Chair: It is an advanced debt because they do have to pay it back.
Amber Rudd: I have never seen a debt that does not have an interest rate.
Q34 Heidi Allen: There are people on the breadline who cannot afford to lose anything on their subsistence living, and we will come on to the benefit freeze. Even the basic amount, Amber, is not enough to live on. You then take that away, in the form of debt repayment, and you are just pushing people under the water.
Amber Rudd: That is why we have made other changes to the benefit system, which I am sure we will come on to later.
Chair: We are going to. Heidi is going to take that question.
Amber Rudd: There are other ways where we have tried to improve the life of people who are on low wages, a low income.
Coming back to your question about the managed migration, how it will differ, Mr Couling made reference to Who Knows Me? This is the plan that we are going to have so that people who are nervous—and I understand some people are nervous about going onto Universal Credit—will have somebody who they will engage with, who knows them. It might be their housing officer. It might be somebody they are already engaged with at the Jobcentre who can reassure them and move them.
Can I also say that I constantly meet people at Jobcentres when I go round, or in constituencies, who tell me they were nervous about moving on to Universal Credit but they now love it. They now understand it and they are much more comfortable. I ask them to tell other people about it because I know there is a lot of fear out there about Universal Credit, but there are also a lot of people who, having moved onto it, recognise that it is much better.
Chair: Well, these for six months in Neil’s seat were all on it. That is why they screamed, why they hated it. That was their experience. Others want to pick up but they can come in on their questions. Heidi, can you deal with the benefit freeze?
Q35 Heidi Allen: Yes. Amber, you know how we feel about this and I would like to think that I know how you feel about it, but I appreciate this isn’t within the DWP’s gift. It is the Treasury in fact.
I have been genuinely shocked. I have poverty in my own constituency—of course I do, and I am not so blind as not to see it—but not on the scale of some parts of the country. I am very lucky. There is very, very high employment, good paid employment in South Cambs.
As Frank has described—and I think it is a fair description—Universal Credit because it is very IT based is a system almost built for middle class people by middle class people. What has shocked me is it is a different country out there. People who are really, really struggling and, Amber, we have met biotechnical graduates, IT software engineers, people with mental health issues, every spectrum of person you can imagine, who have found themselves, for whatever reason, on Universal Credit and the money is not enough to live on.
When everything else has gone up: pensions, cost of living, wage growth, everything you can think of, given that we are ahead of our target on saving in the benefit part by £900 million at the end of the third year, how on earth can it be right to expect people to live on this subsistence living? Universal Credit is not enough to live on, do you agree?
Amber Rudd: The point you are asking me about is the four-year freeze that is coming to an end next year. Just to recall, the purpose of the freeze was twofold. One of which was to make the welfare benefit system sustainable so that we could afford it because, between 1997 and 2010, it had gone up by over 60%. I think that was £84 billion in real terms and—
Q36 Heidi Allen: People have to be able to afford to live on it. That is a very practical consequence.
Amber Rudd: Indeed, but people have to be able to pay for it as well. The taxpayer has to pay for it. It was debated in 2016 and it went through. Labour abstained from it and the Conservative Party supported it, and it was within a debate that was going on as well about the fact that Jobseekers’ Allowance, as against private sector wages, had got out of proportion. Benefits had gone up by 21% in the eight years after the financial crisis and median earnings had gone up by 12%, so it was about trying to rebalance that in order to deliver on what the Government were trying to do, which was to incentivise work. That is why it was put in place for four years.
I understand your question about this last year of it, but what I would say in answer to that is that what the Government have done is to try to target support in the areas where it is needed most, where it delivers on the Government’s aim of trying to get more people into work, so that is why we have seen the changes. That is why we have seen the changes to the run-on, to the Work Allowance and to the taper rate. That is where the money has been put, in addition to the National Living Wage, of course, which has gone up, and in the past year of the freeze—
Q37 Chair: Are you lobbying the Chancellor, Amber, to get the freeze lifted this year?
Amber Rudd: I have private conversations with the Chancellor, Mr Chairman, but I am satisfied that the right amount of money has gone in, instead of trying to address the freeze, to try to address low incomes, one of which is the National Living Wage and the others are the ones I have set out.
Q38 Chair: Therefore, the freeze will stay?
Amber Rudd: The freeze will stay.
Donna Ward: I was going to say, if you add up the reduction in the taper, the increase in the work allowances and other changes like the HB run-on and everything in 2019-20, it actually does spend as much money as the benefit freeze if we lifted that, so it is around £1.5 billion extra in 2019-20 from all of those measures, which I do accept is aimed primarily at people in work.
Q39 Heidi Allen: The harsh reality is that not everybody is in work. Some of the very sad stories we heard in Leicester and in Morecombe, not everywhere is blessed with employment as my constituency is. The reality is a welfare safety net cannot just be there for people who are in work and struggling in work. There are people who are not, and the question is: do we believe the core amount that is currently available—because it is not the enhanced payments, it is basically ESA as well for those who cannot work—is enough for people to live on?
Amber Rudd: That is why we have put additional changes into Universal Credit with a two-week run-on for the Housing Benefit—
Q40 Heidi Allen: It is a different question, Amber. Is the core payment enough for people to live on?
Amber Rudd: That is what we have assessed but I understand it is very difficult for people as well.
Q41 Chair: Amber, George Osborne made some of these terrible changes and you have won some of the money back. Well done. He also did the freeze, and the freeze has resulted in the biggest contribution to the Budget deficit reduction. That is poorer people being called upon to make the biggest, single contribution to reducing the deficit. We are now told that we are coming out of this period of austerity, surely those who paid most to getting us out of austerity should be at the top of the queue for saying, “Thank you. Here is some of your money back”?
Amber Rudd: That is why we have put other money in, like the change I made to the—
Q42 Chair: They paid for that as well. That was also part of the moneys he was clawing back from welfare on the structural changes and the freeze. It is great that you got some of the structural money back—important parts of it back—but benefits are still being frozen.
Amber Rudd: It is my hope that that will end next year, Mr Chairman.
Q43 Chair: You will not get it through Parliament, will you?
Amber Rudd: It is my expectation that that will end next year.
Q44 Heidi Allen: A couple of things, just for the record. Put it this way, Secretary of State, it is my one regret that I voted for it.
Amber Rudd: Fine.
Heidi Allen: Absolute regret, because you cannot possibly anticipate how inflation is going to go over a four-year period and my lack of knowledge as a relatively new Member of Parliament let me down.
Could I ask one final question related to managed migration, very, very quickly, and it may be something you want to follow up with?
Chair: Yes, very briefly.
Q45 Heidi Allen: Some noise I am picking up from some of the third sector is they are a little bit worried—and I appreciate you are designing this pilot now, and perhaps you can write to us with your early thoughts as to what sort of things you might be thinking about in it—around transparency. As a Committee, as a social security advisory committee, who is going to assess how successful it is? How is the transparency going to work? The third sector is telling me that it is really worried that a lot of the suggested answers for how people are going to be hand held across in migration is greater reliance on the third sector. It does not have the capacity for that. This is DWP’s responsibility, not the third sector’s responsibility.
Amber Rudd: We expect to work with the third sector. I recognise that it has a lot of the expertise but obviously, if we ask it to do that—in the same way that we have asked the Citizens Advice Bureau to help us—we know we will need to fund it.
Heidi Allen: Brilliant. Thank you.
Q46 Ruth George: Thank you very much, Secretary of State. The library analysis show that the six caps that we have seen and freezes on benefits since 2010 mean that, by next year, an out of work single parent with one child will be £888 worse off, and a couple with two children working 35 hours a week on the minimum wage—so they have seen that minimum wage increase—will still be £1,845 a year worse off than they were back in 2010. That is a huge amount of money to take out of the system. What is the Government doing to make sure that families can meet the rising cost of living?
Amber Rudd: There are other elements, of course, that we have put in place to try to help families. We have increased the amount of child care support that is available; twice as much for low income parents. We have tried to make sure—
Q47 Ruth George: Sorry, that was actually reduced. It was 80%. It was reduced down to 70% but then it was put back up to 85%. It went up from payments, so the difference from 2010 is very little.
Amber Rudd: I also announced in my last speech that we were going to be making the flexible support available, so that job coaches have more money to be able to help with people who want to get that advance for the child care as well. We are trying to make sure that we do support them as much as possible. I don’t know whether in your example the single mother who is not working has access to disability payments or additional care, so I cannot really engage particularly.
Q48 Ruth George: It is standard families: a single parent with one child out of work or a two parent family with one earner, 35 hours a week of work and two children. Those families are very significantly worse off under Universal Credit.
Chair: As all families are.
Amber Rudd: No, I don't think all families are, Mr Chairman. The ones who are in work who are able to take advantage of the reduced taper rate, the ones who are being able to benefit from the rise in the National Living Wage, many families will not be disadvantaged by this.
Q49 Chair: The example that Ruth gives you is a family, a married couple, one in work, with children, is that they are in work and they have lost 1,800 quid.
Donna Ward: It would be useful if we just get the example by correspondence, but some examples of things that have improved the standard of living for people would be reducing the taper rate—as we have already said—removing the seven waiting days, the two-week run-on of HB, the increase in the work allowances, the two-week run-on of JSA, ESA and income support, plus there have been additional things around free entitlements for child care as well. The example of the person working however many hours a week, depending on the age of their child, could have benefited from that. The Living Wage has gone up by 14% over the period of the freeze.
Q50 Chair: That has been taken into account.
Ruth George: Yes, it has been taken into account. Lots of that has been taken into account.
Donna Ward: It would be interesting to see the examples because I think quite a lot has gone back in and, although the—
Q51 Ruth George: The benefit freeze, the big issue is housing. In some areas you have 97% of families have to make up their housing costs out of their rate of Universal Credit or other benefits because Local Housing Allowance does not cover private rents anymore. We are seeing an increase in pensioners going into poverty now, largely because of those increases in rents and the Local Housing Allowance freeze. What are you doing about pensioners and the rates of property increasing?
Amber Rudd: If Neil can answer your first part on the examples you gave and then I will come back on the Local Housing Allowance.
Neil Couling: I suppose the point I want to make is like for like, legacy system compared to Universal Credit. We are spending £2 billion more on Universal Credit. The assumption that everybody is a loser from Universal Credit clearly cannot be true.
Q52 Chair: We know that some are better off and some are worse off. It is not much comfort to you if you are worse off to be told, “Don’t worry; someone is better off in your place”.
Neil Couling: No, Chair, what I was trying to address was what may have just been a throwaway comment—and I cannot remember from whom on the Committee—that everybody is a loser. That isn’t the case.
Q53 Chair: We are going to send this correspondence to you. The calculations were done for us by the library. My worry is, supposing the library is right, Donna, and you are wrong, what are you going to do about it except write us a letter and say, “Sorry about that. We got that wrong”?
The reason why we have invited you here today is that we got a very important statement on Wednesday that, even though it is late in the day, we are hoping to shape. Here we are presenting evidence that we have used many times before—it is not as though we pulled it out of the blue—and the response is to doubt the calculations that the House of Commons’ statisticians in the library have undertaken for us.
Many of the things like statutory minimum wage have been taken into account. People have suffered huge losses, nothing to do with whether they are on Universal Credit or not. We are actually talking about the benefits. They haven’t changed benefits during this period in which their living standards have been cut, and they have been cut.
Donna Ward: We are not saying we doubt the calculations. We are saying that we haven’t seen the basis of those calculations, and it would be possible for me to produce other calculations where people are better off because they have benefited from the list of things that we have listed here. We do accept that overall, even though Universal Credit is more generous than the legacy system—
Q54 Ruth George: To certain groups of people.
Donna Ward: No, overall, £2 billion more generous. We do accept that the whole system is less generous than if there had not been a benefit freeze. We could not be saying that the Government were trying to rebalance the system, make it more affordable but it is also more generous. It would be impossible to make both of those arguments.
Q55 Ruth George: Okay. We have seen and I think the Joseph Rowntree Foundation has crunched the latest figures to show that there is still over 2 million families who will, on average, be around £1,800 a year worse off, so that is still a significant number of families. What will you be doing, Secretary of State, bearing in mind the discussions we have this week and in the next two weeks, when we see tariffs put on to food and prices going up considerably because of decisions that are made in this House? What will you be doing for those families who are struggling on the breadline now?
Amber Rudd: If I may, on the Chairman’s statement about the spring Budget, I have to say that many of us have been having conversations with the Chancellor. He will repeat his line that it is not a fiscal opportunity but that there will be one later in the year.
Q56 Chair: He has been announcing lots of changes, even though he keeps telling us it is not the Budget.
Amber Rudd: You might say that, Mr Chairman.
Q57 Chair: What is it going to be like when the Budget comes up?
Amber Rudd: When it comes to the Spending Review, in terms of your earlier question, if I may, one of my proposals will be a joint bid with James Brokenshire. I do have concerns about the Local Housing Allowance and the impact on affordability in certain areas, and so I will be working with him so that we address supply and demand together to try to get a better outcome for all of our constituents.
In terms of your other question just now about this week, we have been making preparations for no deal planning as well and we are making sure that, if there is an economic downturn, we are prepared to hire additional people should there be fewer jobs available as a result of a no deal exit.
Q58 Ruth George: What about food prices and inflation that will hit people on the lowest incomes?
Amber Rudd: Government overall have been looking at the possibility of having a hardship fund should it be necessary.
Q59 Chair: Will that be food subsidies?
Amber Rudd: I am afraid I cannot be drawn anymore on it.
Q60 Ruth George: That is obviously very worrying. The whole way that people on Universal Credit are trying to desperately get by from one month to the next is really telling on their mental health and emotional wellbeing. My health authority area, my constituency includes Tameside where Universal Credit was first rolled out back in 2012. They now see the third highest suicide rate in England in Tameside. The council has just done a report on that and some of the underlying reasons, many of which relate to welfare changes and to debt. Will you look at that evidence and what it is doing to the country as a whole, particularly, where we have maybe in Harrogate a pocket of an area where there is going to be an increased amount of people on Universal Credit? Overall, it is incredibly important that we look at what the system as a whole does to people when they feel powerless to change their situation, as so many report they do under Universal Credit whatever the local income.
Amber Rudd: I always look at the evidence you give me because I know you have tremendous expertise in this area. I will also say that I go around Jobcentres, and at the last one I went to one of the Work Coaches told me how one of her clients explained that being able to engage in this personal way had stopped him from potentially becoming suicidal. They do a fantastic job sometimes, which was not done before. We underestimate the upside of the personal involvement of Work Coaches with clients, which is totally new.
Q61 Ruth George: It is, but Work Coaches are saying now that they do not have enough time to give that personal attention to claimants that they have at the moment. That number of claimants per Work Coach is due to increase fivefold over the next three years. Journal entries are not being responded to now. People feel as if they are not being listened to because the Work Coaches simply do not have time to do that. How will you deliver those personal relationships when Work Coaches are handling around about 600 claimants?
Amber Rudd: That has not been my experience. I am slightly worried that you are getting perhaps a different report than I am getting, which may not be totally surprising. The Work Coaches, who I have spoken to, have always described to me the very personal approach that they have had.
Ruth George: They will with particular individuals of course but there will still be individuals who simply fall through the net. The advice now in many Jobcentres is, “If you want to report a change in circumstances, don’t do it through your journal because people simply do not have time to respond to journal entries. You need to phone up and try to get through”. This is happening now and you need to know.
Q62 Chair: What is the workload now for Work Coaches—
Neil Couling: I was just coming in on that, Chair.
Chair: —and what will it be like in a year’s time?
Neil Couling: I think Ms George may be conflating two different figures to get to the 600. I cannot remember the exact figure—I am afraid I have not brought that with me—as to what the long-term position would be but in my head roughly around 250.
Q63 Chair: What would it be now? How many people will be on the books?
Neil Couling: About 120 right now and it will move to 250. The way people have reached 600 is by dividing the entire Universal Credit load by the number of Work Coaches by 2023. That is a mistake to do that because there will be a bunch of people who are in no conditionality, so they will not have a Work Coach attached to them. They will get support if they want it from a Work Coach. Similarly, for those people in work we currently do not have a policy for how we are going to support them. They are not factored into the figures there, so I do not think it is 600, Ms George. I think it is closer to 250.
Q64 Chair: Neil, I am your Work Coach. I now have 100 and what people that I look after?
Neil Couling: Roughly 120, something like that.
Q65 Chair: How long do I have in theory with each one of my customers?
Neil Couling: Having 120 allows you to spend—I think we have written to you before about this, Chair, but I cannot remember the exact amount of time. You would not break it down into a week anyway because not all the contacts are weekly, but I haven’t heard from Work Coaches anxieties about the amount of time that they are working with clients at the moment.
Q66 Neil Coyle: Have you heard from Wolverhampton where they are going on strike?
Neil Couling: That is in the service centre, Mr Coyle. That is not in the Jobcentre and, regrettably, about half of our staff today went on strike there.
Q67 Chair: Chris will ask about that in a moment. Therefore, my numbers move from 120 to next year 200 and—
Neil Couling: No, I am saying by 2023 the final calculation is around 250.
Q68 Chair: I will have to spend far less time, won’t I?
Neil Couling: Not necessarily, because over that period of time as well we will enhance the system. For example, on something like booking appointments that is currently an activity the Jobcentre has to engage in. Eventually we will have a situation much like when somebody books a holiday now you effectively book yourself in, the claimants themselves will book themselves in to an appointment. There will be fewer administrative tasks there, which should free up time to allow people to be able to manage those caseloads.
It is one of the reasons why the unit costs are higher now than in steady state for al those sorts of reasons.
Chair: It is certainly going to fall if that is true.
Q69 Rosie Duffield: Secretary of State, you have acknowledged that food bank referrals often link to delays in accessing Universal Credit. Shelter and the Trussell Trust have told the Committee that the five-week wait is the biggest problem with the way Universal Credit works. What options are you considering to reduce that five-week waiting period?
Amber Rudd: My comments were with regard to the initial rollout of Universal Credit where, because payments were slow to be made, irrespective of the wait that people had to make anyway, I believe it did contribute to the growth of food banks. However, we know that the reason for food banks is varied and many and now we have a situation where people’s payments are made, we believe—about 85% I think it is—on time compared to the early rollout, so I think that is a vast improvement. The fact is too that people can get an advance. That should help too with getting money into people’s hands immediately and I would hope that would reduce the need for food banks.
I have met up with Trussell Trust and with Shelter, of course, and discussed this with them. The fact that people can get Housing Benefit run-on for two weeks I hope will also help and—even though five weeks I know is a difficult amount of time—it has at least been reduced from six weeks to five weeks. Next year, when we move to the managed migration, people will be able to have the run-on of the legacy benefits as well. Hopefully, all those together will help people in terms of the transfer onto Universal Credit.
Q70 Rosie Duffield: What about people who are making a claim for the first time? They will not have any of that run-on.
Amber Rudd: No, they won’t. You are absolutely right. Never the less, they will be able to get an advance, which is—
Rosie Duffield: The loan?
Amber Rudd: —basically 13 payments of a 12-month allowance.
Q71 Rosie Duffield: At some point that is going to catch up with them, isn’t it, and they are still going to be using those food banks?
Amber Rudd: They may or may not be using the food banks but they still have to pay it back. We have listened to the stakeholders about what period they should pay it back over. From October 2021 they will be able to pay it back over 16 months, which I hope will be a help as well. They can also get budgeting loans if they need it while they are on Universal Credit.
Donna Ward: Most people do come on to UC if it is a new claim from work, so most people are paid a final time. If everything then works with Universal Credit there ought not to be a delay.
Heidi Allen: Not everybody on UC has that financial resilience and they are the people we care about the most, the people who are absolutely rock bottom, have nothing, nothing to rely on, no family friend structures like we all enjoy, have nothing to rely on other than food banks and charity.
Q72 Rosie Duffield: Those are the people that do fall through the net, which is what Ruth was talking about, and I think those people are being caught by the Trussell Trust and picked up. They seem to be doing the work that they expect you to do as a state benefit. They are doing the job of the state. They are mopping up people’s lives, aren’t they?
Amber Rudd: One of the things I offered to the Trussell Trust was a closer working relationship with the Jobcentres, because people do sometimes think that they have to wait before they can apply for Universal Credit, for instance. There is a lot of misinformation out there, so I have said to Trussell Trust that, if it would like to have people there at the food banks, we can try to provide that so that there can be more information generally out there, so that people can hopefully access Universal Credit and their advance as soon as they need it.
Chair: Derek, can we continue this with your question?
Q73 Derek Thomas: Yes, no problem. Sorry, apologies to everyone for not getting here from Cornwall on time.
When you came back in December, Secretary of State, you told us that waiting five weeks without getting an advance is too long and so then they can have an advance or maybe a loan. Do you think the Department is clear enough about the fact that these advances, these loans, need to be paid back? Do people understand that when they take these advances?
Amber Rudd: When I speak to the Work Coaches, they are very clear that they do explain that to clients. I do not think there is any mystery about that. What is explained to them is that they have 12 months at the moment and in future 16 months to pay it back, and that there is no interest on it, which is why it is an advance against their actual benefits. Later this year we are reducing the amount of payment that people need to make as part of their debt reduction on other matters, from 40% to 30%. We are trying to make sure that people can keep more of their money all the time.
I am mindful of what other members have said that it is difficult for people to pay these sums back and we have to be careful that they do not get pressured too hard with it. It is an advance against money they will be receiving, so I hope that will alleviate some of the difficulties when they first get onto it.
Q74 Derek Thomas: Thank you for that. You referred in some other way about the debt. Is this described as a debt? Once they take out an advance is it then a debt that they carry until they pay it back?
Amber Rudd: People describe it as different things. I would describe it as an advance because that is what it is. It is not an interest bearing debt but people sometimes arrive with other debts from Universal Credit, like old housing debts they might have accrued that have to be paid, but their advance isn’t interest bearing in the same way and is genuinely the money that they are going to receive anyway.
Q75 Derek Thomas: Presumably, as we get to managed migration, and in terms of some support that will be available, are you likely to see less take up of advances? Do you think that is the intention?
Amber Rudd: I have not really considered that. What do you think, Neil?
Neil Couling: You might do because you have the two-week run-ons then for all the legacy benefits coming into play.
Q76 Derek Thomas: One concern—and it may have well been covered, so I will be very brief—is this natural migration that is happening at the moment. People with all sorts of circumstances are finding that they need to naturally migrate. What we are hearing, I guess, is if that is their circumstance they will take on this advance and with all the other chaos—and even sometimes loss of a loved one and so on—that may be attached to the natural migration, they face having to make these payments. Are we fairly comfortable with that or do you think there is work that needs to be done to make sure that, where possible, natural migration does not leave people in that situation?
Amber Rudd: I want it to be as sympathetic and as kind as possible to people. That is why we have the advance payments end. To be frank, the Work Coaches have quite a lot of discretion themselves, if they are very vulnerable people, in terms of how they proceed so I would hope that they will get engaged with the workers that will look after them.
Q77 Derek Thomas: Finally, Chair, do people understand when they take an advance or this loan that, if they come off Universal Credit before the 12 months is up, that then does become a debt and they then still need to pay that back? Do you think that is clear when people take on the advance?
Amber Rudd: I think it is but I—
Neil Couling: It is in the material that we send to claimants as they participate. They can now claim an advance online or they can claim in person in the Jobcentre or they can ring the service centre. It is explained to them, and I think a previous incarnation of the Committee asked for reassurance on this. When you look at the reasons why people do not take out an advance, which is quite interesting, there is a clear understanding there that having to pay some money back is one of the reasons why some people don’t take out an advance.
Amber Rudd: I think about 60% take out an advance.
Neil Couling: About 60% take out an advance. I am talking about the 40% who don’t.
Q78 Chair: Amber, I have been shocked that people are not only paying back the advance—that is leaving aside whether it is a debt or not—but the amount of historic debt that they are asked to pay back. You say you are reducing the actual percentage of their benefit to which they can pay back. When you present your accounts to Parliament, each year we write off moneys that are just lost so you can balance the books. Can you give us an assurance that nobody is being chased for debts from a previous decade sometimes that has actually been written off by Parliament?
Amber Rudd: The Committee raised with me last time the issue of people being chased for debts for Carers Allowance overpayments.
Q79 Chair: No, I am talking generally about: do you find there have been overpayments, alleged this payment, alleged that payment, all of a sudden, vroom, out comes from the Department a nice little chit saying, “That is what you owe us”. Each year we write off some of your bad debts and the National Audit Office makes comments on this sometimes. Can you give us an assurance that our constituents are not now being presented with historic debts that Parliament has actually written off in previous years?
Amber Rudd: That Parliament hasn’t written off?
Chair: Has written off.
Amber Rudd: Oh, has written off. I think that is very unlikely but I will come back to you, Mr Chairman. I will check that.
The point I was going to make about the carers is about this whole debt chasing issue that you raised with me last time. I am looking at that with the Permanent Secretary and I checked it this morning. I will come back to the Committee with more information about that.
Chair: All right, a quick point from Neil.
Q80 Neil Coyle: The question is about advances, and you mentioned that you are listening to stakeholders but I am yet to identify a single stakeholder organisation that thinks that a five-week wait for the first payment is sensible to begin with, but the second is delays. Secretary of State, you have said 85% of people are currently being paid on time. In the pilot, will anyone receive their payment later than five weeks and, from the Department more widely, how many people—not as a percentage—do you expect to receive their payment late this year? Is it close to the 300,000 who were expected to receive a late payment last year?
Amber Rudd: The reason why people are not receiving their payment on time is because their forms are not completed in the right way. It is not entirely the Department failing to do so. It is about something they may not have completed themselves.
Q81 Neil Coyle: With respect, when they phone the Department’s helpline they are often not given the information about what they need to supply, so perhaps we could address that if you are going to focus on this, but can we stick to the numbers and the pilot?
Amber Rudd: It is my intention that the pilot should work. I know I have to use the pilot to convince people that the managed migration is going to work well, so I am going to make sure that we are as ambitious as possible to get as high a level of payment on time, as I will need to convince people that we have a system that is going to work effectively for managed migration.
Q82 Neil Coyle: You would expect it to be higher than 85% but you don’t know?
Amber Rudd: We haven’t done the pilot yet.
Neil Couling: Perhaps I might help. It is a very different process—which harks back to your questions of why after five years we are having to learn here—for a new claim the claim basically arrives at your door and you have to start the process. For managed migration what we are looking at there, we have control over when we stop the legacy benefit entitlement and we start the Universal Credit entitlement so that it is much easier to pull those two together so there isn’t that kind of gap.
That is why I have said to some of the stakeholder groups who said, “Will you have a measure of payment timeliness about whether you are ready to go to scale or not?” I said, “I might do, but it is a different process here”.
We invented the measure of payment timeliness because the All-Party Parliamentary Group on Hunger said to the Department back in 2014, “You weren’t measuring benefit timeliness properly because of the average actual clearance times’ measure”. In Universal Credit we have a real time measure of benefit timeliness that you do not have in any of the legacy systems as well.
We will seek to exploit that. It has been improving over the last year. I think it will continue to improve in this coming year, so that the worst forecasts of the National Audit Office I do not think will come true but this is something that my colleagues in operations work very hard on day in, day out.
Q83 Steve McCabe: I want to move on to just ask about sanctions briefly. We know that the Department believes that sanctions are helpful in encouraging people to get into work, and when the Government responded to this Committee’s report of 31 October last year you said that there were international examples that people had looked at that reassured us that sanctions do work. But the longest period I understand, in any of those international examples, was three months. The academic evidence that the Department provided covered sanction periods of three weeks and two months. Could you help me understand why the longest sanction period that you pursue is three years, when there does not seem to be much evidence to support that?
Amber Rudd: We have the report that the Select Committee has done. My Department is doing an evaluation and we will be taking on board some of the recommendations you have made and coming back to you to let you know what our plans are.
You are absolutely right, the international evidence is that sanctions do work and 90% of the sanctions that are issued are up to four weeks, so the idea of having much longer is available but it is very rarely used. In fact, sanctions overall are very rarely used. When I go to see Jobcentres I always check that and I find they are very reassuring that it is hardly ever used. The small number that is used is used as a reminder that people have conditionality. They have to participate.
I do take the point about a three-year sanction and I have asked the Department to look at that because, having checked for myself, it is only used in a tiny number of cases, so I am not convinced we need to have it there.
Q84 Steve McCabe: How many cases do you think it applies to at the moment? Do you have to have figures?
Amber Rudd: It is a very small number.
Q85 Steve McCabe: Yes, I do not doubt that but I don’t know what a “very small number” means. I was just curious.
Amber Rudd: I cannot really give an exact number.
Q86 Steve McCabe: Is that something that you could send to us? I would be interested to know what “really small” means.
Amber Rudd: Can I just say that I have drawn my own conclusion, which is that we may not need the third year.
Steve McCabe: No, I got that very clearly.
Amber Rudd: The number is so tiny and I appreciate that it worries people—of course, sanctions do—and demonstrating that 90% of the sanctions, when they take place, are up to four weeks shows a more reasonable approach.
Steve McCabe: I am sure people will be pleased to hear that you are planning to get rid of the three years. I was just curious. It is very hard when we do not know if we are talking about hundreds or thousands or hundreds of thousands to know what a tiny number is. That was the obvious reason behind my question.
Q87 Chair: You said when you go into Jobcentres you always ask them about the numbers of sanctions.
Amber Rudd: I do.
Q88 Chair: Can you tell us, if you can recall, what was the last Jobcentre you went into and how many sanctions did they say they were applying?
Amber Rudd: The percentage I was told at the last one was 0.2% and they explained to me how they used it, which is they wait—
Q89 Chair: But 0.2% means what, though, in real people?
Amber Rudd: I cannot recall.
Neil Couling: I think the National Audit Office found in the six-month period, from July 2015 to December 2015, that 1 million people did not turn up for an appointment in a Jobcentre. It is 1 million people did not turn up and 34,000 of those were sanctioned for not turning up, which suggests to me Work Coaches are working really hard trying to investigate good cause, see what the reasons for the non-attendance were and not reaching first go for sanctioning somebody.
Chair: Well, done, Neil, it has destroyed the answer he was pursuing; back to Steve.
Neil Couling: Is that a good or a bad thing, Chair.
Chair: It is a clever feature.
Q90 Steve McCabe: I think the key thing we heard there is that you are thinking that the three-year rule does not need to be in place. That would be welcome news.
You mentioned there that you are currently engaged in an evaluation. I do not know what stage it is at. This is the evaluation into the effectiveness of sanctions in supporting people into work. Is that right?
Amber Rudd: Yes, that is right.
Q91 Steve McCabe: When do you expect to have the findings from that?
Donna Ward: We expect them to be in June. It is mainly focused on the effectiveness of sanctions and helping people to get back to work and June is the expectation.
Q92 Steve McCabe: Will that piece of work look at all at the impact of sanctions in terms of the type of work that people get into? There is obviously some suggestion that people on sanctions certainly go into work but may be driven into extremely low paid and insecure work. Will you be looking at any aspect of that?
Donna Ward: Yes. That should be in the data what kind of work people get. We will make sure that that detail is in there.
Q93 Steve McCabe: Is that going to be a published evaluation?
Donna Ward: Yes.
Q94 Steve McCabe: One last thing that I did not quite understand when I was reading this, obviously this Committee has taken a lot of evidence about the impact of sanctions in particular groups, lone parents being one very special group, and people with mental health problems being another. The things we had described to us, some of which you have heard today, is that it can drive people to reliance on food banks. It does increase debt in some cases, the inability to pay their top up pre-payment meters so that they are left without heat and light, and it does seem to contribute to deterioration in their mental health and physical health problems.
If you are aware of all those impacts, those are the impacts of sanctions, why do we have to wait until after the evaluation into the effectiveness of sanctions for supporting pep into work before you begin to look at the consequences of some of your sanctions on these vulnerable groups? Do these things have to be dealt with together? Aren’t they separate issues?
Amber Rudd: I will always look at the evidence that this Committee provides but my conversations with the Work Coaches, when we talk about sanctions, are that they are very reluctant ever to use them and it is never, as is sometimes reported, “Oh, somebody missed an interview”. It is about them persistently not engaging in the conditionality that is there in order to receive Universal Credit. The Work Coaches have a lot of independence in terms of not making people vulnerable and, although of course the sanction is only on the core support element, they are very mindful—because I have spoken to them about it—about the impact on housing costs, for instance, particularly if they have to top up their housing costs because of the LHA issues. I would expect all Work Coaches to take that into consideration anyway.
Q95 Steve McCabe: I just wonder about that. I mean both you and Mr Couling say very few people are sanctioned and most people are sanctioned for a very short period of time. How do you explain that we have groups coming to this Committee and giving such graphic evidence? It does not sound like the same picture. I do not know if I am missing something, but it sounds like you have a slightly better view of what is happening than the impression that has been given by these groups to this Committee.
Amber Rudd: There are exceptions where things go wrong. I regret those, and they often get into the news as a major item. They can have very sad cases where something goes wrong. We always engage with what happened and try to make sure that it does not happen again, but I think it is like any major system; sometimes things are not as perfect as they should be.
Q96 Steve McCabe: Is there any guidance? You said about Work Coaches and they are not desperate to use sanctions and they take account of people’s circumstances. If someone said to them, “If you do that I am not going to be able to have enough money for my pre-payment meter” or, “I will not have enough money to feed my kids this week” or, “I think this is just the last straw. I cannot cope anymore. I have told you why I was late” do they have any guidance that says, “If someone says that to you, back off”?
Amber Rudd: I spoke to the person who was running the last Jobcentre I went to see and she explained to me that before anybody was sanctioned it was referred to her, and that she would always make sure that there were not consequences like the ones you have described. That is what I would hope to happen, and I sincerely hope it happens everywhere, but if it does not we will make sure that we try to investigate why not and put it right. It is not just one Work Coach’s decision. It is a decision-maker as well.
Q97 Steve McCabe: No, I accept that. As a constituency MP, who like everybody else here does not just hear these stories at Committee, I do hear them sometimes in my advice centres, what should I do? Having listened to your account, Secretary of State, when someone is confronting me with what sounds like a very different picture what is your advice to me? What should I do?
Amber Rudd: You can write to me.
Q98 Steve McCabe: I certainly will.
Amber Rudd: Plenty do. I do not know what your relationship is like with your local Jobcentre, but it can always be improved. If you have a good person running it I would expect them to engage with you to make sure that you are satisfied that it is being handled correctly.
Q99 Steve McCabe: I should say to them, “Amber Rudd said that you should not behave like this. This is wrong”.
Amber Rudd: I am not going to be drawn on the individual behaviour there, but I am happy to say that we would expect the Work Coaches to engage fairly and the decision-maker, with individuals, and only use sanctions where it is really necessary.
Chair: Chris, you have been very good. Thank you very much.
Chris Stephens: I do my best.
Chair: You can now go on to a number of things you want to ask.
Q100 Chris Stephens: Thank you. If we can go back to Mr Couling, and his exchanges with Mr Coyle, which ended with the situation today both in Walsall and Wolverhampton where there was industrial action by staff, as I understand it, over excessive workloads, insufficient recruitment and lack of consultation between the employer and staff, Mr Couling. That is a concern to the Committee, that we now have staff working in Universal Credit service centres who take industrial action based on the fact that they think they are overloaded with work. As I understand it, 30 calls per day is what is happening in reality, compared to the Department’s expectations of 38 calls per week. Mr Couling, what are you doing to address this matter?
Neil Couling: It is clearly regrettable that a number of people have decided to strike today in Wolverhampton and Walsall. I think the numbers out on strike are about 172 out of 288 employees in the two service centres. The union’s claim, I believe, is for 5,000 extra staff, which would double the number of people in our service centre network. I do not think that is proportionate to the challenge that we face.
Q101 Chair: Is there some challenge, though, which would mean more staff, Neil?
Neil Couling: In the life of this programme I have injected more staff into the system where we have seen problems. The Secretary of State was talking about the problems we experienced in early 2017 and one of the reasons for that—and I am on the record for saying this before—was that we did not get the balance right between, effectively, the cost of running the system at that point in time and the number of resources we had in place.
We are talking to the trade unions about this. We hope they will not continue the strike action, but if the case is merited to inject more resources in we will do that.
Q102 Heidi Allen: With the greatest respect, Neil, if you are saying you learnt from it right at the beginning where you got the balance wrong and had to put more staff in, should you not be more alert to that? You should not be waiting for the unions to tell you.
Neil Couling: No, and I do not agree that the strike action is justified. I do not think the figures that Mr Stephens has quoted for the number of phone calls that individuals are handling are in any way accurate. Roughly, during the working day, phone calls are taking up one and a half hours of a working day for a case manager, and that is part of their own duties to handle that.
Q103 Neil Coyle: So you are saying that is part of their job?
Neil Couling: I am not saying that, no.
Neil Coyle: You kind of just did.
Neil Couling: No, I am saying that I do not recognise—
Neil Coyle: You also said there was a case load they were meant to have, so—
Chair: We are now with Chris. Chris?
Q104 Chris Stephens: Just on that, thanks, Mr Couling, for that answer. If 91% of those who returned the ballot paper, 56% want to take out strike action it is does suggest that the staff on the ground believe there is a problem. You are indicating that you are now in discussions with the trade unions about this but I think the problem, Mr Couling, is that for months I and many other Members of Parliament have been raising in DWP questions, and all the rest of it, the concerns of staff who are saying that because of the number of phone calls they have to deal with they cannot process online journals. If they cannot process online journals, surely that suggests that there will be delays to payments.
Are you indicating that you are going to work with the trade unions to address this problem? If it is not addressed in Wolverhampton and Walsall then I am suggesting to you, Mr Couling, there may be a case that industrial action takes place in the other Universal Credit service centres.
Neil Couling: Yes, so it would probably help the Committee if I explain a little bit about how the operation of Universal Credit is carried upon. We have moved from a situation of a virtual system, via which a call would come into it and be routed to the next available agent, to one where there are case managers who deal with your call and case. That requires us to balance across the service, so that the right numbers of resources are in place at any one point in time to handle those calls.
For the most part I believe we have that right, but if you look certainly at the case for Wolverhampton, where the strongest mood is there for action, we have to attach to that service centre the right number of Jobcentres in order for them to carry out the case manager role. At some point in time—to return to Ms Allen’s interjection—that can get slightly out of balance, and that will cause difficulties that we move fast to try to address.
Q105 Chris Stephens: Therefore, you are going to review the staffing levels at Wolverhampton also?
Neil Couling: We are continually doing that in the light of unknowns, so we forecast the number of cases that we think are going to come in to be dealt with on a monthly basis. They are forecasts and the one thing around forecasts is they will be wrong, so we try to build, as we have done before, some capacity to deal with that. In some locations, at some point in time, you will see that being out of kilter or out of sync and that is what I believe has happened in Wolverhampton. If you look at the country as a whole then those problems are not manifesting, so we need to balance or rebalance between operations.
Q106 Chair: Walsall has a lot of staff.
Neil Couling: Our staffing is growing all of the time across the service centres because the case load is growing at 140,000 cases a month, so we are increasing the size of our administrative operations here across the course of the year but there could be some short-term disconnects between a nice balance between the amount of work that people have to deal with and the amount of staff we have in place to do it. My operational colleagues spend most of their days trying to get this right and to keep it in balance.
Chair: Do you want a last question on this, because I want you to do Pension Credit?
Q107 Chris Stephens: Absolutely. Mr Couling, some of the figures that have been presented to the Committee is that the number of claimants per case manager currently is 154, but the expectation in 2024 is there will be 919. Do you recognise those figures?
Neil Couling: No, that is wrong.
Q108 Chris Stephens: In your report, I understand.
Neil Couling: Yes, so that is about, now, 16 or 17 months old. In terms of the numbers, I think they were December 2017 numbers, so the latest claimants per case manager is about 390, but if you would like I will write to the Committee with the exact numbers and I will give you a sense of where the numbers are going to go as well over the course of the year.
Chris Stephens: That would be helpful.
Q109 Chair: Does that mean they are under-working now, if you expect them to do more than twice the number at the end of this process, for God’s sake?
Neil Couling: No, Chair. In one of my letters back to you, and I do not know if you have had a chance to read it yet.
Chair: Of course I read your letters.
Neil Couling: Of course. I read all of yours too. The system is being developed and it is as important to keep developing that system as it is to implement new policy changes. In one of my letters recently I said to you that in the past I could slow the programme down in order to put in policy changes, but now I have to say to Ministers and have difficult conversations with Ministers, “You might need to wait a bit for that policy change to come in because I have to deliver these efficiency measures as well in order to keep the administration of Universal Credit on an even keel”. So there is a constant tension in there that everybody would like everything at the same time, and you have to make some choices about that.
Q110 Chris Stephens: Secretary of State, I want to ask you about the changes to the eligibility for Pension Credit for mixed age couples, so very real concern from the Committee that this group will be worse off under Universal Credit than they would have been otherwise. Can I ask the Secretary of State what work have you carried out to ensure that this rule change will not increase pensioner poverty?
Amber Rudd: Pensioner poverty is at an historic low at the moment, because of the triple lock that has protected pensioners. These changes that are coming in, in May, were voted on in 2012 and it does not affect people’s access to a state pension. I want to make that clear, because some people get concerned about that. It does mean that the people who fall into this group whereby the younger member of the couple were not previously in the work-related incentive group will now need to be part of that, ie, part of Universal Credit, but that is only for new applicants. Existing applicants will not be changed. It is for new applicants who will be affected by it, to make sure that they cannot not be involved in the work-related requirement that comes before you reach pensionable age.
Q111 Chris Stephens: For clarity, then, because obviously it is a very real issue for those campaign groups who represent 1950s-born women, the so-called WASPI women, will they be affected? From what you are saying will they be affected by this pension change?
Amber Rudd: It is possible that some might be, because it depends where they fall, whether they have reached pensionable age or not yet, and it depends what their own arrangements are.
Q112 Chris Stephens: Obviously 1950s-born women will be concerned, because they have grown up in a period when if they wanted a cheque book they needed a male partner or their father to sanction that. If they wanted to hire goods they needed permission of a male partner or their father. They have then been told that they have to work on longer than they originally thought so when, Secretary of State, do 1950s-born women enjoy the benefits of equality?
Amber Rudd: I do not think that is quite correct. Women born in the 1950s did not all experience the sort of restrictions that you have just—
Q113 Chris Stephens: Some of them did.
Amber Rudd: Indeed, but not generally. That was not the law in the UK, so it is a fact that some will be impacted by it. We believe that we did do the correct thing and made sure that all women who were going to be impacted as you have described, the 1950s women, were told about the changes in good time. I know that there is a disagreement from a lot of them on that and it is the same with the changes that we are making now to the mixed age couples that we have. We let them know that that information is on gov.uk. We have sent out leaflets. We hope that everybody who is approaching pensionable age will be aware of this.
To repeat, if I may, this is not going to impact on people who are existing claimants[1].
Q114 Chris Stephens: They do not seem to be enjoying the benefits of equality, from what I can see, Secretary of State, so if I go back to the Pension Credit changes, because the 2012 impact assessment has said that mixed age couples without children will suffer some of the larger notional losses and could see some couples lose a substantial proportion of their income simply because of their different ages, so is that the case?
Amber Rudd: That remains the case, but it will be for new applicants.
Q115 Chris Stephens: Is it the case that pensioner poverty could increase as a result of these changes that the Government want to bring in?
Amber Rudd: I certainly hope not, because they will still be eligible for the triple lock in terms of protecting pensioner income, but this will make a difference to people who fall into the mixed age couple group, that is correct.
Q116 Chris Stephens: The Committee has written to your colleague and we are still waiting on a response.
Amber Rudd: I think that letter was quite recent, Mr Stephens.
Q117 Chris Stephens: Yes, that is right, so what work has been carried out then to ensure that there is no increase in pensioner poverty or is it just the case, Secretary of State, that you are indicating that there will be some increase to pensioner poverty as a result of this change that the Government are introducing?
Amber Rudd: It will depend on a lot of variables. We have already spent £120 billion on benefits for pensioners. Within that context this is a relatively small change. I do not think there is anything else we can add.
Q118 Chris Stephens: I do not think it is a relatively small change.
Chair: It is a major change for those that are affected.
Amber Rudd: I acknowledge that, but it is a notional loss because it is for new applicants.
Chair: All right.
Q119 Chris Stephens: Therefore, we will receive a response from the Department in relation to this?
Amber Rudd: Yes, the letter from 27 February. Do you want to add anything?
Donna Ward: No, I think there was a published impact assessment at the time. There will be new poverty statistics coming out on 28 March and there is nothing else that we can say on pensioner poverty before that.
Q120 Chris Stephens: Are there no plans to do an impact assessment now? There was an impact assessment in 2012 and it is now 2019, so will there be a fresh impact assessment?
Donna Ward: I do not know of a fresh impact assessment being planned. Normally they are just done at the time of the policy decision.
Q121 Chris Stephens: The Department has waited seven years to introduce this change. Obviously, I would assume, it has waited seven years because there may be problems attached to it. There may be a reason why it has taken seven years for this, so will there be a new impact assessment?
Amber Rudd: We will have some information for you when we reply to the letter of 27 February. There are quite a few questions you have asked and I will make sure we give you a full answer.
Q122 Rosie Duffield: We are hearing about an increase in cases where EEA partners or former partners of British citizens are finding it more difficult to access benefits compared to EEA partners of other EEA citizens, because British citizens do not have a right to reside. So EEA nationals are also facing difficulties, proving a right to reside where there is an abusive former partner who makes access to documentation such as passports difficult or where the complex rules are not applied consistently. Are you aware of that being a significant problem?
Amber Rudd: Yes, I am aware of that. I have seen a number of cases similar to the ones that you are highlighting or describing to me. It is a concern and it should be at the discretion of the decision-maker to be able to conclude that the partner who has left, who does not have the evidence, is eligible and I am making sure that they have sufficient guidance to ensure that that does not happen. It is an issue where one partner leaves the other and you are right, where the former partner is British rather than EEA it makes it more difficult, but I think we can make sure that the decision-makers are clear that they have the independence to make their judgments and should be able to do so, and I will make sure they do it.
Q123 Rosie Duffield: Those people will not automatically be penalised? Is the system tailored to deal with that, or are you saying that the Work Coaches will have to make exceptions?
Amber Rudd: I am saying that they should be able to make exceptions. In one of the Jobcentres I went to recently they told me a story about one of the decision-makers spotting a couple who—I am not quite sure how they judged it—looked like there might have been an issue of domestic abuse and they separated them and talked to them and were then able to help. Decision-makers where they have the confidence and can look out for that should be able to assist and should be able to make the right judgment.
Neil Couling: If it helps, I have followed the Committee’s considerations on this and spoken to some of the groups who have talked to the Committee as well. The cases to me that have been raised, the handful of cases, look like just mistakes that we have made. There is some rather helpful case law. I think it is Kerr v Department for Social Development, our sister Department in Northern Ireland, that makes it very clear that decision-makers can assume information where, because of domestic abuse, the person fleeing the domestic abuse cannot access the necessary documentation. These are tricky cases to administer because often the rights to reside, or the rights to benefit come through the former partner’s entitlements, so it is a hard job for the decision-makers but we need to do a better job of making sure they understand the law and how to apply it properly.
Q124 Chair: We have a question after my one. Amber, and probably Donna, it has come up in different ways in our questioning and that is about how we measure poverty. I want to ask you, given the work that Philippa Stroud has done with the Commission on trying to get a much more accurate and sensitive measurement, can you tell us what the Department is doing in this area?
Amber Rudd: I am interested in what they have done and of course I met up with Philippa Stroud to go through it with her. I am interested in the approach that they have taken in terms of essential costs as being part of how we measure poverty. We are going to take a further look at it. I am nervous about proposing, certainly at this stage or even further down the road, a change in how we measure it, because everyone will think we are cheating in some way. I do not want to rush in to do that, but I do want to have a careful look to see whether it is a better way and perhaps we should take a further look at it together.
Q125 Chair: I do not know if it is any comfort or not, she hopes, after discussions with you, to introduce her Bill in the Lords and I will take it through the Commons.
Donna Ward: We have discussed this with her and it is quite reassuring that she is not suggesting replacing all of the measures that we currently publish with this, but having this, as she says, as offering an addition and an improvement. I think that is very important, because a lot of stakeholders really fought to keep the statutory measures that we have at the moment. They all tell us something slightly different about the world and all of them are valuable. We are working very closely with Philippa Stroud and the Commission.
She did say that without the help of DWP statisticians this measure would not exist, and I think that is right. You will not be surprised that there are a number of hoops to go through for data to be made, national statistics, and the first stage of that is for Government analysts to get the code that they have used and to do some quality assurance and to see whether the data is good enough to at least start as experimental statistics. We are waiting for that code and that will be the next step that we take, but it has been a very close working relationship and we can see lots of the conceptual benefits to this new approach.
Q126 Chair: She felt and the case she made here before the Committee was that if you had this now, Amber, you would have an even stronger case in arguing with the Chancellor for funds.
Amber Rudd: Always useful to have.
Q127 Chair: It is going to be an approach that in a sense the Office for Budget Responsibility will begin to take it on in the way they do not take on the existing poverty data, and I think that would be useful.
Amber Rudd: I think it would be useful, as Donna said, to have it in addition to the existing ones and the Department has already been working closely with her, and we will continue to do that.
Chair: Great. One last question: the research you are doing on migration is really important to us, how you are doing it and so on, and I want Neil to finish by asking some questions about what the sample is going to be about, how you are going to measure and so on.
Q128 Neil Coyle: Yes, it is quite simple. You can answer now or please provide information afterwards. You have announced the Harrogate pilot. When exactly will it start and finish, so what is the timeframe for it and the other pilots that you say are coming forward? What are their terms of reference and how will the efficacy be monitored and scrutiny be available, including assessment of whether it increases the chance of people going into work and how do we access all that information? If this is genuinely around making it more effective as a system the more information you can share the better.
Neil Couling: I will have a go at answering this. We are starting in July, as planned.
Q129 Neil Coyle: In Harrogate?
Neil Couling: In Harrogate. We may need to go to some other locations. Those who are familiar with the roll-out of Universal Credit to Jobcentres know that we started in Sutton, moved to Croydon and then we moved to London Bridge—in your constituency, Mr Coyle—and then Harrogate was one of our early offices as well, up north. The plan is to start very small and to expand, and it is about learning, it is not about trying to get a representative sample and say, “Oh, if that happened here with this group of people then that is what will happen across the country”. It is designed to allow us to understand how we move people safely from legacy benefits over on to Universal Credit.
We have some other data sources as well that I am hoping to make available, because the Committee will be aware we have moved around 250,000 people off the live service on to full service and we will know. We are nearly done. There are about eight cases left on the live service now in payment as of last week and we will know from there things like we have spoken about before in this Committee, about dropout rates and what happens to those individuals. Do they come back and try to reclaim Universal Credit? The worry is that if we drop somebody they lose their transitional protection and they cannot get that back. We are determined to make sure that does not happen.
Q130 Neil Coyle: Nothing you have just said we would expect to be done differently for any significant benefit change, so what are the terms of reference for Harrogate? I assume the Jobcentres, the staff there, are being informed of what they are being expected to do. You must be able to share something.
Neil Couling: We are still designing the pilot. One of the things the announcement today allows us to do is to start talking with local stakeholders about the “Who Knows Me” concept and start designing how “Who Knows Me” works.
Q131 Neil Coyle: So it is not defined yet?
Neil Couling: No.
Q132 Neil Coyle: When it is, it will be shared with everyone?
Neil Couling: Of course, yes.
Chair: All right. A quick one from Steve McCabe.
Q133 Steve McCabe: This is prompted by something Mr Couling said there. We have taken a fair bit of evidence recently from organisations who have told us about people who have been wrongly advised to move to Universal Credit, where clearly if they had appropriate advice they would not have made that move because they were going to lose out. I accept these things happen, but one of the things no one has been able to tell us is why if something like that happens and you know that somebody is losing out and it has been a mistake you cannot switch them back?
Neil Couling: I watched that session as well and saw—
Q134 Steve McCabe: You do not watch them all?
Neil Couling: I am one of your biggest fans. I saw that evidence. I have heard of cases where people have deliberately triggered a claim to Universal Credit and it is possible to do that. Some have worked out that they are much better off on Universal Credit.
Q135 Steve McCabe: We are talking about the ones—
Neil Couling: Yes, I know. I am just trying to say that there are some isolated examples, we think isolated and we are checking on this because I am expecting that when I come back on natural migration where we have it wrong. In terms of—
Q136 Chair: The answer we want to know, Neil, there is nothing in the law that prevents you allowing those people who have been wrongly advised by your staff to go back, is there?
Neil Couling: There is, yes. There was a recent Court case, not last Friday but the Friday before, that ruled that there is no right of return there. The one exception—
Q137 Chair: Is that a return for those who have been wrongly advised by your Department?
Neil Couling: What we have done with the cases where we have found this has wrongly happened, so it is not a question of appeal rights and putting back, which is what that case was about, we have compensated the individuals for this, as I hope you would expect we would do. We do not have a policy. One of the accusations at the hearing was that we had some kind of policy to do this. We do not.
Q138 Steve McCabe: No, I do not think anyone thought that.
Neil Couling: I do not think you were accusing me of that, Mr McCabe, but back to Mr Stephens, why would I be worried if we were doing that? Because the resources would be unbalanced again because we do that. I think somebody said that there was going to be one million people on tax credits who would have to face a choice this summer about whether to stop their tax credits. That is not the case.
Q139 Steve McCabe: We just want to understand why the Department that is designed to help people, if it discovers that someone who through just a simple error ends up being worse off than they were why can you not just switch them back?
Amber Rudd: Because it is the legacy system to the old system. Eventually everyone is going on to Universal Credit. You would not put them back, and then put them back again. It is much better if they have been moved to Universal Credit to then compensate them and let them continue on it. As I said earlier, most clients will say to us afterwards they were nervous about it but they prefer it. I hope that would be the case.
Q140 Steve McCabe: Is anyone who is inadvertently moved and ends up worse off than they would have been if they had received the right advice entitled to compensation? Is that what you are telling us?
Amber Rudd: Where it has been our mistake that is what we have done, yes.
Q141 Steve McCabe: Every case like that that is brought to your attention where they received bad advice via the Department they are entitled to compensation?
Neil Couling: I am not going to make individual judgments in the Committee but—
Q142 Steve McCabe: I am not asking you to make judgments. I am asking is that the principle?
Neil Couling: Where it is our fault we pay compensation.
Steve McCabe: Thank you.
Chair: I was told that was going to be the last question. I hope that this is the very last question.
Q143 Ruth George: Secretary of State, it has been a really helpful session but I have been quite struck with the dichotomy between the evidence that you are getting and what we are getting. You say that most clients will say to you that they were worried about Universal Credit but now they think it is all right?
Amber Rudd: That is my anecdotal evidence, yes, when I speak to them.
Q144 Ruth George: I wonder how many clients are struggling with Universal Credit. We all meet them at our local food banks and some of the Committee travel around to find more people who are struggling with just how difficult and disempowering they find the system. Are you getting any of that feedback?
Amber Rudd: Sure, because some MPs take a different view and will come and tell me their own experiences. I have to say there are also a lot of MPs who come up and tell me how well it is working in their constituency. It does not mean it is perfect, but that it is working better than the combination it sought to replace. We always have to hold on to that, which is that it does replace a system with six previous benefits, three different places, and this is a simpler, more straightforward system. I do accept that the real challenge that we have is making sure that the move from the legacy benefits on to the new system works well for individuals and we have more work to do there.
Q145 Chair: Amber, how many voters in your constituency on Universal Credit come up and complain about it to you?
Amber Rudd: I have regular surgeries and in my new role I do find I get an extra amount of people who want to come and share their views about Universal Credit, so I have plenty of hands-on experience about it.
Q146 Chair: Who are worried about it? About the experience that they have had? That does not quite fit the image that you would like to have—
Amber Rudd: I know that people who are on low incomes for whatever reason are understandably nervous about a change in their income, from benefits or from low-paid work, whatever it is. It is our job in my Department to make sure that we have a system that looks after them as they move from the old to the new, and we need to do better at that. That is one of the key things I want to learn from the pilot.
Q147 Heidi Allen: Will you join us on one of our visits, Amber, if your diary allows it?
Amber Rudd: I do find I have plenty of opportunity to visit, but I will always look out for the opportunity to go along with you.
Q148 Chair: At the very beginning you used a phrase we have sometimes heard in this Committee. You said that you hoped to preside over and achieve Universal Credit, so that if any of your family were drawing it you would be happy with the consequences. A lot of us use that as a standard. If it is not working for me and my family it is not good enough for my constituents. Is that still your golden rule when looking at trying to improve this benefit?
Amber Rudd: Absolutely.
Chair: Thank you for all your time.