§ 2.52 p.m.
§ Baroness Blackstone rose to move, That the draft regulations laid before the House on 21st October be approved [28th Report from the Joint Committee].
§ The noble Baroness said: My Lords, I beg to move the third Motion standing in my name on the Order Paper. I propose to seek your Lordships' approval for a further set of New Deal regulations. These will allow the pilots we introduced last November to continue. As many noble Lords will know, under the Jobseekers Act, we have the power to introduce pilots by affirmative regulations, but those regulations may last for only a maximum of 12 months. The regulations we are debating today will renew those introduced last November and will come into force on 29th November 1999 and continue for a further 12 months.
§ I would like to explain briefly what we are trying to achieve with these pilots, their content and the progress we are making. The New Deal pilots for people aged 25 and over are an important part of our welfare-to-work strategy. We introduced the pilots in November 1998. They build on the existing national programme for people over 25, and are aimed at people who have been unemployed for 12 to 18 months. They provide a more intensive period of support designed to help people into employment and to improve their employability. We are testing new ways of helping unemployed people aged over 25 into work, in order to inform the future development of our support for this group.
§ When we introduced the pilots last year we made clear that we intended them to run for two years, with the last entrants in May 2000. Our policy intention is unchanged. These regulations simply renew those which were introduced last year to support the pilots and the amending measures which were introduced in April 1999 to allow pilot participants to begin setting themselves up in business while claiming jobseeker's allowance. A number of minor technical changes have been made to reflect the new arrangements for decision-making and appeals and for the introduction of the working family tax credit and the disabled person's tax credit. We have also added a transitional provision to ensure that participants fall within an uninterrupted regulatory framework.
§ Noble Lords may find it helpful if I expand further on the nature and scope of the current pilots.540
§ There are 28 pilots across Great Britain and one covering the whole of Northern Ireland, which between them will help 90,000 people. They are aimed principally at people who have been unemployed for 18 months or more, but in some of the pilots we are testing the impact of offering that help earlier to those at, or beyond, the 12-month point of unemployment. In four areas we are also testing the effectiveness of allowing people at a particular disadvantage in the labour market earlier access to the pilots. The pilots are delivered by a variety of public and private sector organisations.
§ The design of the pilots is intended to allow for the widest possible scope for tailoring help to individual need and local circumstances. Pilot participants initially enter a gateway period of advisory support and other help to find work. Those who do not find work in this gateway period are then required to take part in intensive jobsearch alongside other activity; for example, work experience or job-focused training, for up to 13 weeks. During that time they will receive a grant of up to £200 paid over and above their JSA and other benefits. Those who do not find work by the end of this period are then offered further help in the follow-through period.
§ The renewing regulations I am proposing today support the pilots in a number of ways. They prescribe the categories of people who will be required to participate in the New Deal pilots, and the impact on their benefit of not participating. They ensure that the payments they may receive as part of a pilot, including self-employed earnings, will not affect their benefit.
§ It is still too early to be making any assessment of the impact the pilots are having. The Government have put in place an evaluation strategy which will measure the impact of the pilots on those participating in them compared with people outside the pilots. That comparison will enable us to judge the added value of the pilots but the main outputs from the evaluation will not be available until next year.
§ Our initial statistics indicate that up to the end of August over 54,000 people have entered the pilots and that at least 7,500 have already found work, while the majority is still benefiting from the intensive support that is available.
§ The number moving into work each month continues to grow. Those initial figures are encouraging but, as I said, the true test will be the proper evaluation. I believe that these pilots are crucial in helping us to determine the shape of future support for adult unemployed people. The regulations give us the power to continue with the pilots so that we have sufficient experience upon which to draw. I beg to move.
§ Moved, That the draft regulations laid before the House on 21st October be approved [28th Report from the Joint Committee].—(Baroness Blackstone.)
§ Earl Russell rose to move, as an amendment to the above Motion, at end to insert ("subject to an undertaking from Her Majesty's Government that the pilot study shall include a study of the outcomes for 541 those disentitled to benefit under Regulation 6, such study to include information on the means of support on which such people rely, on the proportion of those who six months later, are (a) employed, (b) unemployed, (c) in hospital and (d) in prison, and how these outcomes compare with those not so disentitled.").
§ The noble Earl said: My Lords, it is always tempting to assume that business which comes before the House on a Friday is ipso facto unimportant. I must admit that I have occasionally given way to that temptation, but one must prove that one can occasionally resist temptation. That is why I have tabled an amendment to this Motion. I hope that it is in order for me to address, first, general questions about the regulations and then turn to the specific amendment.
§ The regulations which we are now renewing were last before us on 13th November 1998. In fact it seems that they will be a regular distraction for the ping-pong season. I asked then a number of questions to which I have not yet received answers. I hope that it is possible for the Minister now to provide answers to some of those questions.
§ First, why is there the introduction of sanctions for the over-25 group? There was no hint whatever in the Labour Party manifesto that any such thing was going to happen. As recently as 9th July 1998, a reply to my honourable friend Mr Keetch from the Secretary of State said that there was no such plan. The design document for the over-25s said that people will not be sanctioned for refusing the offer of a course. I asked a year ago what led to the decision to change that policy and introduce the sanctions. I should rather like an answer.
§ In DfEE News of 4th November 1998 it was stated that these programmes for the over-25s would offer the same high quality standards as for the under25s—despite the fact that an employment option for the under-25s was funded at the rate of £2,000 per person, but for the over-25s only at the rate of £1,300 per person. I conceded last year that it is perfectly possible by the most remarkable exercise in efficiency to match the quality of those two things at the different prices. I wanted to know how that was done. I still want to know. I want to know it rather more than I did previously in the light of a Written Answer given to my honourable friend Mrs Ballard the day before yesterday. It demonstrated an underspend of no less than 90 per cent on this programme; and that £103 million had been returned to the windfall tax reserve. That would seem to be carrying prudence to the point of recklessness.
§ No doubt we shall be told, as Tom Lehrer would have put it, that it turned out there was a reason. I should very much like to know what that reason may be. It calls for some explanation. I asked a year ago whether any training was available beyond 13 weeks. That question is again one to which I should still like an answer. I also wanted to know why the Government brought in sanctions before appeal in spite of all that the noble Baroness and her noble friends said about that before the election.542
§ I now turn to what has happened since the election. I have figures provided by the unemployment unit—I regret to say that I have none from the Government—of the outcomes of those who have left the New Deal for over-25s so far. Some 8 per cent of them have gone to unsubsidised jobs—not a particularly distinguished figure; 6 per cent have gone to other benefits; 2 per cent to other known destinations; and 6 per cent unknown. I hope there is at least some curiosity within the department about what has happened to those who are unknown. To anticipate my amendment for a moment, I should like to know whether there is a correlation between those whose outcome is unknown and those who have received sanctions. That could be rather interesting information.
§ I also want to know what progress has been made with monitoring discrimination—which is in some cases an obstacle to re-entry into the labour market—whether on the grounds of race, gender, age or any other relevant criteria.
§ The purpose of my amendment is to ask the Government to monitor the outcomes of those who are sanctioned, who are disentitled to benefit in whole or in part, and to find out after six months what has happened to these people; whether they are unemployed, employed, in prison, in hospital or other outcome; and, if so, what. It also seeks to find out what means of subsistence are available to them during the period of disentitlement: whether they are being supported by family or friends; or, if not, how; whether there is a correlation between those who are able to turn to the support of a family group and those who are not; and, if there is such a correlation, whether we are penalising those who have suffered a family breakdown for a second time.
§ I want to know how many people who have been disentitled have subsequently had their disentitlement reversed on appeal. When I find that one of the commonest grounds for disentitlement is for refusing a Gateway interview, that makes me believe that we should have known the outcomes of those disentitlements before we considered the gateway clause to the Welfare Reform Bill, which left this House temporarily last week. It would have been very interesting to know what the effects were when we were discussing this matter. Clearly this information was discoverable.
§ There are two possible views of what the effect of disentitlement to benefit may be. The first, one might describe in shorthand as the short, sharp shock view; it brings people to their senses, makes them pull their socks up, and so on. One might argue that that way the effect is salutary. The other, negative, view is that it might tend to lead people into crime, into illness and into disappearing into the underclass. There is a great deal of hypothesis available in this area; it would be nice to have a little bit of fact as well. Obviously both those hypotheses are capable of being true in part. It would be nice to know which parts were the larger.
§ With the pilot scheme in front of us, we have an opportunity to use it, with a manageable sample of people, to collect that information and to use it to 543 inform future policy. One wants to know whether the ways in which people live while sanctioned affect the negative or positive outcome; whether those who have friends to rely on do better than those who have to scrounge. For example, one needs to know whether care leavers are more unfortunate after being disentitled than other people. One needs to know whether there is any correlation between disentitlement and the crime statistics. Noble Lords who were in the Chamber at Question Time yesterday will have noted that the Home Office Minister who was asked that question was entirely unable to provide an answer. We need a certain amount of joined-up government.
§ Also, anyone who reads the Acheson Report must be aware of the link between low income and ill health. One would like to monitor the extent of that link in regard to those who are disentitled to benefit. If the link exists with a benefit income because it is low, one might imagine that it might exist a fortiori with no benefit, which is even lower.
§ The Government set targets as regards suicides. Regrettably, there has been an increase in suicides among males, especially young males. Again, one would like to know whether that coincides with disentitlement to benefit. It might perfectly well not, but it would be nice to find out. It is in the hope that the Government may have a certain amount of laudable curiosity that I beg to move.
§ Moved, as an amendment to the above Motion, at end to insert ("subject to an undertaking from Her Majesty's Government that the pilot study shall include a study of the outcomes for those disentitled to benefit under Regulation 6, such study to include information on the means of support on which such people rely, on the proportion of those who six months later are (a) employed, (b) unemployed, (c) in hospital and (d) in prison, and how these outcomes compare with those not so disentitled.").—(Earl Russell.)
§ 3 p.m.
§ Baroness Seccombe
My Lords, I thank the noble Baroness for her explanation of the statutory instrument. What are the cost implications of the regulations and what consultation has taken place with interested parties; for example, with the Benefits Agency, the Employment Service and the New Deal partnerships'?
Much has been claimed for the New Deal, in our opinion much of it exaggerated. I and my colleagues in another place have serious reservations about the effectiveness of the New Deal scheme. As the noble Baroness will understand, we shall be vigilant in following up those reservations.
I was most interested to listen to the noble Earl's introduction of his amendment. We share his concern about the underspend. The reply referred to by the noble Earl suggested that it is the timing of the submission of invoices by the contractors—namely, for the year 1998–99—that caused some of the underspend. In that case, does the noble Baroness agree that the underspend should be very different now?
544 Also, it is stated that the numbers of people entering the New Deal programmes were lower than had been projected on the basis of the Government's unemployment assumption at that time. I am sure that the noble Baroness will agree that we on these Benches predicted that. Is the noble Baroness able to tell the House how many participants in the New Deal have disappeared from the system without trace`' I look forward to her reply. In the meantime, as is the custom of this House, I shall not vote against the regulations.
§ Baroness Blackstone
My Lords, I am grateful to the noble Earl and the noble Baroness for their response to the regulations. As I have said, their purpose is to enable us to continue to test new and innovative ways of helping unemployed people aged 25 and over back into work, as both the noble Earl and the noble Baroness recognise.
I shall try to deal with the questions that have been put. The noble Earl asked about sanctions. The pilots are designed to offer individually tailored help to people to improve their employability and to help them back into work. It is therefore right to expect people who are unemployed to take advantage of the help that is provided. We want them to have a right to that help; but with that goes the responsibility for taking advantage of it. It cannot be right that people can claim JSA while not taking any steps to improve their employability and their prospects of finding work. People who refuse that offer of work and have no good cause for failing to take part in the pilots will lose their entitlement to JSA for two weeks in the first instance and for four weeks for any subsequent offence. However, they may be eligible for hardship payments. The noble Earl is aware that people in vulnerable groups, including those who have children and those who have health problems, have immediate access to hardship payments.
This is a national programme. The pilots contain rights but also responsibilities. Those in the New Deal who are over 25 are JSA claimants and therefore remain subject to conditions which contain sanctions if they unreasonably cause or perpetuate their unemployment. This is a long-standing feature of benefits for the unemployed. Sanctions are a deterrent to refusal to take up what we believe to be important and helpful support to unemployed people.
§ Earl Russell
My Lords, if we do not monitor the effect of sanctions how do we know that they are an effective deterrent?
§ Baroness Blackstone
My Lords, the noble Earl anticipates my later comments. Perhaps I may turn to monitoring in a moment.
The noble Earl asked why the unit cost of the New Deal for those over 25 was lower than for young people. The options in the New Deal for Young People last at least six months, but the intensive activity periods in the pilots that we are discussing today last for three months. For that reason the costs are lower. 545 Evaluation will tell us whether the model that we are testing in these pilots is effective. That is the simple, straightforward explanation for the difference in cost.
The noble Earl also asked about underspend. Falls in unemployment have led directly to lower expenditure. To date, there has been a lower take-up of the subsidy. That also means lower expenditure. Measures such as the pilots will help us to make a greater number of people more employable and attractive to employers, and therefore they may not want to make use of the subsidies.
The noble Earl's next point was that the pilots did not provide enough education and training. It is important to remember that this is a different pilot client group from that comprising 18 to 24 year-olds. Many of the people in this group will already have skills and a lot of experience of work, but the pilots make provision for training to be delivered to meet individual needs. Training support can be available throughout the pilots. In addition, clients have the opportunity to study for up to one year while remaining on JSA. I hope that that provides the noble Earl with some reassurance.
The noble Earl asked whether these pilots had been successful so far. It is too early to judge their success. To make a sound assessment we need to monitor what happens to people who have benefited from all the help on offer. It is also recommended evaluation practice to allow new programmes to bed in for a while before one attempts to draw conclusions about their impact. As the pilots did not begin until the end of November of last year, the first results of the evaluation will not be published until the end of this year and the beginning of next. I shall ensure that the noble Earl and the noble Baroness have a copy of the outcome of any evaluation as soon as it is available.
The noble Earl asked whether the evaluation would be able to monitor discrimination on such matters as age, gender, race and disability with regard to entry into the labour market. Certainly, that is something I am happy to take back to ensure that it is considered. The noble Earl raises an important point.
The noble Earl also asked about the number of people who have been sanctioned. Just as in the New Deal for young people, the vast majority of people in the pilot schemes responded well to the opportunities on offer. However, regrettably, a small minority did not. Our early statistics suggest that 1 per cent of those who started the pilot schemes in Great Britain have been sanctioned. That amounts to fewer than 400 people.
I turn to the noble Earl's amendment. I accept that he is making an important point and it is vital that we measure the impact of the New Deal on individuals. The published objectives of the New Deal make it clear that a reduction in social exclusion is one of the Government's aims. Therefore, as regards some of the groups to which he explicitly drew our attention, we must take care to ensure that they are not permanently socially excluded.
546 The evaluation strategy which we already have in place for the New Deal, including the pilot schemes, will enable us to explore what happens to those who have been subject to benefit sanctions, through both surveys and one-to-one interviews. I hope that that provides the noble Earl with some reassurance. The evaluation will be able to examine all the comparisons he suggests. If the noble Earl would find it useful, I should be happy to write to him giving further precise details of our evaluation plans.
I hope that my reply has reassured the noble Earl and that he will feel able to withdraw his amendment. I do not believe that it would serve a useful purpose because we are doing exactly what he intends. That laudable curiosity to which he refers is well embedded in the Department for Education and Employment.
The noble Baroness, Lady Seccombe, asked whether we have consulted the various parties to the development of the pilot schemes. I can confirm that that is the case. It would be difficult for us to undertake the work had not the agencies to which she referred been fully engaged in the discussions that took place when we set them up.
The noble Baroness and the noble Earl asked about the cost of the pilot schemes. The budget is £136.5 million for the whole period from November 1998 to the anticipated conclusion next year.
I hope that I have covered all the questions that have been asked. If I have failed in any way, I shall write to the noble Earl and the noble Baroness. I hope that the noble Earl will feel able to withdraw his amendment and that we can agree these regulations.
§ Earl Russell
My Lords, I thank the Minister for a full and generous reply. I am extremely interested in what she says about the evaluation. It seems to go a long way towards meeting what I am asking. She appreciates that the key issue that concerns me is the means of subsistence available to those concerned. Having praised laudable curiosity, I must practise what I preach. I should be most grateful to see the further documents on evaluation, which the Minister so generously offered to send me. In the light of those remarks, I shall of course beg leave to withdraw my amendment.
§ Amendment, by leave, withdrawn.
§ On Question, Motion agreed to.