BENEFIT PAYMENTS (DELAY) (Hansard, 25 July 1979)

§ Mr. Andrew Bowden (Brighton, Kemptown)

I am pleased to have the opportunity of raising the subject of the delay in payments to those entitled to child benefit, pensions and other social security benefits.

I have no doubt that all hon. Members and Ministers are deeply unhappy about the situation that has prevailed for some weeks in the Department of Health and Social Security at Newcastle. It has led to a great deal of personal anguish and suffering and, indeed, hardship for tens of thousands of families throughout the length and breadth of the country.

I am pleased that my hon. Friend the Member for Ealing, Acton (Sir G. Young) is to reply to the debate. I understand why he is taking the place of my hon. hon. Friend the Member for Wallasey (Mrs. Chalker), who is unavoidably absent from the House tonight.

The fact remains that the position has been and still is serious and could get worse. The root of the problem lies at Newcastle and the operation of the computer. One reason for the situation is that too much has been done too quickly in the sense that the new pension scheme, the changes in rates and computerisation have come at the same time. Perhaps it would have been wiser not to have brought all these points to bear within 846 such a short period, thus creating a great strain upon the staff at Newcastle and upon the organisation of the whole Department.

The House will recall the appalling difficulties that were faced by the Swansea driver and vehicle licensing computer over a long period and the inconvenience which that caused to many of our constituents. It it vital, in my view, that Newcastle does not go the same way. I suggest that, after consultation with his colleagues, a Minister from the DHSS should go to Newcastle with technical advisers and experts and stay there until this situation is sorted out.

I hope that the Minister will not say that everything is moving in the right direction, that the problem is being sorted out and is virtually over, because that would not be in keeping with the evidence that I have obtained. It is certainly not the view of the secretary of the Civil and Public Services Association in Newcastle. He has made it clear that in his view there is no hope of clearing the backlog of work at present.

Last week the national secretary of the DHSS section of the CPSA was reported as saying: In our strike earlier this year the union didn't want to hit the sick and the poor. Now they are being thrust into the front line. That is supported by a copy of a letter which was given to me tonight by the hon. Member for Don Valley (Mr. Welsh). That letter, from a senior official at the DHSS child benefit centre in Washington and dated 11 July, reads: I am sure you will be aware that the child benefit payment computer was stopped by industrial action for five weeks covering the whole of April. Although we were recovering the backlog thus created quite rapidly we have been set back once more by the imposition of an overtime ban by the unions concerned from 18 June 1979. Furthermore, a significant number of hon. Members know that the problem has not been solved. Early-day motion 121, which relates to the decentralisation of child benefit, reads: That this House calls upon Her Majesty's Government to decentralise to local offices the system of issuing child benefit books since serious delays continue to occur at the central issuing office in Washington to the obvious detriment and hardship of many constituents of hon. Members. There is widespread concern in the House and among officials of the DHSS, the 847 trade unions involved and, indeed, a large number of people in the country.

It is, of course, totally wrong that the CPSA should hold to ransom some of the most vulnerable sections of our community, by overtime ban and restrictive practices which are making pensioners and those families entitled to receive child benefit suffer considerably. Whatever its members' grievances—and I accept that there are problems, that they are under great pressure, that there is some argument for increasing the rates of pay of the computer operators, and that there is even some argument for giving the Department in Newcastle and perhaps other parts of the country special exemption from the moratorium on staff recruitment—there can be no excuse for exploiting the sick, the young and the elderly.

In Brighton as a whole, 300 pensioners are getting their payments without new or replacement books. I pay my tribute to the way in which the Department's officers in my area have coped with the problem of the pensioners. I suspect, however, that it is only the tip of the iceberg and that there are many hundreds more in Brighton and tens of thousands throughout the country as a whole just sitting waiting patiently for their pension books to come, who have made no application for them. A large number of them are facing serious inconvenience. They have to get to the Department's offices, and for many of them that can be a long and difficult trip; it causes unnecessary expense to them.

With child benefit, we come into an area of slightly different problems. I have one case in Brighton where, for over three months, the family had nothing. Happily, in the last 24 hours it has received a Girocheque for over £100. But for a family living on a low income to reach that situation, in which it is owed £100 by the State, is disgraceful. It means that the family has not been able to pay the rent and has suffered considerable hardship.

These delays are continuing. I am concerned about the payment of emergency amounts. According to a report in The Guardian this week, the Department said: there should be no further delays in replacing child benefit books, though there were delays in other parts of the benefit system. Local officers had been told that where people 848 had been affected by delays at Washington they were eligible for emergency payments. That, I am sure, is true in some cases, but I ask my hon. Friend to confirm whether it is a fact that local officers of the Department have no authority to make payments of child benefit without authority from Newcastle, and that where a husband is in full-time employment and may well be on a very low wage no emergency payments can be made. It the problem is not solved rapidly, I ask my hon. Friend to ensure that help can be given to this group. It is difficult to quantify this problem in terms of human anguish, discomfort and suffering. I know that the Minister will be anxious to find an answer to this problem. I say to him that it must be found quickly.

§ The Under-Secretary of State for Health and Social Security (Sir George Young)

I should like to thank my hon. Friend the hon. Member for Brighton, Kemptown (Mr. Bowden) for raising the question of delays in payment of social security benefits and for doing so in such a reasoned and cogent way. My hon. Friend the Under-Secretary regrets that she is prevented by a previous commitment abroad from replying to this debate. She has been to Newcastle on several occasions and she is planning to spend two days there early next month, further to inform herself about the situation. She is, of course, in touch on a day-to-day basis with what is going on there.

The debate provides me with the opportunity to explain the present position, which I appreciate is rightly causing concern to hon. Members. The Government share that concern. First, let me explain the way in which social security payments are made and the numbers involved, so that the recent delays can be put in perspective. Some 20 million people are receiving some form of social security benefit each week. All but about half a million pensioners, who are paid at intervals of four or 13 weeks, receive their benefits by order book or Giro-cheque which are cashed each week at post offices.

The instruments of payments are issued from four sources. First, there are order books, or Girocheques, for payment of supplementary benefits and retirement pension combined with supplementary pension, sickness, injury and invalidity 849 benefits, maternity allowance and the first payment of widow's allowance which are issued from our local offices. So far as I am aware, these payments are being made normally.

Second, there are Girocheques for the payment of unemployment benefit. These are issued from the Reading and Livingston computer centres and local unemployment benefit offices. There have been delays of two to three days in some areas during the recent postal difficulties but payments are now being made normally again.

Third, there are order books for the payment of war pensions, attendance allowance, invalid care allowance, housewives' non-contributory invalidity benefit, family income supplement and mobility allowance which are issued from our central office in North Fylde. Apart from a few isolated cases which occur from time to time—mainly because we are not aware of a change of post office or address—there are no delays in the receipt of these books.

Lastly, there are order books for retirement pension, widow's pension and child benefit. These are issued by computer from our central office in Newcastle. These delays are the main concern of my hon. Friend. I start with child benefit. The standard of performance of the new child benefit centre at Washington new town was not initially satisfactory but it has improved steadily, until 28 March when there was an unofficial strike by senior data processors at the centre. This led to the complete stoppage of the issue of computer-produced order books for five weeks. This action was taken as part of a Civil Service industrial dispute over pay with our predecessors and special arrangements were made to enable post offices to make payments to parents whose order books had expired and who were awaiting a renewal book.

In addition, local social security offices made special payments to parents experiencing financial difficulty because they were without their child benefit book. This unofficial strike was totally unjustified as negotiations were still proceeding at that time on the pay issue. The senior data processors' strike ended on 1 May and the staff at Washington began the task of clearing the considerable backlog of work which had accumulated. Good pro- 850 gress was made by the staff working overtime in the evenings and at weekends. By the beginning of June, emergency payments by post officers were no longer needed because renewal order books were being sent to post offices three weeks before the due date of the first order.

There remained a backlog of work on new claims and changes of circumstances which was being steadily reduced. However, the executive comittees of the Society of Civil and Public Servants and the Civil and Public Services Association, the Civil Service unions representing staff at the centre, then imposed a ban on overtime working. This was in protest against the prospect of cuts in the size of the Civil Service. It was not really a dispute about pay. While all overtime is worked on a voluntary basis, the unions are fully aware that the consequences of the ban are serious and have an adverse effect on some families least able to bear it. The impact is greater this year because, in addition to the arrears of work from the period of the unofficial strike, overtime is usually necessary at this time of the year to cope with the extra work at the centre which accompanies the main school leaving period and coincides with the peak period of staff leave. Overtime was also needed at this time of the year during the family allowance era.

The root of the problem is not the computer, as my hon. Friend implied at the beginning of his speech, but the overtime ban. Because of this overtime ban there will continue to be delays in dealing with some aspects of child benefit work. I must assure the House that we are very conscious of the importance of this benefit to the family budget, and that every effort is being made to ensure that delays are kept to a minimum. In spite of the overtime ban, the staff are working exceptionally hard to achieve this in normal working hours.

There have been reports in the media that no child benefit order books are now being issued. This is just not true. There are, unfortunately, some cases of hardship which, for various reasons, do not get the help that we would like. My hon. Friend mentioned one or two constituency cases. Some families are being caused considerable inconvenience and distress. However, there should be no delays in payments for those parents whose order book expires, since 280,000 renewal order 851 books a week are being issued to post offices four weeks before the due date of the first order. There is some delay in dealing with claims for newly born children, but even here the centre is issuing order books for straightforward claims within about three weeks of receipt of the claim. More seriously, delays continue to occur where a change of circumstances is reported which affects the rate of benefit, but priority is being given to those claims in which the parent has forwarded the order book for adjustment.

As for the future, I have to tell hon. Members that the arrears of child benefit work will not be cleared as long as the overtime ban remains in force, although the centre will continue to give priority to those claims in which a parent has returned an order book. Local offices have again been reminded of their ability to make additional payments in the absence of a child benefit order book and to take particular care in cases where a parent is in receipt of supplementary benefit. I shall look into the circumstances that my hon. Friend described and let him know what the procedure should be. I should also tell the House that the number of parents who need to return their order books for adjustment should steadily diminish because of the introduction of a new computer system. The system provides an 18-week order book in place of the previous 52-week book, and enables an increase in the amount of benefit to he paid by an additional book rather than having to recall the existing book.

I turn now to the delay in the payment of national insurance retirement and widow's pensions. The first payment of pensions under the new pension scheme began to be made from 6 April this year. We moved on to a wholly earnings-related scheme and the calculation of a person's entitlement became much more complicated and involved a change to a new computer. This was, of course, a complicated operation. The design of the new programme and trials had been going on for some time, but the actual changeover to the new computer was planned to take place over the long Easter weekend of 13 April to 16 April.

This was necessary because, whilst the conversion was taking place, the computers could not cope with the intake of new information or issue any instru- 852 ments of payment. The scale of the operation can be gauged from the fact that, in a normal week, Newcastle central office issues 720,000 instruments of payment for retirement and widowed pensioners in the United Kingdom.

An overtime ban by staff, which was part of the same dispute that stopped the child benefit computer in April, meant that the computer conversion could not be done by working overtime during the Easter weekend. Instead, this had to be done in normal working hours in the ensuing weeks. During this time the normal work of the computer, including the issue of instruments of payment, could not be carried out. The position was aggravated by two one-day strikes, also part of the industrial action arising from the Civil Service pay dispute before we came to office. In the event, the computer conversion went extremely well.

The overtime ban was lifted on 2 May and full-scale overtime, including weekend working, was put into operation. By the middle of May the issue of renewal order books was two weeks behind normal timetable and payable orders were about nine days behind.

Arrangements were made with the Post Office for the order books to be issued by first-class post so that they could be in post offices for collection by pensioners by the date of first payment. Local offices were kept in touch with developments so that those pensioners unable to obtain their pensions in the normal way were able to obtain payment by Girocheque from the local office. As a result of considerable effort on the part of staff, by 15 June the issue of renewable order books was only two days behind the normal timetable, and payable orders were being issued on time.

Matters were made worse by postal delays in some parts of the country. These postal difficulties have contributed to pension books not reaching their destinations in time, because our renewal order books are issued by second-class post and were therefore subject to that delay. There are, however, standing arrangements for payments to be made by Girocheque from local offices if a pensioner is in financial difficulty because he is without an order book, and local offices have not hesitated to make payments to pensioners in that way recently.

853 The backlog of work that built up during the changeover to the new computer system has resulted in delays in processing new claims to pensions. Where order books could not be sent to post offices in time, emergency payments were made by Girocheque from local offices. There is now only a very small backlog on cases where a person is due to retire within the next five weeks. There is still some delay in handling changes of circumstances notified by pensioners, but in the great majority of these cases local offices are making emergency payments by Giro-cheque.

My Department has had discussions with the Post Office about postal delays on order books, and arrangements have been made for the order books to be cleared urgently. That has improved the situation, but in some areas there were still delays in a small number of cases. A meeting with the Post Office was held last week to see how these residual delays could be eliminated. The Post Office has introduced new arrangements for sorting and despatching the pensions and child benefit order books from Newcastle, and has reminded its staff of the urgency of that mail. It is confident that the situation will improve.

The delays in the receipt of benefit payments are reducing and now affect only a small proportion of beneficiaries. But we cannot be satisfied whilst there are any delays at all, and I am sorry that some beneficiaries have been put to considerable inconvenience. My Department will continue to monitor the position and make weekly reports to my hon. Friend the Under-Secretary of State. All practical steps will be taken to reduce or eliminate the delays that are still occurring in some areas. Meanwhile, if any pensioners or beneficiaries are in financial difficulty, they should contact their local social security office about receiving a special payment.

Before leaving that subject I should like to comment on an article in the Daily Telegraph yesterday entitled "Benefit Increases Delayed". When my right hon. Friend the Secretary of State announced the increased rates of pensions and benefits on 13 June he warned the House that, as the announcement was 854 made some weeks later than the usual date due to the election, in some areas new rates of supplementary benefit would not be in payment until a few weeks after 12 November. He made it clear that any arrears of benefit would be paid from 12 November. That remains the position, and it relates only to supplementary benefit increases. We expect all other increases of pensions and benefits to be paid on time.

We are in the early stages of a major review of the administration of social security benefits. In the longer term we want to see greater use being made of computer and related technologies to help staff provide a better service to the public. More immediately, we are looking at our arrangements for paying benefits to see whether changes in the methods, and possibly the frequency, would enable us to provide a more efficient service to the public. It is too soon to say what will emerge from that examination, but one area that is being studied closely is the scope for making more use of direct payment of benefits into bank accounts. As more and more beneficiaries have bank accounts, that may prove to be a more efficient and reliable way of paying benefits to the public.

Finally, I should like to assure the House that we—and that includes the staff concerned—are doing our best to mitigate the effect of the overtime ban imposed by the unions' executives. In my view, the overtime ban is totally pointless. It is intended as a demonstration of opposition to Government plans to reduce the size of the Civil Service, but we shall not be deflected by these methods from pursuing the policies for which we were elected. The brunt of that action is borne by innocent families, many of whom suffer unnecessary anxiety and in some cases real hardship. We shall, of course, continue to do our best to reduce delays, but there is a limit to what we can achieve and, as I have said, as long as the unions continue to enforce the ban on overtime some delays are inevitable.