Social Security Operations

HC Deb 17 May 1989 vol 153 cc318-32 3.31 pm

The Secretary of State for Social Security (Mr. John Moore)

With permission, Mr. Speaker, I shall make a statement about major changes to the management of social security operations.

Social security is a massive business. It accounts for over £48 billion of benefit expenditure and £2 billion on administration—that is fully 10 per cent. of gross domestic product. Some £33 billion is collected through national insurance contributions. It is one of this country's largest employers with over 80,000 staff. One way or another, social security affects the lives of practically every family in the country.

The Government are totally committed to making that business work well—for everyone. We want the offices of my Department to provide a better standard of service for the public, to know more precisely what performance is expected of them and to use their resources more efficiently. That is why, last July, I launched a study into whether a better social security service could be delivered through more autonomous operations, under my overall direction. That is the approach envisaged in the "Next Steps" report which my right hon. Friend the Prime Minister announced to the House in February last year. We have concluded that it offers the best future for the social security service.

I am today placing the report of that study in the Libraries of both Houses. It focuses on the core social security functions of collecting and recording national insurance contributions and of assessing and paying benefits. The report highlights powerful potential benefits from agency status including far greater clarity about roles, responsibilities and objectives, more personal responsibility and accountability for the quality of service for the public, a more dynamic and flexible approach to improving efficiency and performance and scope for staff to do a better and more satisfying job. The report concludes that virtually all the operational tasks of my Department could be run more effectively on the agency model.

We shall pursue these opportunities vigorously. However, we do not intend to await the creation of the agencies before making further improvements in services. I am also, therefore, laying in the House Libraries today a clear definition of our plans for the services we aim to achieve—a definition of service. I will also be sending a copy of this to all Members of Parliament. I will expect it to be the guide to the actions of the entire social security organisation. We are backing up that commitment with concrete targets for what we intend to achieve in specific areas over a number of years.

When the agencies are established, the Secretary of State will remain accountable to Parliament and the public for all aspects of social security administration and policy. Within the framework of ministerial policy there will be maximum delegation of responsibility for operational matters. The computer and communications operations of the DSS are enormous, employing about 3,000 staff, with an investment programme of £1.2 billion. They have already been reorganised into a single unit. I will go further and give it agency status by April 1990. National insurance contributions are a large source of revenue. I will organise the staff collecting and recording them in a single management unit with a target date of April 1990. This unit will either become an agency in its own right or fall within a benefit agency.

Over 20 million people get benefits. Putting their delivery on an agency basis will be the biggest single initiative under the "Next Steps" programme. I propose to establish an agency for benefit operations by April 1991. These changes will put into agencies about 80,000 people —one sixth of all non-industrial civil servants—and will leave the headquarters with a relatively small central core. The detailed arrangements, including those in respect of finance, pay and personnel, will be the subject of further work. As the Government have made clear already, staff in the agencies have the assurance that they remain in the Civil Service. There will be no immediate changes, and any proposals affecting staff will be discussed with staff and their representatives.

We intend that, when the agencies are established, chief executives will be selected by open competition and will be appointed on limited term contracts specifying clearly defined objectives and budgets.

The initiatives that I am announcing today, together with plans already in hand, amount to a coherent strategy to transform the quality of service that social security offers. Last year's benefit reforms put the benefit system itself on the right footing. Computerisation will give us the modern tools to do the job. The definition of service that I announced today, with the clear targets underpinning it, firmly establishes the objectives that we need to pursue. The creation of agencies will provide the management framework best able to realise them. It is a programme from which the public and our staff alike stand much to gain. I hope that it will receive the support of the whole House.

Mr. Robin Cook (Livingston)

I begin by seeking to find common ground with the Secretary of State and welcome that, at least today, he has not announced the privatisation of the Department. For the removal of doubt, I therefore invite him to assure the House that agency status will not be a staging post to the private sector. May we have his assurance that the agencies will remain non-profit making public agencies and that the staff will retain the Civil Service status that he has promised them? Does he accept that the payment of pensions and benefits must always remain a public service and not become a commercialised business?

The Secretary of State will be aware that there is great sensitivity about the idea of making the counter operations of benefit offices responsible to an agency. The calculation and timely payment of benefit to our constituents is of legitimate political concern. The Secretary of State has informed the House that Ministers will remain accountable to Parliament. For the avoidance of doubt, will he assure us that, when hon. Members refer to individual constituents, Ministers will not retire behind the formula, "It is a matter of day-to-day administration of an agency", and thereby escape their obligation to ensure prompt and reliable payment of the benefits approved by Parliament?

The Secretary of State must appreciate that there will be great disappointment in the country that, in his statement, there is not a single commitment to a better quality of service to the claimant—[Interruption.] There is not a single reference to quality in the statement. Does the Secretary of State recall that, last year, the Moodie report found that the average waiting time in social security offices was 70 minutes, and sometimes half a day, that six out of seven claimants complained that they were overheard when being interviewed, and that many local offices remained "forbidding and sleazy"? What obligations will be on the agency to improve the privacy of interview, raise the standards of facilities and access, and widen the availability of minority language? Is the sole serious obligation in the contract to be to stay within a fixed budget that will further squeeze the quality of service?

Can the Secretary of State deny the story on the tapes this afternoon that what he has announced today will provide for a further reduction in the cost of administering the benefits, which cannot improve the quality of service to the claimant? Is the Secretary of State really satisfied that, having reduced himself to a Gideon's army of a few hundred civil servants, he will have access to enough evidence of how in practice the system works? Is the Secretary of State not aware that his speech last week on poverty has already raised enough doubts as to whether he is in touch with reality, without putting himself further out of touch with the people in the front office of his Department, who talk daily to people in real poverty?

Does the Secretary of State not realise that his statement misses the simplest way to provide for more efficient management of welfare benefits, which is to reduce dependence on means-tested benefits? When will he and his colleagues recognise that the way forward in welfare—to an easier system to administer and to a system that would provide better dignity for the claimant—is not by constantly patching up the safety net of a means test, but by serious increases in pensions, unemployment benefit and child benefit?

Mr. Moore

I am conscious that the hon. Gentleman wanted to avoid welcoming what clearly is a statement that will offer not only to the staff, but to the public as claimants of benefit, a greatly improved service. He, therefore, sought to divert the debate to matters entirely different from those contained in the statement. I do not complain in any way about that, but I hope that he would, for example, accept, as I believe most hon. Members would, that a cost-effective service, however it is offered, is obviously in the interests of the taxpayer as well as of the claimant. Decent men and women should not expect to see their money wasted when it comes to the delivery of a decent service.

I made it clear in my statement, and I repeat, that the staff working in agencies will continue to be civil servants. That is obviously important, and is why I put it in my statement. Their existing and acquired rights and conditions of service would be respected.

The hon. Gentleman asked specifically about the privatisation of the core aspects of the benefit delivery system. As with other Members, he will not have had time yet to read the full report that will be placed in the Library, but that is covered in chapter 3. I shall paraphrase the reasons why the Government decided to go the way that they went. As the report said, we thought that the complete privatisation of contracting out was regarded as impracticable. It is difficult to conceive of the day-to-day business of quasi-judicial decisions on customers' entitlements being handled by the private sector. I, therefore, recognise his point on that matter.

I remind the hon. Gentleman that a good deal of work, especially in the computing area, is already contracted out. Obviously we would expect that to continue, and to continue with market testing in those areas.

As I see the statement, it will enhance the accountability of the social security operations to Parliament and to the public. It will in no way diminish the absolute responsibility of Ministers to the House and of Ministers to Members of Parliament for policy and for methods of administration. Obviously, most Members of Parliament, in their attempts to help their constituents, deal initially with the benefit offices. However, after the statement, as before, Members of Parliament have the absolute constitutional right not to follow that procedure. There will be far greater clarity of the process of decision-making and of responsibility. Another source of accountability will be through the chief executives of the agencies, who will have a direct responsibility and who will be able to report to the Public Accounts Committee. The statement will enhance accountability to Parliament.

I wonder when the hon. Gentleman will welcome a reaction that flows from the Moodie report, which I established because I was dissatisfied with the level of service that my benefit offices were giving. Consequential upon that, I asked for a study and I acted on the basis of that study. I asked in July—and I announced to Parliament last year—for an examination of the possibility of enhancing the service through agencies. The report, as published, is being carried out in its entirety by the Government, because they believe passionately—as the note that I shall be sending to all my staff and to Members of Parliament shows—in an improved service to customers. That is the intent behind the statement.

Sir David Price (Eastleigh)

I am sure that my right hon. and hon. Friends are grateful to my right hon. Friend for his announcement today and for his attempts to try to improve the administration of social security. Why have my right hon. Friend and his colleagues in the Treasury not gone the distance on improving the administration of social security and followed the recommendations of the all-party Select Committee, which reported to the House in 1973–74 on tax credit? Bringing together social security payments with tax benefits in a single system would offer numerous advantages, not least a simpler administration, which seems to be the purpose behind my right hon. Friend's statement.

Mr. Moore

I am grateful to my hon. Friend and I know of his diligent and long service to the Select Committee. I believe that there is a great distinction to be drawn and at some stage I would be only too happy to debate, privately or publicly, with him the 1973 report's recommendations. This statement represents an attempt to follow through the outstanding efforts of my right hon. Friend the Minister for the Civil Service to see how we can enhance, in other ways, different Government Departments' services to the public. Above all others, my Department is in daily contact with millions of our fellow citizens. I have been dissatisfied, despite the valiant efforts of our staff, about how we have served our fellow citizens. My statement represents a clear and coherent attempt to make sure that, in the long term, we correct that deficiency.

Mr. Ronnie Fearn (Southport)

Can the Minister confirm that £22 million was wasted the last time he employed 235 consultants for his last exercise? Will he also confirm that staffing levels—I emphasise levels—will be maintained in the offices that are created? Will he also confirm that the information that is stored will not be used for commercial reasons?

Mr. Moore

The hon. Gentleman has made three different points, but I do not begin to recognise his first point. The introduction of computer technology—the largest development in the western world—that is currently being undertaken in my Department, with the help of outside consultants, has been and is an outstanding success. I cannot make a specific commitment about the way in which different offices in different parts of the system will be staffed. The hon. Gentleman will be aware that, for example, in the past 18 months my Department's number of staff has gone from 94,000 to 85,000 while we have seen a major reduction in work consequential on the reduction in unemployment. We have also witnessed the first stages of the introduction of a much improved computer technology system. Obviously, that system carries with it further reductions in staff. Therefore, I cannot make any assumptions about staff levels, but they will be those that seek to address the problems identified in the statement—how to give a better level of service to our customers.

Mr. Peter Thurnham (Bolton, North-East)

Can my right hon. Friend say more about how the Public Accounts Committee will be able to examine the performance of the new agencies against the targets set so that hon. Members on both sides of the House can clearly see the undoubted improvements that will flow from the changes?

Mr. Moore

In the past one of the criticisms of my Department by the PAC was that it was unable to interrogate, debate and discuss matters with the executives who run many parts of the benefit system. The agencies' chief executives will be accountable to the PAC and I am sure that the Committee and the House will welcome that. That does not, however, in any way diminish the Secretary of State's ultimate responsibility for the agencies. Beyond that, the targets that I will lay in the Library in the near future will illustrate—in the backing of the service—the overall strategic goals that I have set for the operation.

Mr. Merlyn Rees (Morley and Leeds, South)

What are the implications of the statement, which we have not yet read, for the nature of his Department? Does it not mean that the nature of his Department will be greatly altered and that it may have a profound effect on, for example, Cabinet status or something of that kind?

Mr. Moore

I know the right hon. Gentleman of old and I know that he has not said that in any way other than in a supportive tone. The future functions of my Department, post the agencies' establishment, will relate not dissimilarly to the functions of other headquarter Departments, that is, to programmes, development, policy advice, central resource allocation, performance monitoring and strategic planning. I expect that my central headquarters Department, excluding the appeals side, will, at some stage, have a staff of roughly less than 2,000. Obviously I am considering still further relocations of parts of that reduced headquarters structure from London and I know that that will be of interest to the right hon. Gentleman and to other hon. Members representing other parts of the country.

Mr. Ray Whitney (Wycombe)

May I congratulate my right hon. Friend on introducing some much needed new thinking into the important and massive task of distributing our social security system. Will my right hon. Friend assure the House that. in implementing these interesting proposals, he will engage in full consultations with the staff as he proceeds?

Mr. Moore

Absolutely. I thought that I had made that quite clear in my opening statement. Clearly, we shall need to consult the staff. I stressed in answer to the hon. Member for Livingston (Mr. Cook), that the staff will retain their position and, therefore, their existing and acquired rights will be respected. Obviously, I shall want to consult fully with the staff.

Mrs. Audrey Wise (Preston)

Instead of glorifying in staff cuts, why will not the Minister recognise that the problems faced by benefit offices are that there are insufficient staff, who are not properly paid and have to spend much of their working time telling those in need that their needs will not be met? Why will he not address these central problems?

Mr. Moore

I wonder whether the hon. Lady, who tries to exercise her mind on these matters, could take a slightly less myopic view. For example, she might look at two areas that reflect the great improvement which our excellent staff have achieved in the past two years. The processing of supplementary benefit claims was taking on average seven days; income support now takes on average, five days. My aim is to reduce that period to three days. We have already reduced supplementary benefit error rates by a quarter with the introduction of income support and I am aiming to halve that again. The pattern of progress during the past two years illustrates the real achievements of our staff in their handling and managing of the benefit system, as opposed to the appalling description of the system given by the hon. Lady.

Mr. John Redwood (Wokingham)

While I welcome the proposals, may I ask how they will improve the service quality for the claimant and will they include, in view of the state of some offices, a major programme of property renewal and refurbishment?

Mr. Moore

My hon. Friend might have noticed that, over the past year or more, there has been a substantial improvement in many of the offices in our country. We have spent a considerable amount of money and, obviously, I shall be looking to improve the overall facilities. Unless staff work, and claimants attend offices, in decent conditions, they cannot expect to receive the respect which they merit.

With regard to better services to customers and the general public, the delegation to the lowest possible level of decision-making powers on financial and personnel matters will give quicker and more sensitive responsiveness to local needs. Clear objectives for quality, which will be in the targets, and timeliness of service will be expressed as measurable performance targets. Such improvements will enhance and clarify the sort of service that claimants should expect.

Mrs. Margaret Ewing (Moray)

Will the Secretary of State accept that, when he talks about clear targets and objectives from the point of view of administration, it would be helpful if he would consider those against the background of a definition of poverty, at least in his terms, and a strategy for the eradication of poverty in this country? What consultation has he had with the Scottish Office and what implications will this statement have for the administration of social security north of the border?

Mr. Moore

As I am sure the hon. Lady will know, I am responsible for Great Britain in this matter. Having said that, there has been detailed discussion with the Scottish Office throughout because this is to be extended throughout Great Britain. On the hon. Lady's first point, I am sure that in her rational, as opposed to her political mind, she would not begin to suggest that a third of the nation are in poverty.

Mrs. Margaret Ewing

Oh, yes, I do.

Mr. Moore

She would not begin to suggest that because the absurdity of that suggestion would detract from the serious efforts made by those of us to care effectively. We have been able to add to those efforts because of our economic success. It ill behoves Opposition Members, who in the poverty of their economic failure are unable to help people in real need, to pander to such nonesense.

Mr. Michael Jack (Fylde)

My right hon. Friend is to be congratulated on the courage of his innovative suggestions. Can he assure me, however, that under the new arrangements the great body of knowledge about the effectiveness of the system, and whether each benefit meets the objectives that it was set to achieve, will not be lost? Will staff be involved in feeding back information about how well the benefits are doing their job in the community?

Mr. Moore

My hon. Friend has detailed personal knowledge of these matters, particularly from his constituency experience. He has drawn my attention many times to the obvious reality that staff in our benefit offices and headquarter operations—whether in north Fylde, Newcastle or elsewhere—have knowledge that is very important to the judgment of policy. I shall continue to ensure that we use that knowledge in policy decision-making.

Mr. Brian Sedgemore (Hackney, South and Shoreditch)

Now that the Secretary of State has abolished poverty by operational decree, has he any plans to abolish misery and disease in like fashion, and will these agencies help?

Mr. Moore

The hon. Gentleman's remarks are less amusing when we come down to the reality of what I am trying to do, to which he does not seem to have addressed himself at all. He seems utterly uninterested in the 80,000-odd staff involved in this significant and important change, and in the 20 million-odd beneficiaries who are obviously more than interested in such a clear indication of improved services. That contemptible lack of interest is reflected in the Labour party's failure ever to be regarded as more than an irritant, rather than a party with a serious opportunity of taking office.

Mr. Lewis Stevens (Nuneaton)

I congratulate my right hon. Friend on his proposals. It is particularly pleasing that there is to be a genuine delegation of his operational function to those who know best how to use it, the people on the ground. May I ask him to ensure, however, that one of the objectives of the agencies will be to give clear guidance and information to claimants?

Mr. Moore

I shall certainly take notice of that point. My hon. Friend is very much involved in these matters, and, when we develop the framework documents that will be the underlying documents for agencies, what he has said will be a significant consideration. My hon. Friend knows that when I have been dissatisfied with take-up I have not been afraid to spend taxpayers' money to try to encourage additional take-up, but information and help for claimants are an important feature of the overall benefit system.

Mr. Harry Ewing (Falkirk, East)

Will the Secretary of State confirm that what he is suggesting is merely an administrative matter, and that no claimant who is at present refused a grant from the social fund will be given such a grant by the new chief executives to whom he has referred? If that is so, does the right hon. Gentleman not understand that when we talk of delivering a service we must also talk about the product that we are delivering? The biggest problem for DHSS office staffs over the past few years has been the longer time that it takes to interview desperately worried people who have been badly affected by the changes in the family support system that the Government have introduced, and I know that the Secretary of State will address his mind to that.

May I also ask whether members of staff allocated to work for agencies will continue to be subject to central pay negotiations, and that no attempt will be made to break up the negotiations that now affect the Civil Service?

Mr. Moore

There are two different points. I would put the hon. Gentleman's first question in an entirely different way: the people—nearly 1 million—who already benefit in the first year from the social fund will continue to benefit under the same arrangements that now exist. As for his second question, I think that he will recognise that new consultative arrangements will need to be negotiated for agencies. We intend industrial relations matters to be resolved as far as possible within the agencies themselves.

Mr. Nicholas Bennett (Pembroke)

Coming on top of the simplification of the system last year and the introduction of new technology, my right hon. Friend's reforms are particularly welcome. When does he expect to be in a position to introduce such facilities as cash dispensers, so that claimants are able to obtain money that is rightly theirs as quickly as possible?

Mr. Moore

I think that there is a distinction between the structural changes that I have been discussing and the method of receipt of payment. We have been looking at and have already done some work on alternative methods of paying benefits and that work suggests that in the longer term smart cards might have potential. My Department and the Post Office have jointly been carrying out an assessment of the financial implications of using smart cards, but at this early stage it is not clear whether they would represent better value than automatic credit transfer. About a third of all new pensioners and a third of new child benefit recipients are going for automatic credit transfer. I am interested in pursuing and looking at different methods of payment receipt as long as they are cost-effective and helpful to claimants. That is what our service is all about.

Mr. John Home Robertson (East Lothian)

Is the Secretary of State aware that the experience of many claimants is that ministerial statements about cost-effectiveness tend in many cases to point to centralisation and remoteness? Is he aware that in my largely rural constituency there is no office of his Department and that some of my constituents have to travel as much as 25 miles to the so-called local office of the Department? May we have an assurance that the measures he has announced will not lead to further remoteness and more centralisation? Will he say whether there will be any decentralisation of jobs to Scotland? As his Department has abdicated its responsibility to give advice to people such as my constituents, and as that work is now being done by citizens advice bureaux, will the Department provide some extra funding to CABs?

Mr. Moore

I was trying to say earlier that being cost-effective does not necessarily mean giving a better but rather a more efficient service. The whole ethos of the statement is to seek to produce better services for customers and the general public, more satisfying jobs for staff and more discretion for local managers. Within that structure I would not want to be specific about what happens in any particular part of Great Britain. The hon. Gentleman will be aware that one of the decisions that I made recently about the relocaton of jobs from parts of the London office area into new service centres was to locate a major new centre in Scotland, Obviously, before making the decisions that I shall have to take about moving more headquarters staff out of the London area, out of the south-east, I shall look carefully at Scotland and other parts of the country. The service given by our staff in our Scottish office is excellent.

Mr. Kenneth Hind (Lancashire, West)

I welcome my right hon. Friend's announcement and hope that it will result in an improvement in the service to claimants at DSS benefit offices. His statement about the relocation of some of these agencies out of London will be greatly welcomed by many hon. Members who represent constituencies in which unemployment is higher than necessary. I hope that he will seriously consider some relocation in the north-west where, as he well knows, some of his offices already enjoy good relations.

Mr. Moore

I can say to my hon. Friend what I said to the hon. Member for East Lothian (Mr. Home Robertson). I have already made a decision to move one area centre to the Wigan area. It is not quite in my hon. Friend's constituency, but it is certainly in a part of the country with high-quality staff and it welcomes that relocation.

Mr. Max Madden (Bradford, West)

Is the Secretary of State aware that nothing he has said today will wipe away the suspicions of millions of people who are living in poverty that he and his ministerial colleagues are completely out of touch with the plight of those people and the conditions in which they live? I would have been very pleased if he had announced that at least one day a week would be set aside for the Secretary of State and his ministerial colleagues to come to places such as Bradford to talk to claimants who are tired, desperate and very angry about the difficulties that they face in getting what they are entitled to. I should like Ministers to talk to the harassed and tired advice workers who are desperately trying to get help for those people. Why does the Secretary of State not get away from this Palace of Westminster in which he lives and meet the people who are trying to get the help which he says he is so anxious to give them?

Mr. Moore

I greet that contribution with sadness and I shall not react to the cumulative venom, irritation and bitterness of the hon. Gentleman who does not seem in any way to address the statement that I made, the intent that I seek to serve or the issues that concern us.

Mr. David Nicholson (Taunton)

Does my right hon. Friend recognise that following his most positive speech last week, about which I participated in a highly constructive discussion on the Kilroy programme this morning, the object of his Department must be to deliver a more effectively targeted system and, in particular, to bring to those who are entitled to it the excellent benefit of family credit? Does he also recognise that it is most important to maintain or raise where necessary the morale of DSS staff'? I have in mind the staff in my constituency DSS office in Taunton, who provide an excellent service for claimants.

Mr. Moore

My hon. Friend is right. I welcome his contribution on the Kilroy programme which, unfortunately, I was unable to see. My hon. Friend is right to distinguish between the important way in which the increased wealth of the country has been directed to helping those in genuine need and some of the nonsense that we sometimes hear in public debates. Today I am concentrating, as I know my hon. Friend would wish me to, given his knowledge of his Taunton office, on how we more efficiently, effectively and fairly deliver a better level of service to those whom we seek to help through our benefit system.

Mr. Jim Cousins (Newcastle upon Tyne, Central)

Does the Minister accept that during the last few difficult years one of the most important centres of operation of his Department has been on Tyneside, which has borne the brunt of the administration of many of the changes? Is he prepared to come to the north-east to discuss his proposals and reassure people there? In that area, management, employment and training opportunities centrally depend upon the employment that his Department provides and accommodation there costs a great deal less than the £50 a sq. ft. that it costs in the Strand.

Mr. Moore

I do not know whether the hon. Gentleman knows this, but since I have been in this job I have been to the north-east many times, specifically to visit my excellent centre of operation in the Newcastle area, and most of the units in that area. The hon. Gentleman knows that we have more than 10,000 staff there and that we are probably the largest employer in that part of the world. We have excellent staff working in first-class conditions and doing a good job for the citizens of our country. That is one of the reasons why for the last two years I have been determined to ensure that such parts of the country benefit from the kind of relocation in which I have been engaged. I know that the hon. Gentleman will welcome the training opportunities and the improvements for staff consequential upon this decision.

Mr. Neil Hamilton (Tatton)

By his disappointing response to my right hon. Friend's statement, has not the hon. Member for Livingston (Mr. Cook) demonstrated the intense conservatism, not to say the reactionary nature of his outlook—

Mr. Speaker

Order. Questions must always be related to the Minister's responsibility.

Mr. Hamilton

I shall come to the relevant part of my question in a shorter time than that taken by the hon. Member for Livingston. In opposing the perestroika within the Department of Social Security which my right hon. Friend has proposed, the hon. Gentleman seems to prefer the preservation of bureaucratic empire to the efficient delivery of service to the claimant. My right hon. Friend should be consoled by the fact that after a time lag of 10 years the Labour party adopts the whole of Conservative party policy. By the year 2000 the hon. Member for Livingston will understand what we are trying to do.

Mr. Moore

Far be it from me to comment on the innate structural conservatism of the Opposition. My hon. Friend makes a fair point. We are attempting to think through in the latter part of the 20th century what we should be doing in the structures that we have to help staff and claimants. I had hoped for slightly less reactive response from the Opposition. They should have thought more carefully about what we are seeking to do.

Mr. Peter Pike (Burnley)

Does the Secretary of State accept that the main objective of the social security system must be to serve claimants? M any of them will be fearful that once again this change will result in massive savings to the Government while many claimants will be worse off. The Minister should address himself to the priority of ensuring that there are sufficient officers in the local offices to deal with the public and to the fact that changes in the rules and regulations are preventing many people from getting the assistance to which they are entitled and which they need.

Mr. Moore

I wonder how on earth the hon. Gentleman relates the first part of that rather prejudiced question to the reality that over the last decade a bigger proportion of a more successful economy, a bigger GDP, has been devoted to helping people by way of the social security system. Obviously, I do not expect him to say that in public, but I hope that in private he will consider that point. The statement is not concerned with increasing or decreasing that amount. It is concerned with how we effectively use structures and systems to deliver benefits and ensure that claimants are well served.

Mr. Richard Holt (Langbaurgh)

My right hon. Friend's statement will be welcome if for no other reason than that it may help to eliminate the problem that I had last weekend when a constituent brought to me a round robin letter from the DSS printed "Dear", with "Mr. Chapman" written in, saying that it regretted to advise him that, after five years of miscalculation, he owed the DSS £200-odd but that it would let him off for four years and that he would have to pay for only one year. If we can eliminate such nonsense by having agencies, it will be very welcome.

Will my right hon. Friend take the opportunity to rebut the civil servants in his Department who wrote a report saying that if senior civil servants went to live in the north-east of England they would find it an alien culture? If they are to have better industrial relations with the 10,000 people in that part of the world senior civil servants ought to relocate there.

Mr. Moore

On the last point, I obviously do not know of the document to which my hon. Friend has referred. If he will let me have it, I may be able to comment. It does not fit with the fact that the largest single centre of operations of my Department is in the north-east, as I said earlier. I have said time and time again, as have my officials, that we are delighted with the surroundings and with the staff. We have excellent support and contributions from them. I trust that my hon. Friend will welcome the enhanced responsibility and the greater delegation of responsibility that will enable us to get better results for his constituents from our excellent staff.

Mr. Dennis Skinner (Bolsover)

Has the Secretary of State checked the position with the Common Market? Is he aware that if the Government do not check things out with the Common Market bureaucrats, they may end up as his right hon. Friend did yesterday being out-voted 11:1? Does he recall that the Common Market overturned the position on the invalid care allowance? Does not he understand that the Common Market has a stranglehold over the Government and that he should check that everything is all right so that we do not have to consider orders late at night? Which agency will be in charge of the provision of cardboard boxes on the Embankment?

Mr. Moore

I must draw the attention of my right hon. Friend the Prime Minister to the utter and complete support that the hon. Gentleman clearly wishes to give her. No stronger endorsement of her actions on the Community could have come from the House. I will not check with the NUM executive before I make further decisions.

Mr. Julian Brazier (Canterbury)

I welcome my right hon. Friend's thoroughly sensible reforms. Will he confirm two things? First, will he confirm that, for the first time, we shall have in this country a clear arm's length relationship between those responsible for delivering the service and those responsible for monitoring its quality? Secondly, will he confirm that in considering the quality of service being delivered it will be possible to introduce competitive comparison so that we can see which parts of the country are better than others? In such a comparison I am certain that the DSS office in Canterbury, with which I have had many dealings, will come out well.

Mr. Moore

As I have said two or three times, clarity of responsibility and the way in which it is delegated will improve the service that can be given. Clearly, local managers will want to look at the nature of their targets and the degree to which they can achieve the national targets that will be set. We shall have to consider carefully whether these should be published. Obviously there will be special circumstances in some areas with particular difficulties, and it may be invidious for some parts of the country to have those published. I shall consider the point because the way in which targets are adhered to is the way in which service is improved. Therefore, it is an important feature of the proposals at local as well as national level.

Mr. Tam Dalyell (Linlithgow)

How much are the chief executives to be paid? Will the proposal not be damaging to the morale of excellent managers? Most hon. Members have first-class managers in their areas, as I do in Bathgate. They are extremely helpful and skilful and have given their lives to their jobs. Will not their morale be dented, to say the least, if chief executives are drawn from outwith the service?

Mr. Moore

I did not say that they would be drawn from outside the service. I said that there would be open competition, which is entirely different. I, like the hon. Gentleman, have the highest regard for many of the senior civil servants with whom I have had the privilege to work over 10 years. I trust that they will have no difficulty facing the competition that we are talking about. The framework documents will deal with the way in which we develop performance-related pay within the Civil Service. We shall consider all that with our friends in the Treasury over the next few months. I do not believe that the devolved responsibility that we are talking about will do other than encourage the performance that the hon. Gentleman and I expect to see from the Civil Service.

Mr. Tony Favell (Stockport)

My right hon. Friend's plans to streamline the service and to make the lives of those who work in it more rewarding are most welcome. The service that I and my constituents get in Stockport is second to none. One great headache is the take-up of family credit. My hon. Friend the Member for Eastleigh (Sir D. Price) mentioned the tax credit scheme. Will my right hon. Friend consider again the possibility of family credit being paid through the wage packet or at least giving the recipient the option of having it paid in that way?

Mr. Moore

I am not sure, Mr. Speaker, that you would allow me to develop a debate on family credit other than to say that the new campaign for take-up is going incredibly well and that large numbers of people are applying. I am conscious of my hon. Friend's recognition of the work of the Stockport office. I have visited it and I agree with what he said. I hope that he will help to see that more is done, for example, on family credit in North Fylde where excellent work is done by the staff in that headquarters.

Mr. Bob Cryer (Bradford, South)

Can the Minister tell us the total cost of the plans and the consultants who will be employed? One of my constituents who had to grovel for a few pounds from the social fund loan scheme will be interested to know how many millions of pounds will be poured into this. Would it not be a better solution to ensure that more money is spent on refurbishing premises, that more staff are employed at decent rates of pay, and that there is a halt to the Government's attack on the poorest by cuts because of expenditure by his Department on fortifications at every DSS counter? Would not such priorities lead to a better scheme than the lopsided arrangement that he has proposed?

Mr. Moore

. I have to stress that there have been no cuts but a continuing pattern of increased expenditure. Obviously the hon. Gentleman did not listen to the beginning of my statement when I said precisely that my Department is involved in massive expenditure of £48 billion on benefit. I stressed that £2 billion would be spent on administration—not an insignificant amount. Within the overall expenditure pattern the efficient way in which that is spent will be part and parcel of the development of the whole agency structure.

Mr. Barry Field (Isle of Wight)

My right hon. Friend will recall that I wrote to him to congratulate Mr. Griffiths and his excellent team on the way in which they conduct the Department's affairs on the Isle of Wight. Can my right hon. Friend say what comfort there will be in the statement for the taxpayer when the Department of Employment offices are co-located with social security offices, giving rise to the anomaly whereby a claimant has to go to one office to sign on before going to the other—a tremendous duplication of effort and of employees? Does he agree that it is clear from the statement from the Opposition Front Bench that Opposition Members have not visited refurbished offices which, within days of opening, are reduced to the standard of a four-ale, spit and sawdust pub, where claimants use the floor as an ashtray, damage the new furniture and often spend a lot of time insulting the excellent staff?

Mr. Moore

I acknowledge that my hon. Friend has written to me complimenting his local office I also recognise that the taxpayer will benefit, as will staff and claimants. The taxpayer will see a more cost-effective, more efficient and businesslike management of social security operations. That is bound to benefit the taxpayer in the long run. Equally, my hon. Friend was right to remind the House that there has been an extensive programme throughout Great Britain of expenditure on refurbishing social security offices. That has been going on for a considerable period. In many parts of the country that is acknowledged.

Mr. Robin Cook (Livingston)

While the Minister's statement has been proceeding, we have been able to obtain the report that he placed in the Library. I invite him to comment on paragraph 5.5, which states that the agency should enable Ministers to adopt a more explicitly arm's length approach to the day-to-day details of how operations are run. In answering on particular cases, for instance, they could distinguish more clearly between issues which were the delegated responsibility of the Agency and those which were not. If those two sentences do not mean reduced accountability to Parliament and to constituency Members, what do they mean?

Mr. Moore

I fully appreciate that the hon. Gentleman has not had time to consider the point he just made., in referring to a quotation from the agency study report. The hon. Gentleman might have listened to my remark that concerned policy decision-making of the Government consequential upon their own decisions as opposed to the recommendations of the report. Today, I have been talking about the report's recommendations on agency structures. I answered specifically in regard to the Government's accountability and that of Ministers.

Mrs. Margaret Beckett (Derby, South)

That is what you said before.

Mr. Moore

It might be easier for me to complete the sentence more quickly if the hon. Member for Derby, South (Mrs. Beckett), can contain her sedentary interruptions.

The present situation, whereby the majority of right hon. and hon. Members write to local offices will continue post the establishment of the agencies. But they do not have to do so, and will retain post the change the absolute constitutional right to write to Ministers. That may be a less effective way of helping their constituents and in most cases will, as the hon. Member for Livingston (Mr. Cook) says, delay matters. The rights of right hon. and hon. Members will not change in any way, insofar as there will now be agenices having effective executive heads accountable to the PAC.

Right hon. and hon. Members may find it preferable to refer specific administrative problems and queries to the agency in the first instance, if they are seeking effective change. If right hon. and hon. Members have challenges to make on policy or administration methods, they will continue to be matters for Ministers, as they always have been. Right hon. and hon. Members will be in no way constrained from exercising their constitutional rights.