Good afternoon. If anyone wishes to take their jacket off, they may do so. If there is a Division in the Chamber while we are sitting, the Committee will adjourn for 10 minutes.

Clause 14 : Maternity allowance and carer’s allowance

Amendment 124

This amendment would remove Clause 14(1)(b), which abolishes the carer’s allowance increase for adult dependants. This benefit is fiendishly complicated. The carer’s allowance is called an income maintenance benefit, which can be increased if another adult is financially dependent on the recipient.

The adult dependency increases date back to 1948 when on the whole men were the breadwinners and women were the homemakers, so the increases were mostly paid to men for women. Adult dependency increases—ADIs—are paid at different rates for each benefit. The highest rates are payable with contributory long-term benefits, and the lowest with non-contributory benefits.

It was announced in December 2006 that ADIs in the carer’s allowance would be removed for new claims from 2010, aligning the allowance with ADIs in the state pension and other benefits. The reason given in the impact assessment—the Peers’ information pack is, sadly, completely silent on this clause—is said to be,

“an important step in moving towards a simpler benefits system which is easier to understand and operate, and helps reduce error”.

It is also thought to be outdated as many couples have their own incomes. However, many carers will receive £30.20 a week less in benefit income than they would under the existing rules. At present, around 17,400 carers receive an ADI, and there are an estimated 2,400 new claims each year, including an award of an ADI.

We are assured that income support or pension credit will ensure that most carers do not lose out. However, the impact assessment, under the little heading “Risk of Negative Impact”, says:

“Any negative impact can be mitigated through ensuring adequate information in the run up to the change and promoting awareness of Income Support/Pension Credit. This would be consistent with the Government’s commitment to advice services”.

Are we quite sure that this will be adequate? I should be glad for some reassurances from the Minister. Does he envisage any circumstances in which someone could be worse off when this part of the Bill takes effect? I beg to move.

My Amendment 125, like Amendment 124 in the name of the noble Baroness, Lady Thomas, refers to the removal of adult dependency increases to the state pension from 2010 to 2020. I understand that the rationale behind the Bill getting rid of these increases is not solely about saving money but about adapting payments to reflect changes in family patterns since the payments were introduced in 1948.

Amendment 125 would not reverse the change made by the Bill, but it is designed to probe the transitional period, although the noble Baroness has already posed some of the questions that I might have thought to ask. I accept that the plan is not to make any new payments after April 2010, and that existing awards will not be ended until 2020, which ought to be ample time for existing awards to run their course. From that perspective, it is logical to be able to bring the scheme to a close before 2020 if no existing families are left on it. However, my honourable friend in another place posed two questions to which the Government did not really give any enlightening answer, so I shall re-ask them in this House, and I hope that the Minister will be in a better position to elucidate.

I have said before that it would be a rare bird indeed in social security law if some people did not lose out; the challenge is to mitigate that loss or cushion the blow. To that end, what exactly will the Government do to keep claimants informed of the changes and how they will be affected? Although I acknowledge that monetary savings were not the only consideration, there will none the less be savings of up to £17 million in 2014-15. There exists an opportunity to compensate the poorest households, which will lose out under the proposed changes. Has the Minister given any thought to the good uses to which that money could be put?

I am interested in the amendments because I am not certain what Clause 14 means. Do its provisions, one of which the noble Baroness seeks to remove, mean that after the reform in the Bill, carers and pregnant women with adult dependants will qualify for extra benefits only if they pass a means test? My noble friend will know that a lot of us are not very keen on means-testing; we think it has a negative impact on work incentives anyway. I would be grateful if he would let us know whether that is what the clause means, because I gather that it is not very clear—if it were, we would not have the amendments.

I thank noble Lords for the amendments and the chance to explain the Government’s position. One of the amendments removes the provision to abolish new awards of the adult dependency increase with carer’s allowance from 6 April 2010, and to phase out existing awards by 5 April 2020. The other removes the provision to specify an end-date to awards of adult dependency increases with carer’s allowance.

The noble Baroness, Lady Thomas, and the noble Lord, Lord Skelmersdale, broadly got right the history of adult dependency increases and where the Government are on the subject. I say straight away to my noble friend Lady Turner that the clause does not mean that carers can access only means-tested benefit. As I shall explain, it removes one component of the existing structure of allowances available to carers.

By way of background, it might help if I explained that our intention to introduce the change was announced in the December 2006 Pre-Budget Report. The Committee will be aware that one of the long-standing aims of my department is to simplify and update the benefits system. Reducing complexity means that people claiming benefits can better understand what support is available and so improve the take-up of benefits. Simplifying the benefit rules also helps to ensure that staff administering those benefits make accurate and prompt payments. We have already legislated to phase out adult dependency increases with state pension between 2010 and 2020. Such increases have never been a feature of jobseeker’s allowance, nor are they a feature of the new employment and support allowance, which replaced incapacity benefit for new claims from last October.

I shall address Amendment 124. Removal of the increases from carer’s allowance and maternity allowance is the final measure needed to complete that element of benefit simplification and modernisation. We also think that the benefit system should reflect modern society. The concept of adult dependency is becoming increasingly outdated in a society in which partners generally regard themselves as equals rather than as breadwinner and dependant. Around 3,000 awards of carer’s allowance a year include an adult dependency increase, and 18,000 carer’s allowance awards are in payment, which is about 4 per cent of the total of all awards which include the adult dependency increase. Half the carers who receive the increase are no better off because it reduces the income-related benefit payable to them. The relatively small figures are indicative of the fact that the adult dependency increase is outdated.

It is important to bear in mind, as both the noble Baroness, Lady Thomas, and the noble Lord, Lord Skelmersdale, did, that this change has a 10-year transition period. Although no new awards will be made from April 2010, we will not end existing awards until April 2020 for any customers who continue to meet the conditions of entitlement. The average length of awards is six years and, as a result, entitlement will have ended by 2020 anyway for the vast majority of customers.

Turning specifically to Amendment 125, we are confident that very few people will still be receiving an adult dependency increase in April 2020. However, we will consider how best to notify customers in good time—I say that in response to the noble Lord, Lord Skelmersdale—and we have a period in which to do that. We need to make it clear to them that the increase is being withdrawn and to advise them to claim any alternative benefits to which they may be entitled. Less well-off carers and carer households are likely to be in receipt of income-related benefits and therefore will be fully compensated by increases in those benefits.

The noble Baroness, Lady Thomas, asked if I could give an assurance that no one would be worse off. I cannot give that assurance; one cannot say that, come 2020, there will not be someone in receipt of the adult dependency increase. However, the number of people in that position will be very few, in our estimate, because of the six-year average of the claim. A proportion of those claimants receive income-related benefits and therefore it is a net nil for them. The strategy to ensure that individuals are informed over the 10-year transition period has yet to be worked through but, as I said, we have time enough to do that.

I am grateful to the Minister and to the noble Baroness, Lady Turner, and the noble Lord, Lord Skelmersdale, for joining in the debate, and for the noble Lord’s amendment.

I am always happy to give the Minister a chance to clarify what is in the Bill, and simplified benefits are a very good thing. I shall have to read his reply carefully but, in the mean time, I beg leave to withdraw the amendment.

With this trio of amendments we now come to the subject of the Social Fund. Clause 15 inserts a new section into the Social Security Contributions and Benefits Act 1992, which in turn allows the Secretary of State to make arrangements with external providers to make social loans in place of the present arrangements with the DWP. The Official Opposition welcome the proposals and the interest that the Government express in having advance payments as a way of getting rid of the need for crisis loans to be made in certain circumstances.

My noble friend Lord Skelmersdale and I have tabled these amendments to examine the operation of the new section and to seek assurances from the Minister. He will probably tell me that Amendment 126 is unnecessary because the Government propose not to allow external providers to impose any interest charges on those who receive loans from the Social Fund. They set out that position in another place and I expect the Minister will stick to it here; they do not intend that external providers should charge interest to people who are in need and receive social loans.

However, the Government are proposing to take powers—although they do not have any intention of using them at present—to enable external organisations to make loans in place of the present arrangements in the DWP. We know that if the powers were to be used, the external organisations would be credit unions and similar organisations. I am happy to acknowledge that these are very worthy organisations, which would be well placed to make such loans. However, should that power be exercised and the credit unions and suchlike be called into action, they will be making loans from a somewhat different position from that of the DWP. I am sure that I do not need to remind noble Lords that such organisations face expenses which they normally defray from interest charged. Indeed, credit unions need to exceed their operating expenses. I therefore hope to use my amendment to ask the Minister for a little more clarity and detail on this, given that we now know that the credit unions and other organisations will not be able to charge interest. In other words, I am asking the familiar old questions: “How will this work?” and “How will the sums add up?”.

I thank the noble Lord, Lord Taylor, for this amendment, which gives me an opportunity, I hope, to give him the reassurance that he anticipated I would seek to do when moving the amendment. I appreciate that, by tabling Amendment 126, he is seeking to put beyond doubt the Government’s intention that we would not allow an external provider to charge interest on any social loan made by that external provider. My right honourable and honourable friends in another place have made the Government’s position clear on this matter on a number of occasions and I can add to that assurance that our position remains unchanged. We would not permit interest to be charged.

Our intention is to make arrangements with external providers to make social loans. We will not allow them to charge interest, but we realise that there must be a financial incentive to undertake this work. This is why subsection (4) of the new section provides for the Secretary to State to make payments to lenders in respect of the sums required to make loans and payments in respect of the expenses of the lender, which in different circumstances would be covered by interest charges.

Amendments 129 and 130 are about the provision for the repayment of external provider social loans. Specifically, the part of the Bill which these amendments seek to change is the provision to make regulations for the recovery of these loans. We have already said that we intend to have further discussions about some of the detail of how external provider social loans will work in practice. We also have to consider how what might go into the regulations will sit alongside the detail of the contract between the Secretary of State and an external provider. In particular, we will want to look at the provisions around recovery of external provider social loans, such as the priority given to an external provider loan in relation to other debts. We will also wish to consider in more detail the arrangements for recovery when a borrower moves off benefit into work and what specific recovery arrangements may apply in these circumstances.

While I appreciate that the noble Lord, Lord Taylor, in particular has concerns around the number of regulation-making powers in the Bill—certainly his colleague, the noble Lord, Lord Skelmersdale, has expressed that point of view on a number of occasions—and that these amendments would reduce the number of new sets of regulations, I cannot be sure that we will not need new regulations. I can, however, reassure him that when we have finished considering the details around recovery and decided what regulations should say, we will amend existing regulations rather than introduce new ones, if that proves practical. I hope that that has covered each of the noble Lord’s points, but I would be happy to try to answer further, if it has not.

I thank the Minister for that response. He has confirmed what was said in another place on this point. Of course, loans are loans and there must be an expectation of repayment, although, as the Minister will understand, there probably is a higher risk of failure to repay with this type of loan than may be the case with others. It would totally defeat the purpose of making these loans if the repayment structure became burdensome on a family or an individual.

I am not sure I necessarily accept the proposition that there is a higher risk of default for loans made by this route. One of the key points in going down this route is to seek to ensure that, when individuals avail themselves of these facilities, they are provided with support to manage their financial affairs generally. When they need specific support, they are provided not just with a loan and no advice around that. That is one of the key issues that we want to address in using alternative providers. We hope that it will help increase individuals’ financial knowledge and their ability to handle their financial affairs generally.

I am reassured by what the Minister has just said. It emphasises, though, the need for individual care monitoring to make a success of these welfare reforms. At almost every level at which we have discussed these matters, we know that the relationship between the client and the welfare agencies is the key to success. Given the way the provision is structured, one hopes that it will succeed in doing that. The Minister has said what I expected him to say. I did say that in those circumstances I would beg leave to withdraw the amendment, which is exactly what I now seek to do.

I shall have a lot more to say on the Social Fund when we reach the next group of amendments; this one is by way of a starter.

Those whose only income is derived from contribution-based benefits are at present not eligible to apply for help from the Social Fund. Contribution-based benefits can be claimed by those who have at least some national insurance contributions. Currently, eligibility for community care grant and for budgeting loans is restricted to people receiving pension credit, income support, income-based or means-tested JSA and income-based ESA. Community care grants do not have to be paid back, while budgeting loans are interest-free loans to help people meet one-off expenses. People with sufficient national insurance contributions have to claim the contribution-based element of benefits whether or not they have any other income or savings. Many people who have claimed contribution-based benefits do not have any other income or savings but are clearly disadvantaged compared to those on income-based or means-tested benefits. This is clearly unfair. Many people in this position face financial hardship and have no option other than to approach loan sharks.

I do not usually cite case studies but on this occasion I will. A citizens advice bureau in Surrey advised a client who was in receipt of incapacity benefit. His circumstances were such that, had it not been for his NI record, he would have been entitled to income-based, means-tested benefits, which give access to the Social Fund. The client had moved into an unfurnished flat which had no cooking facilities or carpets and lacked a fridge. He had asked for a grant or loan from the Social Fund but had been told that he was ineligible because he was receiving incapacity benefit. As a result the client was cooking meals on a camping stove, which is dangerous, and buying take-away meals, which are expensive.

The Minister may say that all the Bill does is to make provision to allow the Social Fund to be delivered by external providers. However, we cannot let pass this opportunity to discuss extending access to the Social Fund as a whole, however it is provided, to other low-income groups—in the case of this amendment, to those whose sole income is contribution-based benefits. I beg to move.

The noble Baroness’s amendment at first blush appeared to be surprisingly right-wing for an amendment tabled by the Liberal Democrats. Although I do not say that pejoratively, I accept that it is a probing device to question the eligibility of individuals to apply for and receive a loan from an external provider. The proposed idea that such a person would need to derive their income wholly from benefits is too restrictive.

The point of the Social Fund schemes is to step in as a kind of safety net to provide emergency funds to those who find themselves in a very precarious position—as a lender of last resort, one might say. Plainly, that facility cannot be available to everyone in the country, because it is not, nor should it be, the business of the state to legislate for providers to supply social loans without question. It is for that reason—because people who are in receipt of benefits are already being taken care of by the state, after a fashion, and are therefore owed a particular duty of care by the state—that the Bill allows for categories of persons eligible and the nature of the loan to be prescribed under new Section 140ZA.

The question asked by the noble Baroness, which I echo, is for the Minister to give your Lordships more of a clue as to the kind of person whom the Government consider ought to be eligible for a social loan. What proportion of income should be derived from benefits before a person becomes eligible for a loan? In other words, what benefits will be prescribed under new Section 140ZA(2)(a)?

The point of social loans is to help people out of a precarious situation on a temporary basis, as the term “loan” suggests. The support and advice that they get along with it will be vital, almost regardless of who actually qualifies for a loan, as I said on the previous group of amendments. It is important that people receive financial advice so that they might climb out of the hole that they are in and, I hope, prevent themselves falling back into it. I expect that such advice and support might cost money. If the Government intend to provide that kind of service to the very needy, will it be paid for out of the existing Social Fund budget? If so, will that substantially reduce the amount of money available to Social Fund borrowers and will that in turn have an effect on the stringency of the eligibility criteria?

I gather from the remarks of the noble Baroness, Lady Thomas, that we are likely to have a broader discussion around the Social Fund on the next amendment, so I shall keep my remarks fairly focused at this stage. It is obviously difficult to comment on individual cases, but in the example that she cited a crisis loan would not necessarily be ruled out, because crisis loans are not linked to or precluded from people who are not on income-related benefits. I do not say that it would have been approved in that case, but it might have been.

As we have already discussed, Clause 15 is about external provider social loans and subsection (2) of this new section describes who would be eligible for a social loan from an external provider. It appears that the aim of this amendment is to ensure that eligibility goes beyond those in receipt of income-related benefits. It alters the eligibility criteria for Social Fund loans. The amendment would allow only those whose income was comprised solely of benefit payments to be eligible for external provider social loans. In particular, it would include people whose main source of income was a contributory benefit—as the noble Baroness described—such as contributory-based JSA or retirement pension. I can understand why the noble Baroness would want to ensure that those on contributory benefits would be eligible to receive these loans but there are some effects of the amendment that I would like to explain, and which I feel were unintended.

When I wound up what I was saying on this amendment, I referred back to the fact that the Minister emphasised in his response to the previous group of amendments that there was a high degree of counselling and care involved in making a success of this scheme. Presumably that is at a higher level than at present. I asked a direct question about how this is to be funded. Is it funded out of existing resources? If it is funded out of existing resources, including the Social Fund itself, does that mean that there is less money available to be used for the purposes of the Social Fund itself, which is to provide a bonus?

I apologise for not dealing with that point directly. The reality is that there is a lot of work to be done before we arrive at the detail of how these proposals would operate going forward. Those matters are still under development. We will consult around that.

I caution the suggestion about a high degree of support. We hope that there will be significant support available but, frankly, until we are in discussion with possible providers, mapping out the detail of what that provision will entail and the terms on which it would be provided, we need to be a little cautious about the promises and commitments we are making.

I am grateful to the Minister for that explanation. The noble Lord, Lord Taylor, put his finger on one of the $64,000 questions in this part of the Bill, but we might come to one or two more on the next amendment. This was the original probing amendment, and I fully accept what the Minister said—that there could be some unintended consequences. I shall study what he says and, in the mean time, beg leave to withdraw the amendment.

I will also speak to Clause 16 as a whole. It gives the Secretary of State power to restrict crisis loans or budgeting loans from being provided by the Social Fund if external providers are available. Perhaps I should say a word about the clause at the beginning of my remarks on the group, before speaking to the amendment. The rationale for the clause is to prevent Social Fund claimants double-claiming from both an external provider and Jobcentre Plus. From the Peers’ information pack, I gather that it is also envisaged that external providers would be expected to give their customers financial advice to help them over the longer term, as we have just been talking about. That could be a useful measure, but it must be monitored properly and there must be an independent complaints system in place.

Having the clause in the Bill before anyone has an idea of how a Social Fund scheme from external providers would work is part of the deeply unsatisfactory nature of the Bill, where not just the fine detail but the bigger picture is to be enshrined in unamendable regulations. I gather that there will be two further sets of consultation before any action is taken, which is perhaps just as well because it does not look as though external providers are exactly falling over themselves to lend to this socio-economic group at the moment.

Before leaving the subject of consultation, I should say that I gather from one charity that makes one-off grants to individuals in need, primarily for basic household equipment, that the consultation held last December, before the Bill was published, lasted only three weeks and few people knew about it in time to respond. That charity, which tries to ensure that it does not replace any statutory funds available, last year made 3,000 one-off grants throughout the UK. It is concerned about the operation of the Social Fund, which has a direct impact on its charitable work, and it makes the reasonable point that the further and longer consultations to be held will take place after the Bill has become law. It is particularly concerned about the lack of an independent review, which I will come to in a moment. KPMG, which conducted a feasibility study on behalf of the Department for Work and Pensions last November, found that the break-even point for running such a scheme would be achieved only by charging an APR of 37.7 per cent, although we know that the Government have said in terms that they have changed their minds about the charging of interest and that it will not happen. Perhaps the Minister can enlighten us further about this part of the Bill.

My noble friend Lord Kirkwood will be particularly sorry that we have reached Amendment 128 while he is still away, as he was looking forward to moving it. During the Bill’s passage in the other place, the then Minister, Kitty Ussher, confirmed that the citizen would have no statutory right of review against the decisions made by external providers of the Social Fund. Instead, a complaints process will be incorporated into the contract with the loan provider, which I suppose could mean different complaints procedures for different providers, for all we know at this stage. The amendment allows for the appeals process in respect of an external provider to be specified.

We gather that it is intended that external contractors will be regulated by the FSA. Borrowers could complain to the financial services ombudsman. In the view of the Independent Review Service and others, this is not an equivalent standard of redress for service users, who need an independent, proportionate and, above all, quick dispute process. The people who apply to the Social Fund for help are among the most vulnerable and needy. At present, the Independent Review Service completes more than 99 per cent of standard cases within 12 working days, 95 per cent of complex cases within 23 working days, and 88 per cent of urgent crisis loans within 24 hours. By anyone’s reckoning, these are impressive figures. Compare that with the Financial Services Ombudsman’s service standards, which show that it aims to settle most disputes within six to nine months.

The Bill also makes provision for goods instead of cash to those who were awarded community care grants for white goods or large furniture items. The bulk-buying power of central government should mean that these goods are cheaper and thus better value for the taxpayer, helping the cash-limited grant budget to meet more needs for more people. However, the intention is to exclude these awards from the statutory review process, save for the correction of obvious mistakes. The IRS sees many cases where decisions on grant awards have to be changed because the award for a particular item was not the appropriate one. Inadequate or inappropriate awards in the form of goods may not be reviewable, leaving the citizen without resolution of the difficulty which brought them to the Social Fund for help in the first place.

To sum up, I shall use the words of my correspondence from the charitable trust I mentioned earlier, the RL Glasspool Charity Trust. It says:

“The Independent Review Service of the Social Fund is a great source of expertise, has a clear overview of the operation of the Social Fund nationally and the Commissioner reports to the Secretary of State”.

I urge the Government to accept the amendment. I beg to move.

I have some sympathy with the noble Baroness’s amendment—it would imply the creation of an appeals process for those applicants whose loan applications had been refused—not least because it will tease out the Government’s thinking on this issue. She has started from the premise that there ought to be an appeals process. It is slightly unusual to appeal because it is not about what the applicant has or has not done but is rather an omission to pay him a loan. Should that decision be opened up to question and challenge? Having posed the question, I cannot see any reason why it should not. It would increase openness and transparency, which we are all in favour of. The fact that a decision is open to challenge might act as an incentive to getting it right first time.

As the noble Baroness has pointed out, the Peers’ information pack points to customer-care style complaints procedures and the FSA ombudsman as the likely regulator of the provider. However, if someone is not eligible for a loan or there are sound reasons for refusing one, then the applicant should not be able to bog the provider down in appeal after appeal. It ought to suffice that the reasons are made clear and the explanation for the refusal is made. Then there would need to be a limit on continuing to contest that decision, so openness on the refusal might be one way of making the procedures much clearer.

I imagine that that is made all the more likely by the power allowed under new subsection (3), which allows for regional variations. Although I support the localism agenda and agree that it is right that in different circumstances areas will require different approaches, none the less, if it becomes apparent that one applicant is refused and learns that another applicant in a similar circumstance in a different area has had an application for a loan approved, there might well be feelings of unfairness. “The postcode lottery” is a phrase that often turns up in these matters as a counterbalancing to localism. If it is acceptable that there should be regional variations, it must be acceptable for different providers to apply their own criteria, as long as it can be explained and justified—perhaps through the medium of an appeal. Then perhaps we shall have the smoothing of some very ruffled feathers.

Before my noble friend responds, I wonder whether in his reply he could help us further by giving us some of the relevant stats—he may have done so; I am sorry, but I had to leave the Room briefly to help a colleague. Can he remind us how many loans and grants are given? What is the degree of rotation and therefore possible arrears? What are the grounds for refusal, beyond the instances cited by the noble Lord, Lord Taylor—ineligibility by virtue of non-benefit dependency, for example, or that on any points system or previous pattern the entitlement to loans has already been exceeded?

In other words, can my noble friend tell me how many loans have been refused simply by virtue of financial capping from within the local Jobcentre Plus, as opposed to categories in the Bill or by regulation? That used to be the case; they were cash-limited by local office. If that is the case; given that now, seven years down the line, I understand that almost all the moneys originally lent out are recovered, is there any reason why that cash limitation should continue to apply? That money is recovered fairly quickly, over two to five years, and goes back to the department. As a result, we could avoid some of the real problems of debt, with very high APRs and the grey economy of pawnbrokers and the like. The huge advantage of Social Fund loans is that they are cheap. As a result, taking out a loan does not send you into further debt in the way that almost all other areas of finance do.

Can my noble friend tell us whether the main restriction is on ineligibility grounds—where, as the noble Lord said, there may be paper hearings that simply say, “You are not within the framework of the law or the regulations”—or is it cash-limited, in which case I suggest that my noble friend tells us how much of a problem that is? In the current climate, the Government should be investing in people with cheap credit to avoid the worst problems that come from expensive credit.

This has been an interesting if concentrated debate about issues associated with the Social Fund and the Bill. The noble Baroness, Lady Thomas, referred to the consultation that took place in December last year. It was an informal and fairly short consultation, although we received more than 80 responses, which have helped us to frame our deliberations. As I said in response to an earlier amendment, further consultation will take place this year and we will consider all replies, including views expressed about the amendment.

My noble friend Lady Hollis asked for data on the number of loans from the fund. The discretionary Social Fund is a cash-limited fund. For the year 2007-08, which is the latest for which I have details, the total net expenditure for the community care grant was £138.9 million. The average award was £458. The number of awards was 247,000. To go through the table more logically, the number of applications received was 543,000 and the number of initial decisions was 535,000. There were 247,000 awards, which means that 46 per cent of the initial decisions led to awards. Gross expenditure was £138.9 million. As regards budgeting loans, 1.5 million applications were received and there were 1.2 million awards, which amounts to 75 per cent of the applications received. Gross expenditure was £511,000 and there was £463,000 in recoveries. Therefore, the net expenditure was £47,000.

My noble friend is being extremely helpful and I am very grateful. As regards the 46 per cent success rate for the community care loans and so on, was that primarily or exclusively because it was cash-limited or was it because of some more formal ineligibility? If it was cash-limited, and given the very high recovery rates that my noble friend has just cited, why are we not increasing the cap in these very difficult times?

In terms of why the 54 per cent did not get an award, I refer my noble friend to the annual report from which I was quoting. In any event, I will follow up with further detail of that because it is not specifically identified in this tabulation. I also make clear on the record that 2.1 million applications were received for crisis loans. There were awards of £1.4 million. Gross expenditure was £121 million and recoveries were £66 million. Thus the net expenditure was £54 million. Applications for such loans have now stabilised at around 270,000 a month between January and May 2009, although in February we hit a record level of 305,000. Twice as many people now get crisis loans as two years ago. Over recent years, we have put additional money into the Social Fund.

Will the Minister explain the degree to which the decision-making on the eligibility of loans is a centralised operation, or is it made in the regions? If decision-making is in the regions, are they budget-limited or do they operate to common criteria which are laid down centrally? When the money that they have been allocated is used up, do they have to stop lending money?

It should be clear that the discretionary Social Fund—obviously there is a regulated part of the Social Fund that deals with winter fuel payments—is cash-limited. There is obviously a process by which centrally that budget is allocated to the districts. In terms of the process, crisis loans are made by decision-makers who are embedded in the various contact centres. In 2008-09, there was a decision to significantly increase the number of decision-makers from 800 to 1,500. We have engaged extra decision-makers to meet that requirement. Because of the rise in crisis loan demands, Jobcentre Plus intends to further increase the number of decision-makers to something like 1,800 in total. So we are seeking to ensure that we meet the calls on that budget. The budget is cash-limited. Decisions made in benefit delivery centres involve calls on the national budget which are allocated locally. Part of the approach is to seek to manage that budget using experience and current data about the number of calls on the fund.

When I had the honour of doing the Minister’s job in Northern Ireland, I had the opportunity to move money between various offices in order to mitigate strict office cash-limiting. I have a feeling that this was copied subsequently in the rest of the United Kingdom. Does it still go on?

I believe that the answer to that is yes, it does. I recall a debate we had about 18 months ago on the Social Fund and on how money was managed to make sure that we addressed the various pressures and applications.

A lot of water can flow under a bridge in 18 months.

Indeed. I revert to the amendment. Although I ask that it be withdrawn, I appreciate that it seeks to ensure that any individuals who are refused an external provider social loan have recourse to some form of review.

It is our intention that any external provider of social loans will have a complaints procedure. This would be made clear in our invitation-to-tender documentation and would be one of the key criteria to be met by any successful bidder. Any likely candidate to take on this work would be regulated by the FSA and customers would also have the option of complaining to the Financial Ombudsman Service. However, there would be a complaints procedure as well.

External provider social loans should be very different from the current Social Fund loans. We want to harness the innovation and expertise available outside government to help customers with money guidance and provide access to other financial products such as current accounts and loans.

This amendment would place the additional requirement upon these external providers of building an appeals process for those refused a loan, rather than allowing the provider to apply any existing complaints processes, where it has them, including recourse to the services of the financial ombudsman. Such action could well make any contracts less attractive to providers or could result in higher costs. It could also make these loans much less like mainstream financial services products than lenders typically provide, and which we want customers to be able to move to over time.

We are clear that it is important that any provider has a transparent complaints procedure. Therefore, as mentioned already, this will be a key part of any contract in addition to other important requirements, such as who will be eligible for these loans, how they will be repaid and what type of criteria lenders will apply to determine whether a loan should be granted. Together we believe this will provide adequate protection to customers applying for these external provider loans, without placing unnecessary and costly burdens on providers that would make it difficult for this policy to work effectively. In short, I believe the amendment would restrict the service which we aim to construct.

Finally, we come to the question of whether Clause 16 should stand part of the Bill. Clause 16 enables us to restrict the provision of Social Fund loans in areas where external provider social loans are available, as set out in Clause 15. In geographical areas where we put arrangements in place for the provision of external provider social loans, we need to restrict the availability of loans via the Social Fund so that there is not double provision for the same people. I think that the noble Baroness acknowledged that point.

Clause 16 allows us to make these restrictions to the Social Fund. The intention is not to remove access to loans but to create a new system of loans by external providers. People who might currently apply to Jobcentre Plus for a budgeting loan, for example, would instead apply to the external provider for a loan. We envisage that some people will still be able to apply for a Social Fund loan where, for example, legislation or best practice means that an external provider is not permitted to lend to the applicant—for example, because he or she is under 18.

Will the Minister clarify the point about the external providers? I have two questions. First, who carries the debts—the external provider or the Government? Secondly, what is the position of credit unions? Are they external providers? They have a very good record, I gather. Would it not make sense simply to give them more money as external providers?

The answer to the second point is, “Absolutely”. We would be very keen for credit unions to be engaged in this process. I think it is right to say that their coverage is not necessarily universal, even within a geographical area, but if we can engage them in this—we would obviously have to have discussions with them—that would be a really good outcome, because they are embedded in their communities and this is a question of providing not only finance but support and financial advice.

Bad debts would, in effect, be on the Government’s books. Precisely how those repayment arrangements work out would need to be part of contractual discussions.

I hope that I have dealt with every point that has been made. I will get back to my noble friend Lady Hollis with a better analysis of the stage between applications and their acceptance.

I am very grateful to my noble friend for answering with the statistics that he has to hand. It is especially helpful to have that on the record. Oddly enough, I am less concerned about crisis loans where you are dealing with an emergency. Frankly, you may be dealing with young homeless people, substance abuse and so on, and the recovery rate is not going to be terribly good. One understands that. I am concerned about the budgetary loans, which go to lone parents or couples at stable addresses who do not have the capital to manage bumpy expenditure but for whom the recovery rate is pretty good and pretty secure. I am anxious about the rejection of applications from those people simply because the budget is cash-limited and, after the initial capital allocation, becomes self-financing. Will my noble friend say what plans there are to increase that budget per head?

Before the Minister answers that question, something which the noble Baroness, Lady Hollis, said triggered a question in my mind. Let us say that the external provider is credit union X and is cash-limited, either per month or per year—it does not particularly matter. Surely it would be in a position to offer one of its normal interest-bearing loans once that budget had been reached. Is there anything in the provisions to prevent that?

I do not believe that anything in the provisions would prevent any provider—this is confirmed in a note from the Box, I am pleased to say—seeking to offer loan facilities to an individual. Part of what we are trying to achieve through financial inclusion and education is to help people to move out of the Social Fund environment, and be able to engage with more traditional financial transactions, such as borrowing, having bank accounts, and so on. It is one of the benefits that we hope to get from these arrangements.

Reverting to what my noble friend Lady Hollis said, rather than bore the Committee by reading out a whole raft of statistics, the annual report includes a summary of reasons for initial refusal of budgeting loans to applicant groups. Some of these are to do with not being on the relevant benefit, or not being on a qualifying benefit for 26 weeks. There is another category but I do not know, at a glance, how much detail we have beneath that. I am certainly happy to write to my noble friend about it. I also do not have details of what would happen about repayments and bad debts under the loan scheme. Obviously, for people on benefits, recoveries are routinely made through deduction from those benefits and would therefore be secure. When somebody moves off benefits, that repayment schedule may not be complete. I will see if I can help my noble friend and get some further detail on that.

Could the Minister make the tables that he has been reading from available to noble Lords? I am sure that would help us to absorb the mass of data and perhaps get a better feel for the different balances between the various funds and the rates of success that those applicants would have under different headings. It would make it much easier for us.

Yes, I am very happy to do that. I ought to correct one thing that I said earlier. I said that the latest data that I had were from 2007-08. That is the latest annual report that I have, but I have a briefing note that gives more up-to-date outturn figures for the subsequent year. I am happy to provide those as well.

I thank the Minister for that meticulous correction.

I am grateful to everyone who has spoken in this important debate. We are teasing out more detail as time goes on but I feel as though we are being asked to buy a pig in a poke at the moment. We really do not know any detail. Obviously we cannot write commercial contracts, as I think the Minister in another place said. However, we do not really know how these external providers will work. We do not know anything about the complaints procedure. We do not know what sort of financial advice the external providers will be able to give. Will they know about the benefits system and all the different benefits? That will be terrific training for them. They would have to study it in great detail if it was going to be part of the advice that they give, as I think it should be. Or will they simply toss everything back to the poor old citizens advice bureaux, as usually happens? There are a lot of questions, which will repay study before the next stage of the Bill. I beg leave to withdraw the amendment.

Community care grants, to which Clause 18 relates, are the part of the Social Fund that provides money for emergency items, whereas the Minister told those of us who are anoraks—as his one-time rep, the noble Baroness, Lady Andrews, once described social security cognoscenti—that they can be used for educational purposes. It would be possible, for example, for a grant to be used to pay for a computer for a disabled person. More normally, they would be used for other capital equipment, such as cookers and fridges, which are irreparable and need to be replaced. I have never heard of a grant being sought or granted for repairs, but I assume that this might be appropriate in certain circumstances. Equally, the community care grant can be used for services—in theory, anyway, or perhaps by law. I confess that I have never understood quite what services are in this context and I am sure that the Minister will tell us what services can be applied for. Is it possible under this clause to bulk-purchase services? I confess that I find that a difficult concept.

I see new subsection (2B) of Section 138 of the Social Security Contributions and Benefits Act 1992 as applying principally to capital items. I also see it as a money-saving provision driven by the Treasury. Surprise, surprise—I do not mind that. The Minister will remember that I had occasion last week to comment, “Look after the millions and the billions will look after themselves”. Last year, social care grants cost the taxpayer £138.9 million, so perhaps that phrase is not quite so apt today. None the less, it is a great deal of money, and there is money to be saved by the bulk purchase of, say, fridges, cookers or computers. This is what new subsection (2B) is all about.

These probing amendments are designed to discover how the new system, which I am all for, will work. It would be beyond credibility for bulk-purchased items to be stored in social security offices and it would be wasteful of resources if the applicant could go and choose their replacement cooker, or whatever, from a government-run store. What then is left? I would expect the wholesaler or local shop to have the bulk-purchased item that the grantee would ask for. The question then arises: how physically would the money get to the seller? At the moment, my understanding is that the grant is given cash in hand to the shop by the grantee. However, how does the local jobcentre know that this cash is not being spent on a cheaper item and the difference pocketed? Would this not be an extremely profligate use of taxpayers’ money?

Under new subsection (2B) it appears to my noble friend and I that money still changes hands from the Social Fund to the recipient. The only way for the jobcentre which administers the fund to know the right amount of money to pay out would be to know the bulk-purchase price of every likely replacement item and to pay the appropriate amount. That is not a practical proposition, especially as the bulk purchase would be done on a national or, at best, regional basis.

I am suggesting in Amendment 131 that the cheapest and most cost-effective way for things to happen would be if the grantee were given a voucher for a specific item—a particular sort of cooker such as a Baby Belling, or whatever is appropriate—which has been pre-purchased under the bulk contract, preferably with the manufacturer; although in that case, some recompense to the wholesaler or the local shop would of course be required to cover their costs in the operation. I beg to move.

I thank the noble Lords, Lord Skelmersdale and Lord Taylor, for tabling these amendments which focus on the Bill’s provisions for community care grants.

Before I address the amendments I should outline the thinking behind these provisions. Community care grants are designed to allow the most vulnerable individuals and families to be resettled or remain in the community. They provide valuable support for those who frequently have nowhere else to turn. We feel that the current system whereby, in general, cash is provided to individuals will be enhanced by requiring the provision of goods or services in most cases. It will not only help to secure value for money from the award, but ensure that all items are of an acceptable quality. It will also ensure that the grant is spent on the item it is awarded for. We aim to achieve discounts on the items supplied under contract. The savings that will be created should therefore allow the community care grant budget to help more individuals in need and provide greater value for money to the taxpayer. Not only will we protect the most vulnerable individuals by helping to secure quality items, we will also allow those who have special requirements—for example, through ill-health or a disability—in appropriate cases, to receive items or services which are not part of the standard contract or even cash in some cases.

That is all very helpful. Of course, I am the first to agree that where we are talking about capital items such as white goods or whatever, the individual item should last for a number of years and, in this day and age, use the lowest possible amount of electricity. These sorts of things fit into the idea of quality and I am 100 per cent for that.

I am also, as I said in my opening remarks, satisfied that the intention has always been that the grant should be spent on the item that is applied for, with or without the services. However, the noble Baroness has not answered the following question. Although I accept that vouchers would not be appropriate in every case, would they ever be appropriate? It would be helpful to have the answer to that question before I carry on.

I am delighted to—I hope—answer that question. We are not ruling out the use of a voucher system. Many different delivery systems could be utilised, but this would have to be negotiated and specified in our contract with a supplier. As I have said before, the delivery system must be flexible and user-friendly and should take advantage of the most up-to-date technologies and processes, so nothing is being ruled out.

I am extremely grateful to hear that. I should say, against my own proposal, that there is a downside to all this because the department has a policy of encouraging as many people as possible to operate their own budgets. The moment you give a voucher, that policy is in part destroyed, is it not? However, I am sure that I will not have to take this any further at the next stage of the Bill. I am very glad that the department’s thinking is still open-minded. With that, I beg leave to withdraw the amendment.

I shall also speak to the other three amendments to Clause 20 standing in my name. They translate into two specific issues of note and one amendment which is purely textual.

I would first like to explain the purpose of the clause in order to put these amendments into context. Clause 20 replaces the existing system by which the Secretary of State may make a payment on account of benefit—also called an interim payment—with a more flexible system. Interim payments are an administrative tool that allows a payment to be made when normal benefit cannot be paid, usually because the claiming process is delayed or because the claim has yet to be determined.

The new system will allow the Secretary of State to make a payment earlier than it would normally be paid in cases where there is particular financial need. Also, payments made in advance will be recovered gradually from subsequent payments of benefit rather than set against the very first benefit payment, as now. In other respects the new system will retain many features of the old. A decision, for instance, to make a payment on account will continue to be non-appealable, although decisions regarding recovery will still carry the right of appeal.

The new system is designed to provide quicker and more effective help to those in need when they make their claim. Rather than having to make a separate application to the Social Fund for a crisis loan, the aim is that consideration can be given to making an advance payment within the claiming process itself.

The first issue of note on these amendments is that we wish to remove housing benefit from the scope of the new regime and put it back on its existing footing. This is achieved by Amendments 133 and 134. The current requirements are that a local authority must make a payment on account of a rent allowance if it is impracticable to determine a claim within 14 days, and the delay is not the fault of the claimant. This works perfectly well as it is. In these circumstances, we believe it makes sense for the existing arrangements for housing benefit to continue as they are rather than introduce a new regime where, in the unique circumstances of this particular benefit, there is no real need. I will say something about Amendment 133A later, once the noble Lord, Lord Skelmersdale, has had the opportunity to speak to it.

The second issue of note with the amendments in my name is that we want to remove a power that we believe is no longer required. It was originally thought that we would want to prescribe circumstances where a payment on account would not be brought into account against subsequent payments of benefit. On further reflection, we cannot envisage any such circumstance, so Amendment 135 removes the power in new Section 5(1B)(b) which would have been inserted into the Social Security Administration Act 1992.

By the very nature of what it is, a payment made on account of a benefit stands to be brought into account against a payment of benefit whenever it is made. That is not to say, however, that the Secretary of State will necessarily pursue recovery of every last penny of an interim payment if the person never becomes entitled to benefit, or comes off it before recovery can be completed. Even if the Secretary of State opts not to pursue recovery, that does not mean that the sums paid should cease to be repayable.

The final amendment, Amendment 136, is a technical change to avoid reference to an outdated side-heading in the Social Security Administration Act 1992 about—would you believe it?—community charge benefit. At this juncture, I give way to the noble Lord, Lord Skelmersdale, to hear what he has to say about his amendment.

Amendment 133A (to Amendment 133)

I do not doubt that the Minister is right to say that the power should be there to make regulations concerning claims for housing benefit. However, I was rather surprised by his statement that the clause puts housing benefit back to what it is without the activities listed in the Bill. How has it come about that in a very few weeks, the Government appear to have changed their mind on the housing benefit regulations?

It is unrealistic to expect claims to be immediately determined and paid without hesitation. For a variety of reasons, as the Minister set out, delays may occur, and there ought to be a mechanism to resolve difficulties in making those payments. However, when I read the government amendment, I could not make any sense of the first paragraph of proposed new subsection (1ZA). It appears to describe an impossibility and is therefore quite pointless. Proposed new paragraph (a) allows for regulations to be made to cover cases,

“where no claim has been made and it is impracticable for one to be made immediately”.

I am confused. If there is no claim, how can anyone say if it can be made, let alone whether it can be made immediately? I have therefore proposed Amendment 133A, which amends government Amendment 133. It effectively rewrites proposed new paragraph (a) to state that, “where it is impracticable for a claim to be made immediately”, regulations to cover payment on account of housing benefit shall be used.

I expect that the Minister has had crack teams of civil servants and draftsmen working through the night to explain why the government amendment makes perfect sense and mine makes none at all. As this is a drafting point, I will listen with interest and I am sure that all will become clear, even if, as one Private Secretary in the department—alas, she has now left the room—said to me some years ago, it has the draftsmen spitting blood. I beg to move.

I wish to raise a matter in connection with the government amendments which I have mentioned before to the Committee: that is, the payment of benefits to those who are in prison. Under the current system, people receive a leaving grant when they leave prison of £46, which can be doubled if they have no fixed abode. Then, having come out of prison, they have to start the process of applying for benefits, which can sometimes take up to three weeks. You try to live on £46 for three weeks.

When I was Chief Inspector of Prisons—indeed I have mentioned it subsequently—it seemed much more sensible that the benefits arrangements should be prepared before people left prison so that they did not get a leaving grant but received, in effect, the first benefit. This would be paid not necessarily from the jobcentres to which they would subsequently go but by the prison acting in loco jobcentre, if you like, because frequently they are held somewhere away from the area where they live. If that happened, you would save a tremendous amount of subsequent problems because the next week they would go and collect the next benefit. This would also introduce people to the whole jobcentre system. It is crucial that they have help in preparing the documentation, rather than suddenly being sent to what is frequently a foreign environment for them.

I therefore read these amendments with considerable optimism because it seemed to me that, in preparing Clause 20 and the amendments to it, the department had come up with a possible solution. I wondered whether in the preparation of the Bill the department had had consultations with the Ministry of Justice to see whether this was a practical way out of a problem which faces every governor of every prison, quite apart from the probation officers and others who have to pick up the avoidable wreckage caused very often by people coming out with no visible means of support.

I shall deal first with the amendment to the amendment. On the question the noble Lord, Lord Skelmersdale, poses—why the changes to housing benefit now, and have we changed our mind—the answer is no, we have not. It was simply an oversight and the Bill was not drafted as we wanted.

They are clocking up. This is the second one so far in the Bill. How many more?

If there are any more, doubtless we will uncover them as we go through the extensive amendments that we have debated and will continue to debate.

The noble Lord, Lord Ramsbotham, spoke to a point which he raised earlier in Committee, and we are looking into the issue with the Ministry of Justice. The flexibility that Clause 20 provides could help. There is a process of liaising with the Prison Service about people who are due to leave prison to get them into the Jobcentre Plus system, but I am not sure that that is the complete answer to the real issue raised by the noble Lord.

I welcome my noble friend’s remarks. Could he press this issue, which has been raised on several occasions in the past? The obstacle then was not the DWP but that it was a Home Office responsibility. It was the Home Office which, for whatever reason, was reluctant to engage in the necessary preparatory work, either to release people out or to bring people in, to set this in place. The noble Lord, Lord Ramsbotham, is right: unless someone has a secure housing address that they can afford to go to, you will get a revolving door. But, from my memory, the problem did not lie with the DWP but elsewhere. If my noble friend can restart the discussions, I am sure that would be really welcome.

I endorse what the noble Baroness has just said. Since then, thanks to the Department for Work and Pensions, jobcentre representation is now in the prisons, or some of them. Therefore the tools are there, which they were not in the old days.

The comment of the noble Lord, Lord Ramsbotham, partly solves my problem. I was going to say simply that it seems perfectly idiotic—if the objective of prison is, in part at least, rehabilitation—that the inmates, when they are about to come out, should not be properly prepared to live in society as it is at that time.

I am grateful for the comments of my noble friend Lady Hollis. We will certainly pursue that point with the Ministry of Justice. It is a very real one. I am pleased to hear that the liaison between Jobcentre Plus and the Prison Service is working. We need to ensure that it smoothes the access to benefits to which people are entitled.

As the noble Lord, Lord Skelmersdale, explained, Amendment 133A seeks to alter the formulation of the Government’s Amendment 133 to Clause 20, which deals with payments on account of benefit but in no way changes the effect of a provision that has been on the statute book for a very long time. The provision in question relates specifically to making a payment on account of housing benefit when no claim has yet been made, and the relevant wording in our amendment is identical to the equivalent existing provision in the Social Security Administration Act 1992, which itself derived from the Social Security Act 1986, for which the noble Lord, Lord Skelmersdale, may have had some responsibility. This provision makes it possible to allow for such payments in circumstances in which there has been serious disruption to housing benefit services as the result, for example, of a catastrophic loss of computer services or an influenza epidemic that affected the number of staff available.

The power also makes it possible to provide for payments on account in cases of individual emergency where the customer is unable to claim. However, the Government foresee no need for regulations to permit a payment on account for such individual cases if housing benefit services have not been disrupted by a more general emergency. To date, this power has not been exercised, so the housing benefit regulations currently do not permit payments on account if no claim has been made. Although there are no plans to use this power in the future, it needs to be retained to permit the Government to address the sort of large-scale emergency that I have described and which drastically affects the ability of local authorities to process housing benefit applications.

The amendment tabled by the noble Lord seeks not to change the effect of this power in any way but merely to alter the language that is used to express it. The formulation in Amendment 133 has, as I have said, existed in social security legislation for a long time. It is clearly expressed and requires no change. On that basis, I ask that the noble Lord withdraw the amendment.

I am grateful to the Minister. I rather suspected that this was a reformulation, or indeed a copy of previous legislation, but I had not appreciated that it went back to 1986. I have a feeling that since I joined the department only in June or July 1986, that particular Act of Parliament may not have been my responsibility, but I am sure there are others behind the Minister who will be able to confirm or confute that piece of information.

As I expected, blood has been spat by the draftsmen, and possibly by several others, and as a result I beg leave to withdraw the amendment.

Amendments 138 and 139 concern loss of benefits in the case of conviction for a benefit offence. I understand, and indeed agree with, the principle that benefits payments cannot be unconditional. There cannot be so much money in the public pot that they can be paid out in any circumstance, and part of the contract between the citizen and the state must be that if the state is supporting an individual, it is entirely reasonable to expect that individual to comply with the law of the land. Such an obligation extends to everyone, of course, but the punishment in the case of a non-claimant is the criminal conviction and sanction that they receive. Because there is an added relationship between the state and the recipient of benefits—that is the money they receive as welfare payments—it is therefore logical and reasonable to consider these payments when an offence related to benefits is committed.

This pair of amendments, therefore, looks at the relationship between a benefits offence and a benefits sanction, although in practice they are really drafting amendments. The first, Amendment 138, inserts a caveat into new subsection (6) on page 25 which makes clear that this sanction applies only until the abolition of income support under Clause 7. I expect that the Minister will argue that the addition of these words is unnecessary to the operation of the Bill, as he did on my previous amendment. I am even prepared to concede that he will probably be correct, but I wish to make the point that sanctions will migrate, just as the recipients do, from one type of benefit to another as the whole system is rationalised. That must be made clear to people if we are to have a sanction that includes loss of benefit. There must be no ambiguity about what that sanction may entail. I worry that some of the deterrent qualities of such sanctions may be muddied if people do not realise exactly what they stand to lose if they commit an offence.

The second amendment deals with the definition of an offence. On page 26 we are told that a post-commencement offence,

“means any criminal offence committed after the commencement of this section”.

To me that is only half clear. I understand the post-commencement aspect, but the rest is rather baffling. If we track down through new subsection (13) on page 26, we are told, first, that “benefit offence” means (a), (b), (c) or (d), all of which are post-commencement offences relating to any benefit offence. That seems fair; but does the Bill really mean what it says, whereby a post-commencement offence is “any criminal offence”? Does that include murder, hunting with hounds, driving under the influence, smashing windows and any other criminal offence? Does the Bill really mean to open up the definition of benefits offences as any and all criminal offences? The last line of new subsection (13) appears to widen enormously the remit of the benefit sanctions regime. Is that intentional and is that correct? I beg to move.

I understand that Amendment 137 has been withdrawn, so I shall deal only with Amendments 138 and 139.

Amendment 138 would include a specific reference to the abolition of income support in applying benefit fraud sanctions. Although I think I understand why the noble Lord has tabled this amendment, I hope that I can reassure him, as he anticipated, that it is unnecessary. We intend that loss of benefit provision resulting from benefit fraud will continue to be applied to income support cases only until such time that no one remains in receipt of this benefit. For this reason, Schedule 7 covers the required repeals and revocations resulting from the abolition of income support. This updates the Social Security Fraud Act 2001 sections where necessary and addresses the issue that the noble Lord raised. It is clear that a benefit fraud sanction cannot be applied to a non-existent benefit and therefore the amendment is not required.

Amendment 139 would change the definition of a post-commencement offence. However, the change suggested by the noble Lord could cause confusion, as a benefit offence has already been defined as any post-commencement offence in new Section 6B(13) of the Bill. The use of the word “criminal” is intended to make it clear that the behaviour constituting the benefit offence is fraud, which is a criminal offence. It is benefit offences which are covered by this definition; they are offences which are criminal offences—that is to say, fraudulent.

The fraud sanction that leads to a one-off strike being imposed may be an administrative penalty or caution rather than a conviction in court, but before an alternative sanction can be offered there must be sufficient evidence that the criminal offence of benefit fraud has been committed to consider a prosecution.

I hope that that covers the noble Lord’s point and that he will feel able to withdraw the amendment.

I certainly understand the Minister’s rationale for saying that Amendment 138 is unnecessary, but I am afraid that such understanding does not extend to Amendment 139. After all, criminal means criminal and has a very wide meaning. Although the Minister says that the word “criminal”, in its normal usage, is constricted by the Bill, I am not entirely sure that he is correct and I shall have to study the Bill very carefully to ascertain whether he is right. I am not prepared to spend time doing so at the moment so, for now, I beg leave to withdraw the amendment.

I did not table an amendment to this clause, which, as we know, is about benefit sanctions for offenders, because I was not entirely sure that there was a real problem. However, I am now convinced that there is enough hard evidence from citizens advice bureaux around the country to highlight that there is indeed a problem. The CABs report that clients who were being called to an interview under caution for investigation of possible benefit fraud were often uncertain about what they were being accused of. In some cases, the call to interview is the first that they have heard of the allegation, and it is not adequately explained to them why they are being investigated. Some do not realise that they are entitled to be accompanied to the interview. A person whose benefit is being stopped due to investigation may be entitled to hardship payments, but many are left vulnerable to falling into rent arrears and losing their homes. A lack of flexibility in the system means that people who have made a genuine error—sometimes due to major upheavals in their lives, such as the death of a partner or because of complex reporting requirements related to some benefits—are none the less prosecuted.

A common theme running through the CAB evidence is that the reasons for a so-called fraudulent claim are complex and often result from a mistake by either Jobcentre Plus or HMRC. The following is a good example. Three years ago, a woman was receiving income support and child tax credit. She visited Jobcentre Plus to ask how many hours she could work without her benefit being affected. She was told that she could work for up to 16 hours a week, but that turned out to be quite misleading. If she worked for up to 16 hours a week, she would still be entitled to income support, but any earnings above £20 a week would have to be declared and deducted from her income support. This poor woman started work only to find that both her income support and child tax credit were stopped. The following April she received a letter saying that she was no longer entitled to income support due to a change in circumstances, but she was also invited to renew her claim, which she did, including a statement of her earnings for work. She genuinely believed that she was entitled to the benefits but then faced a fraud investigation due to poor advice from Jobcentre Plus.

The complications in the system are such that great care should surely be taken to ensure that genuine claimants who are simply baffled by the complexities of the system are not accused of fraud and do not have their benefits cut. One has only to go to the Directgov website to try to find out about, say, child tax credit, to see the complexities set out. First, one is directed to the HMRC website. Then there are three pages of directions about how an award is worked out. Many people are coming into the benefit system all the time who will be unfamiliar with it, let alone those whose knowledge of English is extremely limited.

We all want genuine benefit cheats caught and prosecuted, but we do not want our enthusiasm to catch fraudsters to include in the net those who make genuine mistakes and find that they are sanctioned quite inappropriately. I will be interested to hear the Minister's comments.

Currently, benefit fraud remains at the lowest level ever recorded, our latest estimates showing that by September 2008 we had reduced fraud across all benefits to 0.6 per cent of benefit spend—half a penny of every £1 of benefit expenditure. That is good news, but we must not be complacent; we recognise that there is still fraud in the system.

I acknowledge that, as the noble Baroness said, the system is complex. Part of what we seek to address in the Bill is to move towards a simpler system, but there will always be a degree of complexity in a system that tries to cater for a whole range of needs. That is the environment in which we live. Convictions are judged by the courts, not by the DWP, although I accept that that is not the case when we are dealing with cautions or administrative penalties.

On the point made about not many people knowing what they are suspected of and not knowing that they can be accompanied, a letter issued calling an individual in for an interview under caution states that they can be accompanied. The letter may be the first that they know about the fraud investigation—sometimes for obvious reasons. The decision whether to offer an administrative penalty or caution is made by a fraud manager. I stress that that is only an offer; they do not have to accept. They can contest the case, in which case the court will decide. Notwithstanding that, we always need to ensure that the system recognises that there are vulnerable people and people whose understanding of issues is sometimes challenged, and that our systems are fair to those people. We seek to do that.

Clause 21 introduces a change to the benefit fraud sanctions regime. It amends the Social Security Fraud Act 2001 and allows for benefit to be withdrawn or reduced for those customers who commit benefit fraud for the first time. Our existing, successful two-strikes benefit fraud sanction, introduced in 2001, allows that customers convicted of benefit fraud twice within a period of five years are disqualified from benefit for a set period. We believe that it is now time to build on the success of the two-strikes initiative by extending the penalties that fraudsters face to deter more people from committing benefit fraud. The clause will do that through the introduction of a loss-of-benefit sanction for first-time benefit offences.

As a result, all fraudulent customers who have committed benefit fraud, whether as a first or subsequent offence, will now face the loss or reduction of their benefit for a set period. That is in addition to any administrative penalty, caution or court conviction and requirement to repay the overpayment. Given that, we believe that the clause, combined with our existing two-strikes provisions, creates a stringent and effective benefit fraud sanction regime.

Is any mediation allowed where someone is not a benefit fraudster but is honest about all of his or her circumstances, only to find that they have fallen foul of the rules, perhaps because of a misunderstanding earlier in the process or the wrong advice by a Jobcentre Plus adviser? Is there any give when that has happened, or will someone always be penalised if it looks like fraud?

I am appalled by what I hear. Many of the people who are in this situation have been on benefits or are dyslexic. Some cannot read and write, many cannot speak English, and many—like me—simply do not understand a lot of the details of these arrangements. The Minister talks of advisers in the jobcentre. If they are advisers, they ought to advise, not penalise. They ought to help the person to understand what the problems are and, if that person has made a mistake, they ought to accept an apology and put things right. Of course there are real fraudsters. I remember asking a question in Parliament when there was £2 billion of housing fraud, but that was mainly as a result of landlords applying for housing benefit on houses that did not exist. I am sure that a lot of people who are on benefits do not understand the incredible complexity, and they really do deserve help.

Surely the problem that must be surmounted is whether fraud occurs at the application stage or when the application is granted as a result of the applicant misunderstanding the application criteria. If the money has actually flowed, I can understand that it is fraud, pure and simple. If it has not yet flowed, I find it a lot more difficult to understand that it is fraud.

I do not think that the Committee disagrees about the need to ensure that vulnerable people do not unwittingly find themselves pursued for fraud or anything else. I think we have common agreement on that.

The noble Baroness, Lady Thomas, made the point that customer error would typically be dealt with elsewhere in the jobcentre and would not come into the section that looks at the possibility of fraud. Clearly there has to be sufficient evidence to prosecute. Where someone had misunderstood the rules, particularly if they had been advised by Jobcentre Plus that what they were doing was in order, it would be quite difficult to see fraud being considered in those circumstances.

The problem occurs before this reaches prosecution when people are asked to accept the administrative penalty, which means having their benefits docked. They certainly do not want to go to court, but they might do that even when they do not know what they are supposed to have done wrong. The citizens advice bureaux have so many cases, it is very worrying.

On the point that people are encouraged to sign up to an administrative penalty rather than test their case in the courts, if the noble Baroness will let me have some specifics I will be happy to look at individual cases and see whether any general conclusions run from them. That is reasonable.

I am slightly puzzled that the noble Baroness, Lady Thomas—although I really sympathise with her on this—believes that fraud comes out of vulnerability and misunderstanding. I am sure that the three big areas of fraud are: first, that you are claiming the JSA and earning on the side; secondly, that you are a lone parent with a live-in boyfriend and therefore not really a lone parent; and, thirdly, where landlords and tenants collude in trying to maximise housing benefit. In almost none of those circumstances could you say that there was anything other than the intent to deceive. On the question of fraud arising from misunderstanding the paperwork, in my experience departments, civil servants and advisers bend over backwards to give people the benefit of the doubt. One knows and can recognise what conventional up-front fraud actually looks like.

I, too, would have thought that was the case. The Child Poverty Action Group and the citizens advice bureaux are very keen that the question should be raised in the Grand Committee. There is obviously a problem. I thought that fraud would look like fraud, but that is obviously not quite the case.

I thank my noble friend for that helpful intervention. On the issue of administrative penalties, an individual would have 28 days to change their mind and withdraw acceptance of an administrative penalty if, on reflection, they thought it was inappropriate.

The noble Lord, Lord Skelmersdale, asked whether fraud arises only when payments have been made. The answer is that there generally needs to be an overpayment. The only instance where we prosecute without an overpayment is in relation to identity fraud.

I hope that I have been able to convince the Committee why these provisions are appropriate. I also acknowledge that if evidence is provided to us that the system is not working, we will be very happy to look at it.

This might be an appropriate moment for a short break. Since a number of Members of the Committee have a disability, I think 10 minutes is a little strict for our break, so I suggest 15.

The Committee stands adjourned for 15 minutes.

We have all agreed that this is a framework Bill, but it occurs to me now that that is speaking rather loosely. To a great extent, it is a framework set above a series of experiments which are in themselves a sort of framework. This supra-framework, for the want of a better expression, allows pilots to be conducted to see if particular threads in the Bill will work in practice. It is they which will finalise the schemes to be rolled out nationwide in due course. The final schemes could be very different from the original pilots. We just do not know, any of us, whether one pilot in respect of any particular thread of the Bill will be enough or whether a second or even a third, fourth or fifth will be necessary.

It goes without saying that the longer a pilot scheme is to continue, the more delayed the final countrywide rollout will be. No one can deny that. It is particularly relevant to the next group of amendments, to which I shall speak in due course.

This amendment concerns state pension credit. Clause 23 allows pilots to be run to establish whether the particular scheme in that pilot will increase the uptake of state pension credit. The objective of state pension credit is to bring the income of pensioners with little or no extra income beyond the state pension of £95.25 for a single person per week, an extra £57.05 for a dependent adult up to a minimum income of £130 for a single person and £198.45 for a couple. It could perhaps be described as a minimum wage for pensioners. The catch-all way of achieving this objective would be to raise the basic state pension to the level of this minimum wage. No Government could possibly contemplate that because of the expense, so this Government invented pension credit. The problem is that by no means all the people who are entitled to it claim it. I understand that the Treasury never thought that it would be fully utilised and I am sure that the Minister will tell us the number of people who should be claiming it and are not.

Not surprisingly, the Official Opposition, particularly in another place, have waxed lyrical about this failing of the Government. This is the whole narrative for the clause, which has the effect of introducing a pilot scheme enabling HMRC to pay pension credit with no claim being made. The Government are 100 per cent correct to pilot this scheme, so that we can all see what effect, if any, it has not on the take-up, which will inevitably rise, but on the living standards of pensioners.

My suggestion—I would not put it any higher than that—is that 12 months for such a scheme is not long enough to have a proper evaluation and then roll out this no-claim proposal to become the norm across the country. Given, in particular, that two-year pilots are now considered to be the right length of time for most pilots, why have the Government chosen the minimum possible time of only one year for this one? I beg to move.

Perhaps I may start by reiterating what the Government have done on pension credit. When we came to office in 1997, because of the decoupling of the basic state pension from the earnings link, a huge raft of pensioners were in real poverty. Pension credit was an early act of this Government to seek to make sure that resources were channelled at the poorest. Indeed, that has helped significantly in taking hundreds of thousands of pensioners out of poverty. But the take-up is still not as high as we would wish. We believe that between 61 per cent and 70 per cent of pensioners who are entitled receive pension credit, although the take-up of the guaranteed credit, which is paid to the poorest pensioners, is between 72 per cent and 81 per cent.

Notwithstanding the provisions in the clause, which I shall come to in a moment in responding to the amendment, we are committed to ensuring that pensioners receive the support to which they are entitled. That is why we have simplified the claims process; you can now get housing benefit, council tax benefit and pension credit via one phone call and multiple claims are not necessary. A new take-up campaign was launched in early 2009 and will be rolled out across 20 regions where there are a high number of eligible non-recipients of pension credit. During May of this year, the DWP wrote to 230 pension credit recipients to encourage them to contact their local council to check whether they are entitled to council tax benefit and housing benefit. So we are looking to improve the take-up of these benefits on a joined-up basis.

In addition, we are conducting around 13,000 home visits a week to vulnerable customers to ensure that they are receiving all benefits and services to which they are entitled. We currently have joint working partnerships, live or at the implementation stage, with all 203 primary-tier local authorities in England, Scotland and Wales. These partnerships enable the Pensions, Disability and Carers Service, local authorities and the voluntary sector to provide a single point of access to social care and benefit entitlement.

Pension credit has been highly successful since its introduction in 2003. The number of pensioners with relatively low income has reduced by around 500,000 but it is becoming increasingly difficult, notwithstanding the action that we have taken, to reach those people we believe may be entitled to pension credit but who, for a variety of reasons, are not claiming it. As part of the Government’s ongoing commitment to help people to get the support to which they are entitled, we are looking for new ways of encouraging such people to take up what help is rightfully theirs. The powers in Clause 23 will help us to do this by paving the way to exploring the potential for making better use of the information that government already hold to ensure that we maximise the number of older people who get the help to which they are entitled.

I understand that there is considerable and understandable interest in how the piloted powers in Clause 23 will be used. However, I hope noble Lords will indulge me with a little patience as the structure and design of the pilot has not yet been finalised. However, we are keen to ensure that the pilot is designed in such a way as to provide a robust body of evidence about the prospects for making better use of the information available to us in order to improve take-up of pension credit. The pilot will also provide evidence for an informed debate on whether we should seek new or better data sources, or simplify the benefit rules so that the claims process can be streamlined in the longer term.

In designing the pilot, it will clearly be important both that we work closely with our external stakeholders and that we subject the design to close analytical scrutiny to ensure that the pilot design and evaluation methodology are appropriate and robust. Until we have gone through that exacting process, I hope that noble Lords will understand that I cannot be too forthcoming in the detail of the design of the pilot scheme. That said, we plan to have the necessary regulations in place detailing how the pilot will operate by the end of this year, with a view to running the pilot no earlier than April 2010. While on the subject of regulations, I should say that they will be made using the affirmative procedures, so that both noble Lords and Members of the other place have the opportunity to debate them.

With regard to the duration of the pilot, which was the focus of the noble Lord’s amendments, it may well be that it runs for only a relatively limited period of, say, three months, and so the 12-month period will allow us adequate time to do what we need to do. We are currently working on the detailed design of the pilot programme in conjunction with colleagues in government and the voluntary sector. In designing the pilot, we are looking at how best to evaluate the logistics of running an automatic payment system, the quality of administrative data used to make such awards and participants’ reactions to receiving an automatic payment. It is also right that we are carrying out qualitative research both with people who have gone on to claim pension credit at the end of the trial period and with those who do not in order to find out about experiences of and attitudes towards the automatic payment itself and the reasons for subsequently claiming or not claiming. As I said, we anticipate having the necessary legislative framework in place by the end of this year.

I commend my noble friend on this. It will be wonderful if it works. It will square the circle of trying to have targeted help while avoiding some of the problems of stigma that are associated with take-up. That would be splendid. My noble friend may have to wait until the scheme has been further designed, but how is he going to manage the income derived from capital rules on this? There is some research on why people do not claim pension credit. The biggest single reason is that because we have made it more generous—and rightly so—people towards the end get so little for the last £5 or so, that they decide that it is not worth the bother. There are also problems to do with the fact that people have applied for a different benefit in the past and therefore think that, as a result, they will lose this one. It might also be because they live with family members and think that they are not entitled when they are.

We know quite a lot of the reasons for this but it seems that one of the practical problems about investigating people’s eligibility is that we know their income—which ought to be fine—but we do not always know about their capital and the putative income that is derived from it. I know that it has now gone up to £10,000, which is great, and I know that, as a result, we have removed some 70 per cent of pensioners from coming within the effect of that rule. Does my noble friend yet have enough information to be able to tell us how he will overcome that hurdle? I can see how the rest of it could work in a pilot, including the five-year rules and so on, but I do not yet see how you can get around this problem. Can my noble friend tell us? It may just be too early—I would obviously respect that—but it would be helpful to know what sort of shape it might take and how we could address the problems that have bedevilled automaticity in the past.

My noble friend is right in a sense; it is too early to address that in detail. The group that we are particularly hoping to engage with this are those who may have somewhat small entitlements to pension credit and those on savings credit who perhaps do not understand that they are eligible to claim. They may not have worked out that their income and capital still permits them to make a claim.

Obviously, there is a database, which I am sure is familiar to my noble friend, that has details of people’s income on it. It certainly holds some data about people’s capital holdings, such as bank accounts, ISAs, PEPs and TESSAs, but it does not necessarily have the totality of information on capital that we would need to be absolutely certain. That is one of the challenges that we face. We are helped by the change in the capital disregard that was put in place recently, and by the general data on the level of savings in aggregate that people have. I have forgotten the statistics, but something like 40 per cent of the population have savings income of less than £1. Although the average is higher, it is highly skewed at the top end. The points raised by my noble friend are very relevant. There are some challenges in moving forward on this, but there is an opportunity here that we must grasp.

I am grateful to the Minister and to the noble Baroness, Lady Hollis, for her interest in this matter. In my belated speech—or, rather, my backdated speech would perhaps be a better way of explaining it—which the Minister very generously allowed me to make, I made the point that it is absolutely right for a Government, having set themselves on a particular course in policy terms, to ensure that those policy terms are met as far as possible. I readily understand why pilots are necessary; I did not in any sense seek to demean them. I take the Minister’s point that pilots in this case are dealing with information already held, presumably by HMRC, which knows the income position of individuals. It is inevitable, I suppose, that pensioners who are sailing close to the limit—in other words, who would attract only an extra 25 or 30 pence a week—would not bother to claim. However, that is no reason not to allow them to claim. After all, the over-80 allowance of 25 pence has been on the statute book for goodness knows how long and no Government have proposed removing it.

One thing that the Minister said in this connection that rather surprised me was that the Government are now committed to the fact that pensioners should receive the support to which they are entitled. The words “now committed” seem very odd and I shall have to study the Minister’s exact words.

With great respect, I do not think that I can let the noble Lord get away with that. The history of this Government shows that we have supported pensioners through a whole raft of policy initiatives and resources. We have supported and sought to help pensioners throughout the time of this Government. A figure springs to mind: if we had simply rolled forward the policies of the previous Government, pensioners in aggregate would be something like £30 billion a year worse off. We have a strong record in that regard but there is more to do. We need to work to ensure that there is full take-up of the facilities and arrangements that exist to support pensioners.

I do not demur from that in the slightest. As I said, I thought that I heard the Minister utter the words “now committed”. We will look at Hansard tomorrow and discover whether he did utter those words. If he did, I was very surprised to hear them. I, of course, accept that the number of pensioners in poverty has been reduced by half a million, I think the Minister said, by the operation of pension credit, and that is clearly a good thing.

As far as these individual pilots are concerned, does the Minister really think that one three-month pilot will be sufficient, or will we have a succession of pilots before we have a final rollout? Clearly, the clause provides for that. Equally, it provides for a pilot of anything up to 12 months; it could be one month, it could be 12 months. I do not know whether the Minister wants to answer that question.

In designing the pilot we have a duty to ensure that it is set up so as to provide good evidence on automatic payments, as well as protecting participants and spending taxpayers’ money wisely. We believe that a pilot of around three months in duration strikes an appropriate balance between being long enough to enable participants to experience an automatic payment while not being so long that they risk becoming reliant on it or the pilot becoming prohibitively expensive. Therefore, we believe that three months is about right.

That is very helpful but it does not quite answer the question, which was: although the clause makes provision for several pilots seriatim, is it the expectation that that will be needed, or will one pilot of whatever length—I am not arguing that point at the moment—be sufficient?

The expectation is that one pilot will be sufficient to do the evaluation. Obviously decisions about wider rollout will follow from that.

Good. That is exactly what I was after. I am very grateful to the Minister and, as a result, I beg leave to withdraw the amendment.

I could have spoken to Amendment 140 and the other amendments in that group but I chose not to. I reserve the right to come back to the points that they cover at the next stage of the Bill.

In our debate on the previous amendment, I sought an answer to the question: what is the appropriate length of a pilot? The Minister said that it depended on what the pilot was for. I take the point but the appropriate length is particularly relevant to Clause 24, which is shorter than the explanatory note in the Peers’ information pack which covers two pages of A4. At first blush, it might seem to some that the Government protesteth too much but, on closer examination, this long explanation of the clause is necessary and I for one am grateful for it.

Specified enactments relating to working-age benefits are already being piloted. These pilots last for 12 or 24 months depending only on what is being piloted. We cannot but agree that 12 months is too short a period and that it has been necessary to have one pilot after another. Each pilot is subject to the affirmative procedure and the order can be laid while a pilot is running its course in order to set-up provision for the next one.

The object of the exercise is to ascertain how to establish schemes that will, or will be likely to, encourage people to obtain or remain in work or make it more likely that they will be able to do so. The Government claim that it is necessary to extend the time limits from 12 months to 36 months,

“to develop a good evidence base”,

for policy advances. The Peers’ information pack continues that,

“pilots today normally need to last longer than 12 months”,

not least because their proper evaluation,

“can take at least 18 months”,

and it takes a further 18 months to start a new one. Add the two together and you get the magic number of 36 months for a pilot scheme. Yet the Minister told us—I think it was last week, although it could have been earlier; time flies when you’re having fun—that the pilots were to be evaluated not only at the end of their fixed period but throughout that period. That being so, it cannot possibly take a full 18 months to have an evaluation at the end of the pilot. Even six months into a pilot, the evaluators will have a pretty good idea of its likely success or otherwise on completion. In 18 months, you can be pretty certain of the result. It is just possible that it might throw up a wobbly in the last six months, but I think we can conclude that that is unlikely. To allow a further 18 months for this wobbly to evidence itself is ridiculous. Why, then, have the Government come to the conclusion that three years is the appropriate amount of time for a pilot?

There is another point at issue here, which again I alluded to in Amendment 147. The whole objective of a pilot is to evaluate whether the scheme therein is appropriate for rollout nationwide. It may—indeed, it often does—take more than one pilot to establish a final plan that is suitable for everyone in the country. The problem is that the longer pilots continue the greater is the delay to this universal application, on the one hand, and, on the other, if pilots are unsuccessful in achieving their objectives, the longer the people who are likely to be affected by a national rollout will remain in suspense.

Lastly, the Minister’s letter of 22 June—which I received this morning and for which I am grateful—shows that there is a great deal of inconsistency in the Bill. Some pilots, such as the pension credit pilot that we have just discussed, are to last for only up to 12 months. Others, like the one under the Jobseekers Act in Clause 24 or the right to control for disabled people, are to be for 36 months. To add to this complexity, the pilot for the transfer of sanctions on non-resident parents from the courts to administrative action is for two years, as is the initial pilot in the drug provisions in Schedule 3. As a result, I have come to the conclusion that two years is the right length of time for most pilots. I hope the Committee will agree that the Government have to have a very good reason to deviate from 24 months. Amendment 149 is consequential. I beg to move.

I thank the noble Lord for the amendment. The clause modernises the powers to pilot regulations under the Jobseekers Act 1995 and the Welfare Reform Act 2007 in two ways: it aligns the scope of the piloting powers across the two regimes for greater consistency in the way that pilots are conducted for the two benefits; and it extends the duration of pilots to a maximum of 36 months before they need to be renewed so that they are better attuned to the current approach to commissioning and evaluation.

The amendment seeks to restrict the operation of pilots under the Welfare Reform and Jobseekers Acts to a maximum of 24 months.. Before I deal with the amendments, it might be helpful to provide some background to the pilot powers. The first working-age benefit pilot powers were introduced in the Jobseekers Act around 14 years ago. They were an innovative measure which set the framework for testing new approaches and the 12-month renewal limit set at the time was appropriate for the scale of the pilots then being introduced. As pilot design and practice has become increasingly sophisticated we have sought to extend the length of pilots. Hence, we took powers in the Welfare Reform Act 2007 to test the employment support allowance measures for up to 24 months. However, these powers were introduced before we developed the pilots to test conditionality regimes, which will be expected to last longer than 24 months. The existing renewal limits for pilots constrain the commercial strategy and effective evaluation of pilots.

DWP is increasingly making use of contracted provision for the private and voluntary sectors to deliver employment programmes, including pilots. We want to continue to draw on the expertise of these sectors but short-term contracts for employment support programmes are often unattractive commercially and may not be viable if significant investment is required. Longer pilots tend to be better value for money and attract wider commercial interest. Developments in evaluation practice also mean that we now need longer pilots in order to gather robust evidence on which to base future policy. In order to capture a true picture of the effectiveness of a pilot, we need sufficient time for the longer term outcomes of a programme to be determined.

We recognise that it is important to find the right balance between modernising these powers while retaining appropriate levels of accountability. I assure noble Lords that the pilot regulations will still require approval from both Houses when they are first made and if they require renewal. This will continue to provide a full opportunity to examine and debate individual pilots. I hope that on that basis the noble Lord will withdraw his amendment.

I can well understand why longer pilots have a better chance of being applied for by contractors, but I am not so sure why longer pilots offer better value for money. I shall have to think about that unless the Minister would like to dilate upon the subject before I start thinking.

The point is that if we need a three-year period to pilot something and that pilot is going to be carried out by an external provider, if we were to seek to do it in two chunks rather than under one contractual arrangement there is a risk that fewer potential providers would come forward to engage in the pilot. They will factor into the contractual terms on which they are prepared to undertake the work the prospect that the pilot might not be renewed at the end of, say, 18 months. The facility for them to have the assuredness of a three-year pilot—if that is the judgment as to the length of pilot needed to test the proposition—is a commercial benefit. That is why there is a value-for-money component.

That is helpful. The basic judgment of 36 months remains to be explored but this is not the right moment to explore it. However, it may be possible. The Minister is very good at offering meetings with his officials and that might be an appropriate time to explore the issue.

We should be clear that allowing for 36 months is one thing; it does not necessarily mean that every pilot would have to be for three years.

I understand that.

I have a tabulation of the issues which arise under the Bill and the proposed length of piloting of the various proposals. I shall be happy to share it with the noble Lord. He has referred to some of them. We spoke about the pension credit pilot and the three months relating to that. The noble Lord referred to the right to control Trailblazers in a case where we are looking for three years. Some of the others will require only two years. With the personalised employment programme we are looking for three years, with the possibility of extending it beyond that. There is different thinking about the appropriate lengths for a range of issues within the Bill.

I am extremely grateful for that offer. I should certainly like the opportunity, at an appropriate moment, to look at the chart to see whether it would be appropriate to come back on this at the next stage. Clearly it is not appropriate to pursue it at the moment. I beg leave to withdraw the amendment.

Last weekend the Minister in charge of public service reform, Mr Liam Byrne, said that the Government were to offer better access to public services. He said:

“We need a power shift from Whitehall ministers and civil servants that currently have the power and move it to citizens … so we have been developing a strategy that takes public services away from a target culture to giving people rights and entitlement to core public services”.

He may not have been talking specifically about the benefits system but my amendment setting out a claimants’ charter is surely in line with the Government’s new thinking. The proposal is all about enshrining a claimant’s rights and responsibilities in a charter that would be given to all benefit claimants at the beginning of their engagement with Jobcentre Plus or an external provider so that everyone knows where they stand. It would set out clearly the rights and obligations of Jobcentre Plus and the private providers and voluntary organisations that work under contract with Jobcentre Plus, and would be enforced by an independent ombudsman. It would set out clearly the claimant’s rights and responsibilities.

My honourable friend in another place, Paul Rowen, moved a much more prescriptive amendment along the same lines in Committee in another place but this amendment is different and is very simple. In view of the groundbreaking nature of this Bill, it is surely a sensible provision and one that I hope the Government will not resist. How could they possibly resist? I beg to move.

I support this amendment. I thought that it was very admirable when I first saw it. It is clear that we are talking about a very complicated piece of legislation, which refers to the rights and duties of claimants. It is very necessary that those claimants should know what those rights and duties are. If they do not know what their duties are, they may not get their rights. It seems to me necessary to have some sort of charter which establishes where they stand and what they may do if they do not get what they think they are entitled to.

Subsection (3) of the proposed new clause refers to the provision of regulations to enable benefit claimants to make complaints to an ombudsman. That is very sensible as well because the Bill provides for employment services to be contracted out, so very often you will have not public services but private providers. In such circumstances it seems to me very necessary that there should be some means for claimants to make complaints appropriately and to be able to put them to an ombudsman service when they believe they have not received their rights. Therefore, I hope that my noble friend will feel that there is something to be said for this amendment, and that even if he does not like its wording he will produce something like it before the Bill leaves this House.

I, too, support the amendment. It seems to me that it has enormous advantages. First, if it were suitably drafted, and the claimants’ charter were sufficiently well drafted, it could help to avoid the dangers that might confront not very clever claimants or claimants with not very good English. Such a charter could provide them with a clear picture of what will happen, what their rights are and who is available to help them. It might also have an important role to play in the image that jobcentres project. I expect that the Committee will remember what we used to think about traffic wardens—little Hitlers. There is a very real danger that jobcentres could gain such an image. That difficulty could be avoided with a suitably designed charter.

I, too, support the amendment of the noble Baroness, Lady Thomas. Her timing is absolutely impeccable, given the announcement last week or this week. I cannot remember when that was; time goes by so fast. I would not like to see a charter gather dust on the shelves and be hauled out only when somebody asks for it specifically. It should be handed out with every single first claim so that people know about it right from the beginning. I believe that it would also enormously help the people who would administer the charter because they will know where the lines are drawn as well. They will know whether somebody has the right to complain, and not seek to hide that.

I recall a case that occurred some years ago where somebody wanted to complain about the doctors who handled Benefits Agency claims. That was before Atos. That person complained to the GMC and got nowhere because they were told that the doctors were employed by that organisation. When they complained to the organisation, they were, of course, totally ignored, so they had a problem. An ombudsman would be the ideal person to deal with such a situation. Therefore, I support the amendment.

I, too, strongly support this amendment. Perhaps I should declare my interest as chair of a mental health trust. It occurs to me that this amendment would be incredibly helpful for our staff—social workers and community psychiatric nurses—who spend an inordinate proportion of their time guiding our patients through the benefits system. If they had access to a charter that set out the rights and responsibilities of their patients and service users, everyone would get a far better service. The precious time of our staff may be saved in order to spend more time looking after the mental health of their service users instead of working around, through or with the benefits system. There is great merit in this amendment, which reflects the Prime Minister’s wish to have a more transparent situation with our government departments. On those grounds alone, I would hope very much that the Minister would support this amendment. If he has any doubts about it, I hope that we can add it to our long list of issues that we wish to discuss with him when we meet before Report.

The noble Baroness, Lady Thomas, has made her case for a claimants’ charter. I was glad that she noted the importance of a claimant’s duties as well as their rights. Charters serve to provide a framework against which providers and clients are able to transact their business and can strengthen the relationship of both. Duties as well as rights are important, as my noble friend Lord Skelmersdale pointed out in the debate on sanctions. It is a sort of two-way street. The concept of welfare needs to change so that the idea of money for nothing is abandoned. My noble friend mentioned this a short time ago when he said that committing a benefit offence needed to be punished with a benefit sanction. It seems to those of us on these Benches that especially, although not exclusively, at times like this when public finances are stretched to the limit—if I can use that understatement—every last million must be spent wisely. That is why we support the progression-to-work principle. It targets welfare spending in a constructive way and helps people into the workplace. We have made clear that the state must also honour its obligations. We proposed, for example, repaying wrongly confiscated benefits in a lump sum to right the wrong. So I am at one with the noble Baroness when we consider welfare schemes as having reciprocal obligations.

I am less certain that the charter is the right way to go about achieving the goal of reciprocity. Is there not a risk that once written down in one document the rights become immutable and inflexible? Would it not be better to tailor advice to individuals in their action plans so that they know what is expected of them, what they will receive and what they must do in return, rather than create a holy text of fixed rights? There must be a dynamic to any relationship between client and provider.

I will be interested to hear what the Minister has to say in response to all this in the light of announcements made by the Government in the past few days. The Building Britain’s Future document—some unkind critics have dubbed it the Labour Party’s next manifesto rather than a national government plan—apparently promises among other things, under the eye-catching headline “Take a job or lose your benefit”, the guarantee that young people will find a government-created job and, if they refuse it, will face having their benefit docked. That sounds rather like raising expectations. I hope that the Government are able to fulfil them.

I wonder whether such a charter as envisaged by the noble Baroness would cope with the expectations raised by this Government in the light of an alarming report in the Telegraph this morning. It said that the Local Government Association estimates that in the first quarter of this year we are on course to have some 935,000 young people classified as NEETs, which is up from 810,000 in the same period last year. With a claimants’ charter in place, this Government might find themselves facing a very large number of complaints.

I hope noble Lords will allow me to go into a little detail in response to our debate. I thank the noble Baroness, Lady Thomas, for tabling this amendment, which proposes a claimants’ charter, and all noble Lords who have spoken to it: my noble friend Lady Turner, the noble Lords, Lord Northbourne and Lord Taylor, the noble Countess, Lady Mar, and the noble Baroness, Lady Meacher.

I welcome the spirit of this amendment and the values behind it, which the noble Baroness, Lady Thomas, has set out. Noble Lords may not be surprised to hear that I do not believe that the amendment is the best way to achieve the objectives that all noble Lords seek. The effects of the amendment would be twofold. It would require the department to have a claimants’ charter that sets out customers’ rights and responsibilities under the Bill. It would also establish a new employment services ombudsman to consider disputes between claimants and the department or its delivery partners.

As I have said, we agree with the underlying sentiment of the amendment, which aims to ensure that individuals understand the support that the department will provide them, what is expected of them in return—as my noble friend Lady Turner has said—and their rights of redress, which are very important, if the department does not meet its obligations. Indeed, the previous Secretary of State met the chairman of the Work and Pensions Committee and representatives of a number of groups, including Gingerbread, the Disability Alliance, Citizens Advice and the Child Poverty Action Group, to discuss how we can best meet these objectives. Officials have since met stakeholder groups twice to go into the detail of how we might address their concerns.

The suggestion of a charter is interesting and we have some sympathy for it. Work is already advanced in the development of a DWP customer charter of service standards to cover all DWP customers. This is based on what customers have told us is important to them. It might be a good idea to distribute this work to Members of the Committee so that they can see what kind of charter we have in mind.

The charter reflects four themes that were identified as important drivers of the DWP’s customer experience. The first theme is the right treatment. We want to ensure that it delivers the best possible customer experience by listening carefully, offering good advice and treating our customers with respect. The second theme is the right result. We want to ensure that our customers receive the right benefit on time. We also want to help those who can move into employment to do so, rather than spend a life on benefits. The third theme is being on time. We want to improve processes, using the experience and the ideas of those who deliver and use them. We will give customers a good idea of how long things will take and keep them informed all the way along their journey. The fourth theme is easy access. By making systems more straightforward and helping customers to access help through self-service routes such as the internet, we will free up time to devote to customers who need our help the most.

These are aspirational goals on which the department is working as part of its strategic goal to be an exemplar of customer service delivery. Although detailed service standards vary according to operational needs, the charter will provide a common framework to deliver a consistent approach in our customer communications on service standards. Noble Lords might ask why, if we are planning a charter anyway, we do not accept the amendment. First—I appreciate that this is a technical point—the scope of the amendment is limited to the provisions of the Bill.

As I have said, we plan to introduce a customer charter for all DWP customers. We believe that creating a similar charter for customers affected only by the provisions of the Bill would create unnecessary complexity and prove difficult to administer in practice as it would, in effect, exclude other key customer groups. A further issue is that by legislating for a charter, we may limit our ability to respond to changing circumstances and our ongoing discussion with stakeholder groups. Claimants’ needs change; policy moves on; aspects of law become irrelevant; and interest groups come up with new ideas on how to support our customers. We need to be able to respond to those developments quickly, without making changes to legislation. By not being bound by legislation, our approach to developing the DWP customer charter is more flexible and more easily amendable in the light of customer experience.

The amendment does not specify word for word what has to go into the charter. Those words can be changed from time to time, as and when necessary. It would just include the foundation of the charter in the Bill, and I would like it to be there.

It seems to me that there would be great value in including something in the Bill referring to the Government’s charter. The problem may be with new subsection (1), which states that regulations,

“shall make provision for a claimants’ charter to set up the rights and duties of claimants under the provisions of this Act”.

Clearly, there would be merit in removing the words,

“under the provisions of this Act”,

so that the charter would apply to claimants in general. The important point that I want to hear a response to is whether the noble Baroness has any objection to including the principle in the Bill—a commitment to regulations to set out a charter. That would be very helpful.

I am not sure that it would have got past the Public Bill Office if it did not refer to this Bill.

We understand the thrust of the arguments of the noble Baroness and the noble Countess, Lady Mar, but beyond the technical problem that accepting the amendment would give us, as it would restrict the effect on customers to the effect of this Bill, we believe that the charter would give us far more flexibility to deal with future circumstances if its profile was not in the Bill. We are certainly enthusiastic about having a charter, but not necessarily a legislative charter.

I am with the Minister on this issue, because I do not think that the department needs to legislate to have a charter. One problem with legislating for the charter is, as the Public Bill Office advised the noble Baroness, Lady Thomas, that it would have to apply only to the Bill, which would limit what the Minister has suggested that the department is engaged in producing. It would help enormously for us to see the draft of the document. I believe that it is a step forward, and it should have the capacity to change, as the Minister said.

Like the noble Lord, Lord Taylor, we want to hold onto the flexibility that not having this in the Bill would give us. However, noble Lords have put forward some interesting ideas. My noble friend and I will certainly consider them over the summer and come back after our considerations, but I cannot give any guarantees that we would move any further than I have stated today.

The rights and duties of customers will vary with their individual circumstances, as the noble Lord, Lord Taylor, said. Indeed, it is an objective of the Bill to provide increasingly personalised support for individual customers in recognition of the fact that each of them has unique personal circumstances. While some broad principles will apply across the board, many of the detailed arrangements between the department and its customers will reflect what is appropriate in each person’s particular circumstances.

We have already provided a range of information to customers about their rights and responsibilities and the help which is available to them. For example, the specific requirements of each benefit are set out in leaflets and on claim forms, and every JSA claimant is given a booklet which gives them their signing-on time and sets out the JSA conditionality requirements. We accept that we need to further inform our customers and to empower people more in the whole process. We need to make customers feel that they are far more in charge of the process than many feel they are at present. The amendment and the following debate actively help us to look at that in more detail.

Noble Lords will probably be aware of the discussion on a similar amendment during deliberations in another place. Following these discussions we have had some constructive exchanges with a wide group of stakeholders to see what more can be done to ensure that customers understand what to expect from Jobcentre Plus. We have incorporated a number of suggestions into a Jobcentre Plus leaflet, which brings together information about the service standards customers should expect and what they should do if they are not satisfied. Again, as with the mock-up charter, I shall ensure that Members of the Committee receive the draft leaflet that has emerged from the discussions with stakeholders over recent times. The leaflet is in the final stages of drafting and stakeholder feedback has been positive. We are now looking at how to distribute the leaflet in a way that best meets the needs of our customers. This work will underpin the development of the charter that I have set out.

The amendment also proposes the establishment of a new role of employment services ombudsman to hear claimants’ complaints against providers of employment services in relation to rights and duties under the Bill. Detailed provisions already exist to inform customers of what they are entitled to, and of their right to seek a review of decisions made and to have their case heard by a tribunal. In addition, through the DWP’s contracts, those providing services on behalf of the department are required to provide tailored help to support customers and improve their ability to access sustainable work.

Customers already have the opportunity to raise complaints against providers. They can complain to the provider and if not satisfied with the result may complain to the department. Complaints will be investigated at a district level and escalated to DWP contract managers where appropriate. DWP contract managers are responsible for ensuring that providers meet the obligations within their contracts, including effective service delivery to our full range of customers. This is an effective contract management process and customers’ complaints and quality of service delivery is integral to this process.

Customer service and complaints feed into the quality assessment of contract delivery and formal provider performance reviews. In supplementing this process, Jobcentre Plus holds provision engagement meetings with providers. A key feature of these meetings is the customer’s own experience, where complaints and issues will be discussed and improvement actions agreed. Contracted provision is already exposed to extensive independent assessment—for example, the training provision within the new deals is subject to adult learning quality inspections by Ofsted in England. Customer experience and the quality of the service to our customers are integral to this assessment.

We will be reviewing provider guidance to ensure that it is explicit in terms of complaints procedures and escalation routeways. If necessary, customers unhappy with their treatment by providers may have the matter investigated by our independent complaints examiner, and ultimately by the Parliamentary and Health Service Ombudsman, Ann Abraham, using our normal arrangements. In this way, these customers are treated the same as those dealt with by Jobcentre Plus advisers.

We believe that the creation of an employment services ombudsman as set out in the amendment would duplicate many of the functions already covered by the Parliamentary Ombudsman, to whom DWP customers can already apply, and that could lead only to unnecessary bureaucracy and confusion. Such a fundamental change to the role of the ombudsman would also require a significant amendment to the Parliamentary Commissioner Act 1967 to avoid confusion and duplicated provision.

I apologise for the length of my response. This is an important issue that goes to the heart of empowering DWP customers across the range of benefit provision. I hope noble Lords will recognise that we entirely agree with the motivations behind the amendment and are taking action on the key issues that it raises. This is work in progress but it is definitely heading in the right direction.

Could the noble Baroness give an assurance that these documents will be written in plain English?

The noble Lord asked earlier about the language in the documents. I am happy to report that the DWP charter has been approved by the Plain English Campaign, so the noble Lord’s wish has been granted.

Social security information is translated into many ethnic languages these days. Is the noble Baroness satisfied that the documents we are discussing would meet, for example, the conditions of the plain Urdu awards?

Oh!

It is a serious point.

I cannot give the noble Lord an immediate answer on that specific point, but I am very happy to write to him.

Before I go any further, I welcome the noble Lord, Lord Freud, to our deliberations, who I think is the architect of the whole policy, if not the actual Bill. It is very good to see him here.

I thank all noble Lords who have spoken in this short debate. I became very excited for a time given that four noble Lords were enthusiastically supporting my proposal. I thought that I might have scored a bullseye. However, the noble Lord, Lord Taylor, rained on my parade a little and the Minister said that there was already a plan for a charter of standards, as I believe it is called. The Grand Committee would be very interested in looking at that. It sounds as if it could be what we are talking about. I suppose that it would be given to all claimants from the beginning of their claim.

That is not clear. The cost implication would have to be gone into, and whether the beginning of the claim process was the right time. Therefore, I cannot guarantee that the document would be given to claimants right at the beginning of their claim.

I was thinking of something that could be put up in every Jobcentre Plus office so that everybody knew where they stood. We may have to return to this when we have looked at the charter to which the noble Baroness referred. I am very grateful to her for giving such a full reply about the right of redress, which is very important. We have heard a lot about that and know more about it than we did previously.

There is obviously great support around the Grand Committee for the whole idea of a document which gives clear rights and responsibilities. I take the noble Baroness’s point that we want it to apply more widely than just to the Bill, but welfare reform Bills, like No. 159 buses, come along quite often; perhaps soon we will have a third Bill in which a charter could be included. In the mean time, I shall read what the noble Baroness said. I beg leave to withdraw the amendment.

The amendment would ensure that all Jobcentre Plus staff and contracted provider staff involved in supporting claimants into employment were adequately trained to recognise and meet the multiple needs of those with particular barriers to work.

Three of the biggest themes of this Grand Committee have been: first, the flexibility needed for the treatment of lone parents with very young children; secondly, real concern about the treatment of those with severe but fluctuating mental health problems; and, thirdly, the importance of Jobcentre Plus staff and contracted staff being adequately trained to meet the needs of an even wider pool of claimants than ever.

How Jobcentre Plus and contracted staff deal with claimants will be crucial as to whether the reforms in this Bill will work in the way that they should. Discussions in the past few weeks in Grand Committee have demonstrated that there is, I regret to say, very little confidence that there is adequate training in place for staff having to meet the needs of the greater number of claimants with complex mental health needs in particular. We had a long debate on, I think, day three of Grand Committee about whether the “work for your benefit” scheme should not be rolled out unless the Secretary of State was satisfied that jobcentres around the country were ready enough to manage it. But that amendment concerned only Clause 1.

I think the Minister indicated that he would deal in more detail with training staff on mental health and other issues when we reached later amendments, and I hope that he was thinking of this amendment. I expect he will say that claimants on the employment side of the ESA will already have had a work-related health assessment and that the JCP personal adviser or disability employment adviser will have that assessment on a claimant’s file, whereby the staff can see if there is, for example, a severe but fluctuating mental health condition that would show that a claimant may need sensitive handling. This is not always happening.

The fear of many people who work in the mental health field is that vulnerable claimants who in the past would have been on incapacity benefit will, if they are new claimants, now be on the employment rather than the support side of the ESA and that JCP staff and private-sector staff may not have been sufficiently trained to deal with all the various mental health conditions that they are likely to come across. One MIND survey respondent said:

“Advisers, employers and work colleagues still lack understanding of mental health issues—stigma is alive and kicking. Just because my disability is not visible it’s just assumed I was workshy”.

There is, of course, also a strong likelihood that some long-term claimants of the JSA will fall into depression that could be mild or severe, and therefore it is not just ESA claimants with existing mental-health conditions that employment advisers should be aware of, but potentially all longer-term claimants. Will all employment staff, either in JCP or in outsourced companies, be sufficiently aware of the symptoms of undiagnosed clinical depression or of another condition common among ex-military personnel—post-traumatic stress disorder? I received one case study about a woman with this condition and with mobility problems. She was told that she must attend at very short notice a two-day course 30 miles from her home called Activate. The outsourced provider had not received any medical information from JCP because of “system problems”. It was not until she had an advocate from her local advocacy service that her case was finally postponed until the provider had her medical assessment.

I strongly support this amendment, which will not surprise the Minister since we have spoken about training on a number of occasions in relation to the other welfare reform Bill. The noble Baroness, Lady Murphy, would have wished to contribute to this debate, but she is heavily involved in the Chamber on the Coroners and Justice Bill. I know that she would wish noble Lords to be aware of her commitment to this amendment. Likewise, I am very committed to this amendment.

It is absolutely essential that levels of competency should be clearly specified for these crucial staff. When you look at the proposed new subsections under this amendment, the enormity of the job that these people are being expected to perform becomes clear. These front-line staff would need to have a detailed understanding of how to deal with people with a multitude of different mental health fluctuating disorders and other disorders, a detailed understanding of how to deal with people dependent on drugs and a detailed understanding of the childcare needs of a variety of different children, including those with and without disabilities and all the rest of it. From my small perspective, I am very conscious that personal advisers on the front line of jobcentres do not have the understanding that they need to deal effectively with people with mental health problems. They simply do not have those skills and they tell us that they do not.

It is profoundly important that there is clarity about the levels of competency that these people need in all these different areas. I would put a plea to the Minister that these levels of competency should be set out. If an office cannot show that the staff have those levels of competency for the various client groups, the conditionality clauses should not come into effect. If you sanction claimants—or customers, as Ministers like to call them—when staff are swimming around and do not understand what they are doing, the likelihood of gross injustice is very high. Again, I strongly support this amendment and I hope that the Minister does so too.

I, too, support this amendment, which perhaps is one of the most important. Jobcentres would need to be successful in convincing their clients that they are both friends and advisers, but at the same time would have the power of conditionality to discipline them. Only if the advisers can achieve that degree of rapport with the people they are dealing with will they be successful and the reputation of the jobcentres will be the sort that we want them to have.

The noble Baroness, Lady Thomas, spoke about people with disabilities. The amendment refers also to people on drug dependency and victims of domestic violence. But your Lordships will probably not be surprised if I say that the proposed new subsections in the amendment that interest me particularly are those that refer to “claimants with caring responsibilities” and “parents with dependent children”. In any forthcoming version of this amendment, I should like to persuade the noble Baroness to exclude the words “lone parents” because very often parents are not “lone”. There are parents who for a variety of reasons have very real problems.

I have previously said on one of my amendments how important and difficult it will be for these advisers to understand the family dynamics of the many people with whom they have to deal. Would it not be the right solution for jobcentres to have support from specialists who understand all the areas where problems might arise so that they can refer cases where they have any measure of doubt or get advice and support from an expert in the relevant field?

I support the amendment in the name of the noble Baroness, Lady Thomas. For four years, I had the privilege of being the chair of the Social Care Institute for Excellence and, while reading the amendment and listening to the noble Baroness, I thought, “These are the kinds of duties that we spend three years training social workers in: understanding and being empathetic to, but also having phenomenal knowledge of, the complexities that a whole range of disabilities bring, let alone all the social problems that attend those situations”.

I take my hat off to any Jobcentre Plus worker who enters into this knowing that they might have to lay conditions on someone when they cannot quite understand where they are coming from or what they are doing because they do not have a degree in social work. I therefore absolutely support the noble Baroness on this one. Actually, I had already thought about it. After hearing noble Lords’ interventions, it struck me that I felt I was back at the Social Care Institute for Excellence, where we provided detailed guidance and practice to the very people whom we are talking about in this debate.

I, too, having already moved amendments on training, support the noble Baronesses’ amendment. I have a horrible suspicion that the Minister will say, “We do not like shopping lists”, but I make a plea. The noble Baroness, Lady Thomas, was very persuasive about people with severe but fluctuating mental health problems. People with some illnesses, such as ME, fibromyalgia and the noble Baroness’s own illness, start off looking well, as do people who are mentally ill, and they might be tracked into the wrong ESA; they might be tracked into the work-related ESA when they should be in the support ESA system. JCPs need to be able to differentiate between the two. I know that they are not medically trained.

I also recognise that a lot of these conditions are still disputed by the medical profession. Some people will give a diagnosis of ME, for example, and others will not; they will say that it is a mental illness. However, I repeat, again, that the World Health Organisation and the Department of Health say that ME is a physical, not a mental, condition.

I very much support the noble Baronesses’ amendment.

I am extremely glad that the noble Baroness, Lady Thomas, has focused her thoughts on training and has introduced this amendment. That said, she has chosen to focus on Clause 25, which is about contracting out. One therefore assumes that a lawyer would understand the amendment to refer to contractors who are doing things such as carrying out work-focused interviews, preparing action plans or talking about specified activities for particular people, to mention just a few of the activities that, in Clause 25(2), can be contracted out under new Section 20E of the Jobseekers Act 1995. Despite that minor criticism, however, I support the amendment as far as it applies to Jobcentre Plus employees.

I have difficulty with the amendment as I understand it in that, if the contracts are operated properly, no contract will be given to any organisation that cannot produce people with the specified level of training that the noble Baroness, Lady Thomas, and I think all Members of the Committee, want.

I thank the noble Baroness for the amendment and all noble Lords who have spoken on it. The noble Baroness, Lady Thomas, said that she hoped this would be the amendment on which we would discuss the details of the training of Jobcentre Plus staff. With respect, we have probably done that on more than one occasion along the way. However, I am happy to reiterate and go over some of it again.

As the noble Lord, Lord Skelmersdale, said, the clause is focused on contracting-out functions. Of course there is a relationship between Jobcentre Plus and the contracting-out provider—there is an interface—but I recognise, as I hope I have done throughout our discussions on the Bill, the concerns that noble Lords have expressed. Whether they are to do with fluctuating conditions, mental health conditions, disabilities more generally or the need for sensitivity towards people with caring responsibilities, all have been reiterated in our debate so far today. I stress that we need to make sure that Jobcentre Plus is equipped to deal with the range of challenges that it has.

The noble Baroness, Lady Campbell, described perfectly the breadth and challenge of the issues that present to our staff and to providers. It is never going to be a job that is completed. There will be a continual need to train and engage.

The amendment would require the Secretary of State, when contracting out functions under the Jobseekers Act, to specify in the contract the level of competency required by the contactors to enable them to address the specific needs of, and barriers faced by, each group identified in the amendment.

I understand the concerns that this amendment may be trying to address, as I have just expressed. However, I do not believe that it would be practical for contracts to include details about the specific level of competency required for them to meet the individual needs of each of the vulnerable groups that this amendment covers. Within the procurement process we will ensure that we contract only with providers who are skilled in delivering the support that each group to be assisted under the contract will need.

For instance, in the provider-led pathways invitation to tender, we asked bidders to describe the relevant skills held by the organisation or the experience of their employees, or their sub-contractors, to enable them to deliver the provision effectively and address the specific needs and barriers of their customers. We also asked for specific information on the roles, qualifications and experience required for each post needed to deliver the provision.

In addition, the procurement process will have requirements within the terms and conditions of contracts for contractors to ensure that their employees are suitable in all respects to deliver the programme. I can assure the Committee that the vulnerable groups mentioned will be given adequate protection so that the contractors’ employees will possess the relevant skills, training and experience they need to enable them to deliver the provision effectively and address the specific needs of their customers and the barriers they face in finding work. When we use the powers given in Clause 25 to contract out functions, we will take steps to ensure that contractors’ employees are properly trained to deliver the programme. However, I do not believe that the specific proposals included in the amendment would be the right way to go. We need to recognise that providers will have to provide individualised support to their customers and demonstrate across the board that they have the capacity to draw in or have the expertise to deal with that.

On the point made by the noble Lord, Lord Skelmersdale, on three days’ training, that is not the only training that people will get. We will conduct a full training needs assessment before piloting the measures in the Bill. It is inconceivable that that would conclude that three days’ training was sufficient.

I shall pick up on one or two points raised. A lot of the discussion concerned the training that Jobcentre Plus staff have, rather than the training that providers have, which is what Clause 25 is about. I reiterate what should already be on the record. As for personal advisers, with reference to ESA, Jobcentre Plus pathways-to-work personal advisers undergo training on a range of mild to moderate health conditions. This includes extensive interview skills training and the skills to help customers to identify their work-related capabilities. As part of this training, advisers are signposted to sources of information and advice to help specific groups of customers. In Jobcentre Plus areas, the pathways personal advisers also have access to disability employment advisers and work psychology personnel. I think that the noble Lord, Lord Northbourne, asked about the availability of particular expertise. These personnel have in-depth expertise on specific conditions. Customers with complex conditions can be referred to the DEA or work psychologist for additional advice and support where this is appropriate.

On lone parents, there are issues around those with caring responsibilities. As regards the training programme for lone-parent advisers, there is an adviser skills workshop, a two-day facilitated event to introduce learners to quality assurance framework 1 and enhanced skills; a further workshop, a two-day facilitated event, to provide learners with effective job placement abilities; a further workshop, a two-day facilitated event, to provide support to a customer in finding work; and a further workshop, a two-day event, to provide learners with the skills to work effectively with customers whose personal circumstances inhibit job search. There is a further workshop—a two-day event—to provide learners with the skills to work with customers who have health conditions and/or disabilities. That is just a snapshot of some of the training that takes place currently.

It is not only an issue of the training available, but about monitoring the performance of Jobcentre Plus advisers. Advisers are closely monitored through an internal adviser achievement tool to indicate the volume of interviews each adviser has conducted. When used in conjunction with our quality assurance framework it allows advisory service managers to monitor quality and quantity of interviews at the end of each monthly reporting period.

Are mystery shoppers used to monitor the performance of Jobcentre Plus advisers?

I am not sure whether we do. I can see the benefits of doing so. I am advised from the Box that we do. There are also issues around the training that our disability employment advisers get. They undergo extensive and specialist training on top of that undertaken by generic advisers. This includes 52 hours of training on effective communication and support to disabled customers with more complex support needs. I could also go on about the training for personal advisers on learning disabilities. A range of training is undertaken.

When these workshops are being run, are there people from the individual categories who give their experience of their relationship with jobcentre staff? Explaining their difficulties would assist such staff. It is all very well to have a tutor at the front of the room who says this, this and this, but to have an individual who has undergone some of the processes would be enormously helpful. That has been recognised in a much wider field outside. Will the Minister take that on board?

The noble Countess, Lady Mar, makes a very important point. The whole concept of service users being engaged in evaluating and helping to deliver a service is very important. We have had extensive discussions, as the noble Baroness, Lady Thomas, will know, about how the benefits system impacts on service users, when they get paid and how expenses et cetera come into play, which could be an inhibitor for service users to engage. We are beginning to address that. There is a little way to go, but we are on the path to a satisfactory outcome. That is particularly important in the health service, but there is no reason why it should not similarly operate for Jobcentre Plus and DWP more generally.

In conclusion, I am conscious that that response will be a disappointment because we have not accepted the amendment as it is set down. But we have common cause in making sure that Jobcentre Plus personnel are trained to do the job that is required of them if we are to make a success of these proposals. That similarly runs to our providers. The key is not to be overly prescriptive in what we set down in legislation. Ultimately, it is a matter of how those contracts are constructed and how they are monitored. We will make sure that there is performance under those contracts to achieve what we want.

I am grateful to all noble Lords who have supported the amendment. I apologise; I am not sure why it was tabled to this clause, but I am grateful to the Minister for replying more generally, as though it were in the right place—which it was not.

I was particularly grateful to the noble Baroness, Lady Campbell, for her views. She seems to be at the back of so many things; now I hear that she has been responsible for saying how social workers should be trained. In a way, we are asking Jobcentre Plus staff to be a bit like social workers in some of the things that they have to do; I expect that some of them feel like social workers. On the whole, they do a good job and are subject to the most terrible pressures. We hear some horror stories as well from our friends in citizens advice bureaux and other places, and there is a lot of worry among some groups about whether the staff recruited so quickly to cope with the terrific surge in unemployment have received enough training to cope with the Bill, although I note that it will be started in some pilot areas.

Jobcentre Plus is still recruiting. I think that it would be a good job. I keep asking my unemployed friends whether they would mind trying for a job in Jobcentre Plus, so I could hear what really went on. They have not taken me up so far.

I am grateful to the noble Lord for his full response, and to the noble Lord, Lord Skelmersdale, for saying that we have focused our thoughts on training. As he knows, that has been a leitmotiv to the whole Committee. It is about time we finished the whole day, so I beg leave to withdraw the amendment.

This may be a convenient moment for the Committee to adjourn.

Would it be sensible for Clause 26 to stand part before we adjourn the Committee?

There is another amendment.

I believe the Committee is expecting to debate another amendment.

I apologise.

As I was saying, perhaps this is a convenient moment to adjourn until Thursday at 2 pm.

The Committee stands adjourned until Thursday at 2 pm.