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Employment and Support Allowance (Work-Related Activity) Regulations 2011

Volume 727: debated on Thursday 19 May 2011

Motion to Approve

Moved By

That the draft regulations laid before the House on 28 February be approved.

Relevant Documents: 17th Report from the Joint Committee on Statutory Instruments, 24th Report from the Merits Committee.

My Lords, these regulations establish a new requirement for some employment and support allowance customers—those who are able to prepare for a return to work—to undertake activity that will help them move closer to employment. The regulations amend current rules to allow people assessed as being able to prepare for work to engage in activities such as training, CV writing or researching local employment opportunities.

The regulations are about extending a hand of support and giving a nudge of encouragement to people who have been out of work as a result of a health condition or disability, but who may be able to return to the workplace with the right level of tailored back-to-work support, primarily under the umbrella of the Work Programme. The regulations are deliberately non-prescriptive to allow this support to be adapted to the individual and to ensure that it is flexible enough to deal with fluctuating conditions.

The regulations apply only to those in what is referred to as the work-related activity group—people who can reasonably be expected to prepare for a return to work. We remain committed to providing unconditional support for severely disabled people who cannot work, but we have also made a commitment to support people with a disability or health condition who have the potential to work in future. We are convinced that work-related activity should form part of that support.

Some noble Lords here for today’s debate met officials from the Department for Work and Pensions and me to look through some of the detail of these regulations. It was a very useful meeting and I hope that the forensic investigation has already gone some way towards allaying concerns.

For our purposes, I will take a few moments to set out for the House the history of the regulations. The powers that we wish to enact today are evolutionary, building on the work of the previous Government. They were taken by the previous Government in May 2007 but never brought into force. We believe that it is crucial to enact them as originally envisaged for new customers, but also to extend them to existing customers, providing the same level of support for all.

The notion that disabled people or those with health conditions should be able to access support to help them move closer to the labour market was in the Conservative Party Green Paper, Responsibility Agenda, published in January 2008. This paper set out, for the first time, that help should be extended to the existing stock—as it is vulgarly called—of benefit claimants, namely people written off on incapacity benefits, many of whom had received little or no support. The previous Government set about implementing this idea with the introduction of the employment and support allowance in October 2008. This included the intention to provide mandatory work-focused interviews and some work-related support for new customers, but no plan to extend the support to existing customers—the “stock”. In December 2008, Professor Paul Gregg published a report recommending extending and improving support for all customers and the Government of the day accepted his recommendations.

Convinced of the importance of providing back-to-work support for all customers by the summer of 2014, all current incapacity benefit claimants will have been assessed for ESA. Those customers placed in the work-related activity group will, if these regulations pass, be able to access this improved package of support. These regulations make participation in work-related activity part of the mandatory package. Quite simply, the evidence of the beneficial impact of work, even for those with a health condition or disability, is too strong to ignore. The regulations before the House today seek to ensure that, for those who can, taking part in activities designed to help them return to work becomes a normal part of the ESA regime.

I stress that these regulations do not apply to all ESA customers. The group we are particularly concerned with are those customers who make up the work-related activity group, who we can realistically expect to return to work at some future point. Once we have recognised that someone is capable of work-related activity, it is vital that we provide opportunities to engage with the labour market and offer support to identify achievable and sustainable work-related goals. These regulations provide for that support to be delivered, empowering individuals so they are able to take real, active steps to improve their chances of securing employment once their health or condition improves and they are ready for a return to work.

The regulations do not specify the type of activity that we expect this group to engage in. Indeed, the definition of work-related activity is deliberately broad, covering any activity which makes it more likely that the person will obtain or remain in work. However, there are some absolutes. We will not require customers to undertake medical treatment nor to seek, apply for or take up work. Beyond that, we do not want to be overly prescriptive. The emphasis is on the relationship between advisers and individual customers working together to tailor a plan of action that will always be reasonable, realistic and relevant.

Customers who do not participate in work-related activity will be sanctioned, and I know noble Lords have some concerns in this area. In response, let me just say this: there are safeguards in place to ensure that sanctions are not improperly applied. Sanctions will apply only to the work-related activity component of the benefit and will be applied only by trained Jobcentre Plus decision-makers, who will have the freedom and expertise to exercise their discretion. The decision-makers receive comprehensive training to enable them to seek out and assess all available evidence to ensure customers are given a fair hearing. In addition, Jobcentre Plus has a robust appeals process for anybody who is unhappy with a sanction they receive. I set out the full complement of available protections in the letter I sent to Peers earlier this week.

The main question that the Merits Committee, which looked at this, was concerned about was adviser training and capacity. JCP will set the standard for employment-related personal adviser services in the UK, and Edexcel has endorsed the learning route ways for personal advisers and assistant advisers. We must avoid the mistakes inherent in previous employment programmes that sought to compartmentalise customers and offered only a narrow range of support options based on predetermined assumptions. Flexibility is the key, and the support provided through the Work Programme will be tailored to individual circumstances, including taking into account any ongoing health issues.

We will guarantee the quality of the support provided through the Work Programme by implementing a demanding payment-by-results structure without dictating to providers how those results should be achieved. This will give providers from the private, voluntary and public sectors the freedom to innovate and find out what works best for different customers, enabling them to deliver a truly tailored approach.

We know that some customers on the Work Programme will be much closer to the labour market than others. To ensure that providers do not simply focus their efforts on the easiest to help, we have designed the payment structure to give providers greater rewards for supporting those with the greatest barriers to sustainable employment, including some of those claiming ESA. To put it simply, we will pay more to providers who work effectively with the hardest to help. That sum is considerable and can be nearly £14,000 in some cases.

Earlier this week, I sent out a schedule of that payment structure for ESA customers. I shall touch on some of those figures. As a reference point, for the jobseeker’s allowance customer group between the ages of 18 and 24, who we know should find work reasonably quickly, the maximum payment will be £3,800 as the contracts start. Within the model, there are now three categories of ESA customers. They are divided between those who are new recipients of ESA and those who have previously received incapacity benefits.

For those new ESA work-related activity group customers who have a short prognosis and are required to participate in the programme, we will pay up to £6,500 per person at the beginning of the contract. One can see the step up from the basic £3,800 being paid to the young JSA customers. For the ESA work-related activity group customers who volunteer for the programme—those receiving contributions-based ESA or with a long prognosis—we will pay up to £3,700 at the early part of the contract. We pay those customers less because, as they have volunteered for early access to the Work Programme, they are likely to be more receptive to support and therefore easier for providers to help than customers who are required to participate in the programme. There is also a financial structure behind this around how the DEL-AME switch works.

The final group are those who come off incapacity benefit on to ESA, and they will be paid up to £13,700 at the early stage of the contract. Our evidence suggests that these customers will be the hardest to help. Many of them will have spent many years receiving incapacity benefits before they move to ESA. The payments for the groups will change as the contracts develop, during which time we will introduce an incentive structure for some groups where a £1,000 incentive will kick in when the providers start to really perform.

The Work Programme is bigger than any previous employment programmes. It will serve a much wider range of customers, including those claiming ESA. Those customers who are self-employed or who have a contract of employment will be supported by Jobcentre Plus. All others will have the option of volunteering to participate in the Work Programme at any point after their work capability assessment. One of the key changes that these regulations would allow is to make participation in the Work Programme compulsory for those in the work-related activity group who have a short prognosis.

I am not going to address the work capability assessment at this stage. Perhaps noble Lords will want to raise it, although it has been debated in great depth recently. I suspect that the subject may have been aired well enough already.

We believe that, with the right support and encouragement, many more people can and should benefit from the opportunities presented by active engagement with the world of work. Undertaking carefully considered appropriate activity to improve job prospects represents a positive, realistic approach to avoiding long-term benefit dependence. I beg to move.

My Lords, I welcome these regulations. As the Minister said, they have been in train for some time. Progress on the process of helping people into work has been going on for several years now, so this is part of putting flesh on the bones of a project that clearly needs to be accelerated. As always when it comes to detail of this sort, it is the delivery that will cause the most anxiety in people who are trying to anticipate the conclusions that result from the implementation of these regulations. I would sum this up in an overarching phrase, that of fairness and even-handed treatment in the personalisation process about which my noble friend has spoken.

It is important to note that this marks a cultural change for Jobcentre Plus, particularly as regards how the staff have worked in the past. I approve of that because it is important to empower advisers so that they can make choices and decisions in order to be able to help people towards what will suit their individual circumstances. The consequence of that is that the advisers will have more flexibility that will enable them to treat people in different ways. That will be a considerable shift. Some months ago we observed that there was absolute direction from the centre to Jobcentre Plus offices. That resulted in different interpretations being made on, for instance, the number of job applications you could have before you were sanctioned. That was not envisaged by the Department for Work and Pensions and the Government. That largely came down to the strict top-down instructions being given. Now that we are offering freedom to Jobcentre Plus advisers, it is essential that they have the appropriate skills and training to be able to deal with the vast range of people coming before them. The questions of training and capacity are crucial. We know that the Department for Work and Pensions is not exempt from the overarching cuts that have to be made to budgets, so I wonder if my noble friend can assure me that these advisers, who are going to be so important in helping people get back into the workplace and thus productive in the British economy, will not be affected by the number of jobs available at the sharp end.

Personalisation, if we are going to take this perfectly appropriate approach, raises the spectre of a variation of views being offered to the same kind of people in different places. That is a consequence of offering freedoms. There are two counterbalances to that. The first is a lighter touch, but certainly some form of strategic approach set out in guidance from the centre to Jobcentre Plus advisers. Secondly, each Jobcentre Plus office should have some form of check and balance. People who feel that perhaps they have been treated unfairly should not have to go through a whole rigmarole, so advisers should themselves be subject to a check and balance to ensure that the decisions they take meet with the accord of their colleagues as well. In that light, words are very important. We have the word “appropriateness” to which I shall return later, and the term “good cause”, which covers a subjective decision but is important because it provides the flexibility needed when looking at a case that has been made by a customer which stands up and therefore needs to be tested. Clearly, if this is going to be left open to advisers, we must note that one person’s interpretation may be different from that of another. It is therefore important that a check and balance is available and that a sense of direction is given, but not in too heavy-handed a way that derives a distinct interpretation of good cause.

The personalised approach that these regulations give vent to will be more helpful if advisers themselves are able to access the full range of information about their customers. Why will the work capability assessments not be provided for the advisers? If they need to know about someone’s abilities and disabilities, something is already written down about it. Surely it would be more sensible to provide advisers with access to that information so that they can have a full picture before them when they speak to the customer. Only “some” discretion exists for this information being available to Jobcentre Plus advisers. Why will they not have that full level of knowledge, which one presumes will be available online anyway?

There are some lessons to be learnt from the processes—they have been going through very recently. Professor Harrington’s review pointed out that some considerable changes needed to be made to the way in which we handle customers. Those recommendations were accepted and are presumably being implemented as we speak. I should like an assurance from the Minister that those customers will be approached in the same way as customers who are carrying out their action plans for work assessments. I am anxious to ensure that no guidance is in any sense being misinterpreted or too literally taken. That is the test of getting it working.

I have a number of specific questions on the regulations. The regulations seem to say that there will be discretion for lone parents with children up to the age of 13, which seems to be the cut-off. Will that level of discretion be afforded to lone parents who have children between the ages of 13 and 16? I can think of two distinct examples. The first would be where a lone parent has a child who has some form of disability and needs to be at home when the child comes back from school. The second is the lone parent of a child who has come home from school. Despite their having told the child, “You are going to be on your own at home and you’d better look after yourself”, somebody complains to the school, and the school comes back to the Jobcentre Plus and says, “Why have you forced this lone parent not to be able to look after a child properly?” Discretion should be given in this area so that account can be taken of the fact that some lone parents of children between 13 and 16 need to be at home when their children get home.

The data provided with the regulations show a heavily weighted spread of people who will fall into this group in different parts of the United Kingdom. I come from Wales, which is likely to have the most people wanting help, and I wonder whether my noble friend could indicate whether the support given to advisers will be related to the number of cases that they are likely to take up.

I have two final points on the regulations. The first relates to review and evaluation. Professor Harrington’s work makes it clear that a continuing, rolling review of what has been done and whether objectives have been achieved is very important. This suite of regulations should not be exempt from that review either. Will the Minister consider extending the role of Professor Harrington to look at the impact of these assessments as well? The annexe to the impact assessment states:

“The evaluation is likely to include qualitative and quantitative approaches, alongside internal monitoring”.

I hope that the Minister will assure us today that the evaluation will, rather than is likely to, include some form of support for the regime of reviewing and making sure that it is absolutely correct.

Secondly, the Minister has just said that a big package of financial help will be provided for those who are furthest from the job market. He quoted the figures for the respective ESA groups: £3,700, £6,500 and £13,700. Those are large and sharp shoulders. In this discretionary and personalisation world in which we live, there are bound to be people who will fall just outside those boundaries on one side or the other. My noble friend referred to the issue of incentivisation payments: will they help to smooth out those shoulders? They are very steep steps and if you fall into one category it will be very difficult to get out over that shoulder.

My noble friend outlined particularly well the way in which these regulations will work but safeguards will be needed. The safeguard of reasonable behaviour by both the customer and the adviser is crucial. Will the advisers now have expert support, particularly when dealing with fluctuating conditions, mental health conditions and so on, in order that they can properly advise and be certain that that advice is of the best kind to meet the broad range of conditions they are likely to see?

In general, I am pleased to support these regulations as they appear.

My Lords, I, too, welcome this short debate about what the state now requires ESA claimants to do in order for them to receive the full benefits they are entitled to. If what happens on the ground is what we are told will happen in the regulations, in the Explanatory Memorandum and in the papers that my noble friend kindly sent us, then everything should go relatively smoothly and the results could be extremely encouraging and very welcome.

However, I fear that for many of us the elephant in the room is still the work capability assessment. I agree with my noble friend that this is not the place to discuss this because the regulations are about activity at least six months after the assessment will have taken place. However, the elephant is still there, lurking in the background, and I, too, look forward to Professor Harrington’s report on how the assessment deals with the two most difficult but commonest causes of people not being able to work—that is, mental health conditions and fluctuating conditions. I have been reminded this week about two fluctuating conditions which hardly get raised at all. They are both quite different from each other and make one realise how wide this field is: one is congenital heart disease, which is comparatively rare and completely hidden on the surface but can make someone feel fine one day and completely exhausted the next; and the other is Crohn’s disease and ulcerative colitis, where a person can be fine for a month or five years and then, without warning, have a severe flare-up which can make regular and demanding employment difficult. Incidentally, today is World IBD day—that is, inflammatory bowel disease day.

I was pleased to see in one of the documents that there is flexibility around the timing of a claimant undertaking work-related activity, which is extremely important. I was also pleased that the Minister in another place reassured our colleague, Stephen Lloyd, that decision-makers in Jobcentre Plus have the power to seek medical advice, if they need it, for people with particular conditions. This is extremely important because, as my noble friend Lord German said, decision-makers do not have access to the result of the work capability assessment. I assume this is for reasons of confidentiality, but it does seem perverse.

I endorse what my noble friend said about more training for JCP staff. I am pleased that they are being given more autonomy and flexibility and I am reassured that the Minister in the other place said that he was looking for ways in which the quality of training for JCP staff could be improved. This is an urgent matter if these new regulations are to be brought in very soon. Can my noble friend tell us which groups are advising him about this new and improved training and when the new guidance will be available?

To follow on from what my noble friend said on the culture at Jobcentre Plus offices, the attitude of personal advisers and decision-makers is as important as their knowledge of various conditions. A sympathetic adviser will do a great deal to reassure an anxious claimant who may be extremely fearful of trying to find work for the first time in a long while. What is the current role of disability benefit advisers in Jobcentre Plus offices? Do they have any specialised training in medical conditions? We heard some weeks ago that quite a lot of Jobcentre Plus offices are being closed, although it sounded as though the staff were being deployed elsewhere. Can my noble friend say a word about that?

Finally, one way to know if these regulations are working is that the number of appeals against a sanction will be low and the number of ESA claimants being helped into work will be high. I hope for a good result.

My Lords, I thank the Minister for his clear explanation of the regulations, and also for the helpful meeting that he convened last week, the input of officials and the follow-up information. That is a productive way to deal with the issues that emanate from regulations such as these. If there is a downside to that approach, having lots more information just gives scope for further inquiry and questions. I shall try to be brief on that front.

It will come as no surprise that we support the underlying philosophy reflected in these regulations. As the Minister said, they derive from legislation of the previous Government—the 2007 and 2009 Welfare Reform Acts. I believe that we have a consensus on the importance of work and the obligations of government to help those who can work get into work and those who are not yet ready for work to get closer to the labour market. There should be an obligation on individuals to engage with the support available and, with appropriate safeguards, sanctions for those who unreasonably refuse. That consensus also acknowledges that there are some for whom it is not reasonable to expect engagement.

As ever, the devil is in the detail, as the noble Lord, Lord German, said. As we have heard, this is the first time that the Government have activated provisions that can require ESA customers to undertake specific work-related activity. For this to work, clearly it is important that the correct judgments emanate from the work capability assessment. As several noble Lords have recognised already, that has recently been the subject of considerable debate in your Lordships’ House. The appropriateness of the descriptors and the capacity of Atos remain issues. As with other noble Lords, such as the noble Lord, Lord German, and the noble Baroness, Lady Thomas, we await further developments on Professor Harrington’s work.

What is now required from the WCA is not only to advise on whether an individual is capable of work and therefore directed to JSA, or has limited capability for work-related activity and enters the support group, or has limited capability for work, but also, in the latter case, to make some judgment about how long it will be before the individual can be expected to be fit for work. Is this correct? In a sense, this is a new development. It is important because, as we have heard, those expected to be fit for work within six months will be required to access the support provided by the Work Programme rather than be able to volunteer for it or, presumably, potentially be subject to mandated work-related activity by JCP advisers. Is not the emphasis on the timescales adding another dimension to the challenges of the WCA, especially for those with mental health conditions, fluctuating conditions, autism et cetera?

Can the Minister say how the health professional at the WCA stage will be able to make an authoritative assessment of when an individual to be assigned to the work-related activity group will be fit for work in the absence, possibly, of knowledge of the sorts of work-related activity which are available to the individual? Can the Minister confirm—I think that this came from our meeting—that anyone assessed as being on ESA but with a prognosis of being fit for work in, say, six months will have to be reassessed through the WCA before the designation is changed?

Does not the designation of when someone is likely to be fit for work have a significant implication for providers? Someone going on the Work Programme from an ESA flow deemed likely to be fit for work within three months attracts a potential fee which is nearly double that of someone in broadly similar circumstances but who might be deemed fit for work in, say, six months. Is this right? The argument that the Minister advanced is that the difference is that somebody volunteers. But the judgment that seems to be made is that if somebody from an ESA flow is on a work-related activity group and likely to be fit for work within three months, that attracts something like double the fee to the provider of somebody who is broadly in the same circumstances but who will not be fit for work for a longer period, simply on the basis that they have volunteered for the programme. That second category of person could be argued to be a harder to reach person, yet attracts a smaller fee for the provider.

Obviously, someone deemed fit for work would move to the JSA regime and be subject to wider conditionality—for example, jobsearch. But for the purposes of the payment arrangements under the Work Programme, do they keep the status that they had when first referred to the programme? If so, the WCA assessment would have a particular significance for providers.

Incidentally I note that ESA self-employed customers—presumably, previously self employed—will not have access to the Work Programme. Why is this? The details of payment arrangements provided by the Minister under the Work Programme certainly demonstrate strong financial incentives for some groups, but could we be told the projected annual numbers for the first three years for the following ESA groups—on the ESA flow, those likely to be fit for work within three months, and the ex-IB likely to be fit for work within three months?

As the noble Baroness, Lady Thomas, and the noble Lord, Lord German, have said, the Merits Committee raised concerns over the capacity and training, which I share. The Minister touched on that in his presentation of these regulations. It is clearly of very great significance. The existence and application of sanctions has been the subject of considerable debate both during the passage of the legislation and since. We support the necessity of sanction arrangements as a means of ensuring compliance, provided they have due regard to good cause for non-compliance and are sensitive to the circumstances of vulnerable people. We support the Government in concluding that it will be JCP decision-makers who will make decisions about sanctions, not providers. But perhaps the Minister can clarify for us the policy in relation to vulnerable customers and where responsibility lies.

My understanding is that before any sanction could be levied on customers with a mental health condition, a learning disability or a condition affecting communication and cognitive skills, some personal contact should be made, if necessary a home visit. I detect some weakening of this, certainly in the response given by the Minister of State in the other place when these regulations were debated. What is the current policy? Where will responsibility fall between the provider and Jobcentre Plus? What contact will be made by the provider before referral for a sanction and what contact after but before a determination? Is there clarity on this in the contractual arrangements? What monitoring arrangements will be in place? Can the Minister take the opportunity categorically to confirm that there are no targets operated by Jobcentre Plus relating to numbers to be sanctioned, whether for ESA, JSA or any other benefit?

It is noted that the right of lone parents to restrict availability for work-related activity when there are children between the ages of 13 and 16 is to be considered on a case-by-case basis; again, the noble Lord, Lord German, touched upon this point. This consideration is to take account of the individual needs of the child and, among other things, their ability to remain unsupervised. What on earth sort of guidance is to be given to help with this consideration?

We have touched on the Work Programme a little in so far as it is relevant to ESA and work-related activity. I hope that we will have the opportunity for a fuller debate because it is an ambitious project that we want to see succeed. The flexibility of the black box approach and individually tailored support are to be welcomed. Strong financial incentives for helping the hardest hit to get to the labour market is obviously the right approach. Before we have this debate, though, perhaps the Minister can explain why the ex-IB work-related activity group who are unlikely to be fit for work within three months should have treble the potential reward for the providers than ESA customers who are further from the labour market. Will the Minister say a little more about why the Work Programme negates the need for the work-focused health-related assessment?

I look forward to the Minister’s reply on this and other matters, but these regulations are an important step forward and they have our support.

My Lords, I thank all noble Lords who have taken part for the support for the general principle of what we are trying to do here. This is a component of a very large change, with quite a few moving parts. I note the accusation of the noble Baroness, Lady Thomas, that the only person who has all the moving parts in their head is me. We are slowly getting it out, and this is one element of that process. As I said at the start, those people who are disabled and cannot work will get unconditional support, but we have an obligation to support large numbers of people who could get into the labour market. Many disabled people are in the labour market—not enough, but I think that the figure is around 40 per cent of those who are disabled.

The noble Lord, Lord McKenzie, is very fond of quoting my work, which always makes me blush with embarrassed pride. I also said in the report to which he referred that if the Government do not engage with these people, it is a dereliction of duty. One of the things that we are trying to tackle here is to stop that dereliction and help these people get back to work. I emphasise that what we are talking about is not getting people to work and sanctioning them for not working; this is about work-related activity. We are talking not about the intensive requirements of taking a job but about preparing for that process.

I shall try to deal with the enormous number of questions. I am not sure that I will be able to answer all of them, just because of time and volume. One of the issues that noble Lords have raised is training. The training that we offer will provide much greater emphasis on the need for personalisation and flexibility, which my noble friends Lord German and Lady Thomas were concerned about. There are new demands on staff to do with flexibility. We will provide the products and tools to support the front line in diagnosing customer need precisely. As to decision-maker expertise and who takes these decisions, staff receive extensive training so that they are able to make decisions. They have access to comprehensive, up-to-date, clear procedures and guidance for ESA decision-making, which includes how to handle difficult situations and provide customer care. The delivery of that learning is supported by Atos Healthcare.

My noble friend Lord German was concerned about how good cause would be defined. If it is too specific, it would restrict the ability of decision-makers to take into account the circumstances of individuals. However, examples of good cause include such things as caring responsibilities, attendance at court or at funerals, acute personal illness, and the availability and affordability of childcare. My noble friend raised a specific point about the parents of schoolchildren when they go through the 13-year barrier. The power to set the activity must be reasonable in the circumstances of each customer. The adviser will need to consider all the circumstances of lone parents with children aged between 13 and 16 before requiring work-related activity after school.

The other key issue that my noble friend Lord German raised was that of checks and balances before any sanctioning. I remind noble Lords that the sanctioning regime here is not the tougher one that we are talking about with JSA. It is a sanctioning regime that says that some of claimants’ money will be reduced until they comply. It is a very different and much softer sanctions regime generally. Within the legal framework the adviser must reconsider the action plan at the request of the customer, if the customer feels that it is no longer appropriate. The adviser may then postpone the work-related activity that had been agreed. Clearly, when we talk about fluctuating conditions, this is exactly the kind of area where they apply.

Differential pricing was raised by both my noble friend and the noble Lord, Lord McKenzie. I am almost reluctant to get into the detail of this; the reasons why particular groups have different prices are very detailed. The blunt answer is that we have never priced people precisely. It has not been done. We have created some categories and we will learn, as the process rolls through, how those prices really work. We had to start somewhere. We had to get some broad categories that were definable, and which we could record and analyse to get this differentiation. It is clear that it would be very tough in many cases to get the people who have been on incapacity benefit for a long time and then moved into the ESA category into work. For some it would be easier but for many it would be tougher. By and large, we have aimed to achieve price differentiation which reflects reality. I expect that that system will become much more sophisticated as it moves along. I am hopeful that we can start to apply differential pricing to groups of people who we know fall into difficult categories, and that this will help us to tackle the most difficult problems. People coming out of prison is an area where I would like to see funding focused to address the problems involved.

We can debate exact pricing all day long but another factor is involved, as noble Lords will be well aware. The DEL-AME switch, on which this process is based, is acutely complex. It is a pretty simple thing to describe in theory but I do not encourage any of your Lordships to negotiate it in detail with the DWP and the Treasury. It is a very complicated matter, which it would be counterproductive to describe in detail.

The noble Lord, Lord McKenzie, asked a specific question about reassessment. I assure him that after the prognosis of three months or six months is made, another work capability assessment is undertaken before someone moves into the JSA category. The category in which you enter the programme is the one in which you stay. In other words, the providers have every incentive to move someone through the whole process.

I understand what the noble Lord has said about the category in which you end up. I accept that the evidence base is being built, but to a certain extent it is determined by clear objective factors such as whether you have been on IB or are on ESA, but also by the prognosis that the health professional has made at the WCA, which is much more subjective. A lot could hang on that decision—for example, whether the relevant period is three months or a bit longer. What is our experience of the ability of healthcare professionals to make those fine judgments?

The noble Lord makes a very interesting and valid point. We have spent a lot of time on this. Health professionals find it very difficult to make accurate prognoses for periods lasting many months. One of the reasons why we have the three and six-month periods is because the prognosis in those cases is much better and much more reliable. Rather than handing everyone in the work-related activity group over to the providers we thought that we would de-risk the situation by having three and six-month periods. We spent a lot of time wrestling with that point as we devised the groups that were going to go into the Work Programme.

I will write to the noble Lord on his question about the flows as I do not have the relevant figures to hand. My noble friend Lady Thomas asked about the closure of some JCP offices. We are planning to offer all affected staff relocation. Many questions were asked but I hope that I have covered all the key ones. If I find that I have not, I will write to noble Lords.

Let me close by saying I am convinced that this is the right way forward. I mirror what my noble friend Lady Thomas said: get this right and there is a huge prize here. I think, genuinely, that we will do this right—and we will watch it. I was asked about assessment and evaluation by the noble Lord, Lord German. We have a pretty elaborate evaluation program running. We will get that evaluation in two waves, the first this autumn and the second in early 2012. We will look at seeing exactly how this customer experience works in some detail, so we will get some flavour of that pretty soon. I have no doubt that we will be debating it at that stage, which will be quite interesting. I commend these regulations to the House.

Motion agreed.