Monday, 16 January 2012.
Arrangement of Business
My Lords, before the first Motion is considered, I remind noble Lords that, in respect of each item of business today, the Motion before the Committee will be that the Committee do consider the statutory instrument in question. The Motion to approve the instruments will subsequently be moved in the Chamber in the normal way. I also remind noble Lords that, if there is a Division in the Chamber, we will break immediately for 10 minutes.
Jobseeker’s Allowance (Jobseeking and Work for Your Benefit) (Amendment and Revocation) Regulations 2012
Considered in Grand Committee
That the Grand Committee do report to the House that it has considered the Jobseeker’s Allowance (Jobseeking and Work for Your Benefit) (Amendment and Revocation) Regulations 2012.
Relevant document: 34th report from the Joint Committee on Statutory Instruments.
My Lords, I must start with the formalities: it is a requirement that I confirm for the Grand Committee that I consider that these provisions are compatible with the European Convention on Human Rights, and I am happy so to confirm.
The Department for Work and Pensions is fully committed to supporting the Government’s commitments to the rehabilitation of prison leavers. Our main aim in the cross-government work to reduce reoffending is to increase employment outcomes for ex-offenders and prison leavers. We will do this by using the work programme—the biggest single payment-by-results welfare-to-work programme that this country has ever seen—as the primary vehicle for help and support.
We recognise that offenders face significant barriers to employment. The Government believe that there is a strong social and economic case to provide additional employment support at the earliest point to individuals who leave prison without employment. Most prison leavers have much greater difficulty in finding and retaining work than unemployed people with no criminal conviction. This can be due to a number of factors, including: employer prejudice against people with a criminal conviction; problems with accommodation; high prevalence of health conditions—especially mental health; motivation; and low educational and skills achievements. These factors all contribute to high rates of unemployment among prison leavers, which in turn increases social exclusion and has a detrimental effect on other issues, including reoffending levels and long-term benefit dependency.
That is why the Deputy Prime Minister announced on 16 August last year the Government’s intention to bring forward the work programme entry point for prison leavers to immediately on release from custody for those claiming jobseeker’s allowance. Currently, offenders are mandated on to the work programme after nine or 12 months on jobseeker’s allowance, depending on their age, although they are able to volunteer for the programme early—after three months. From March, all prison leavers who make a claim for jobseeker’s allowance can be mandated on to the work programme immediately on release from prison.
The regulation changes will provide the legal framework to allow prison leavers to be mandated on to the work programme immediately on release. This will give them the appropriate support at the point that they need it most, by taking those referred to the work programme out of the coverage of the “treated as available and actively seeking employment” provisions in the Jobseeker’s Allowance Regulations 1996. The “treated as” provisions excuse the prison leaver from having to be available for or actively seeking work for the first seven days without this impacting on the prison leaver’s eligibility for jobseeker’s allowance.
Under current legislation, the earliest that prison leavers can be mandated to participate in the work programme is the eighth day after leaving custody. During the first seven days, when the prison leaver is treated as available and actively seeking work, the prison leaver cannot be attached to the work programme. Regulation 2 removes this seven-day period for those who have been given notice to participate in the work programme. The Jobseeker’s Allowance (Employment, Skills and Enterprise Scheme) Regulations 2011 provide the legislative framework necessary to mandate JSA claimants to participate in the work programme. Those who have not been given notice to participate in the work programme will still be provided with a seven-day period under the Jobseeker’s Allowance Regulations 1996. As an example, those prison leavers who are aged 16 and 17 and claim jobseeker’s allowance under special circumstances will not be mandated on to the work programme immediately on release.
To ensure that prison leavers who are attached to the work programme will still benefit from the seven-day period, where they are treated as being available and actively seeking employment, Regulation 3 of these draft regulations amends Regulation 5A of the Jobseeker’s Allowance (Employment, Skills and Enterprise Scheme) Regulations 2011. This means that prison leavers will benefit from the support provided by the work programme provided immediately on release, but will still be excused from having to be available for or actively seeking work for the first seven days from release without this affecting their eligibility for jobseeker’s allowance. We fully recognise that prison leavers will need to settle back into the community and re-establish their basic needs, including accommodation.
I would expect that during the first week after leaving prison, the primary focus of the work programme provider will be to support those activities that will provide a secure base from which later work preparation and job search activities can ensue. This would not, however, stop the work programme provider and the prison leaver working directly on employment issues straightaway if they both thought it appropriate.
I am happy to say that, in order to facilitate this change and mandate prison leavers on to the work programme, we are proposing that the Jobcentre Plus adviser would take the claim for jobseeker’s allowance in prison to start entitlement immediately on release, allowing mandatory referral to the work programme. Jobcentre Plus will only discuss claims for jobseeker’s allowance with prisoners on a voluntary basis, as at present. There will be no mandatory interviews with prisoners.
Where a prisoner opts not to make a jobseeker’s allowance claim while in prison and subsequently turns up at the job centre office within 13 weeks of leaving prison, then they will be mandated to the work programme from their date of claim. This change will essentially bring forward the activity that Jobcentre Plus currently conducts at the new jobseeker’s interview following release. The claim will be put in hand to be triggered immediately on release. This will help to contribute to putting prison leavers on to a sounder financial footing, enabling them to resettle more quickly, concentrate on finding a job and reduce their chances of reoffending.
In introducing this additional support for prison leavers through the work programme, we are working closely with other government departments, in particular the Ministry of Justice and its executive agency, the National Offender Management Service. We also have the support of the Scottish Prison Service. The support and co-operation of these partner organisations will be crucial in our efforts to implement this help and support our Jobcentre staff working in prisons.
To this end, we currently have around 140 Jobcentre Plus advisers in all prisons that require their service. Their work focuses on prisoners’ needs, both upon induction and in pre-release from prison. Jobcentre Plus advisers work alongside the Prison Service and other organisations providing support to offenders in prison. Taking jobseeker’s allowance claims from prison leavers who voluntarily opt to obtain the benefit will be an extension of their current work in the prison.
I would like to cover briefly the other element of these regulatory changes. The previous administration introduced the Jobseeker’s Allowance (Work for Your Benefit Pilot Scheme) Regulations 2010 to provide a legal framework for a pilot in certain Jobcentre Plus districts. These regulations allowed the Secretary of State to select claimants in specified pilot areas for participation in the work-for-your-benefit scheme if they met certain conditions. They also provided for the loss or reduction of benefit if persons selected failed to participate without good cause. The regulations came into force on 22 November 2010 and are due to lapse on 21 November 2013. The Minister for Employment’s Statement to the Commons on 19 November 2010, which I laid before this House on 22 November 2010, confirmed that this scheme would not go ahead. As a result of this decision, no jobseeker’s allowance claimants were selected for participation in the scheme. The Minister for Employment had previously made it clear that the work-for-your-benefit pilot scheme would not proceed and that the regulations for the scheme would be revoked when the opportunity arose. Regulation 4 revokes the Jobseeker’s Allowance (Work for Your Benefit Pilot Scheme) Regulations 2010. I beg to move.
My Lords, I thank the Minister for his explanation of this order, which has our support. Enabling prison leavers to be referred to the work programme immediately upon release, rather than at the earliest after seven days, is to be welcomed. As the Explanatory Memorandum recites, those in employment are much less likely to reoffend, and the importance of this first week is acknowledged even though, as the Minister said, the focus will be on reintegration and securing a base rather than work preparation and job search. From the Explanatory Memorandum, it also appears that the JSA claim process will be conducted in prison so that entitlement can begin on release. Again, the Minister covered that. It is proposed to make use of the provisions of what I think is now Clause 96(2)(1) of the Welfare Reform Bill. What will the position be in the interim before the Clause 96 provisions can be brought into effect? What payment will be due to individuals between release and the otherwise first payment date?
The Minister might be relieved to know that I do not propose to reiterate the detailed inquiry about the work programme which was taken up in the other place. However, when is it expected that the Government will be releasing comprehensive data on its operation, about referral levels, categories, outcomes, cost et cetera? It would be helpful if the Minister would say a little more about the process of these additional referral opportunities. Will this become the main approach for those leaving prison? I note from the Explanatory Memorandum and the Minister’s confirmation that 16 and 17 year-olds will not be referred by this process. Will he say a little more about why? How many prison leavers have been referred to the work programme at day eight to date—from what the Minister said, it may be that the answer is nil—and certainly within 13 weeks of their claim? We understand that there is going to be a new category in the work programme. I am not sure whether it is just for those day one referrals rather than perhaps day eight referrals, week 13 referrals or any others.
In particular, will the Minister confirm that this will not be an automatic process that will squeeze out other programmes? I am sure that, if he were in his place, the noble Lord, Lord Ramsbotham, would talk about some of the programmes of which he is aware. I certainly remember sessions where we had presentations—I think that the Forestry Commission was engaged in employing people even before release from prison. These were imaginative programmes that really made a difference to people, and I would not wish to see these opportunities trump them and squeeze them out.
Subject to any points arising from those questions, we support the order and wish the Government well with this initiative.
I add to the welcome that the noble Lord, Lord McKenzie, has rightly given to these regulations.
I am particularly interested in this aspect of the work programme because I am a non-executive director of the Wise Group in Glasgow, which has for some years been running a programme called “Roots Out of Prison” that has been extraordinarily successful. The Minister rightly pointed to the fact that other aspects of the public service and the voluntary sector need to help if these projects and this work are to be successful. The Scottish Prison Service was exemplary in the way that it encouraged Wise Group employees, who were reformed former convicts who had been trained by the Wise Group, who went into Barlinnie prison in the first iteration of the project. Inside the prison, those Wise Group employees, working on a voluntary basis, engaged in capturing the interest of some people who were about to be released. I was not aware that the jobseeker’s allowance regulations made that first seven-day period a bit of a difficulty—I do not know how they got round that—but all that I can say is that it was a splendid project that worked to everybody’s benefit.
As the Minister or someone else said, the first seven days are crucial. The people who are waiting to meet disaffected offenders, particularly young offenders who may have completed their first sentence, when they come out of the door at 7 on a Thursday morning, are usually the drug dealers. The drug dealers know that that is when the prisoners are let out, and they say, “Come with me to the pub and I’ll help you”. Then of course the prison leaver is back into a cycle of recidivism. Somebody should be there to welcome the prison leaver and take them somewhere, or talk to them before they come out about their housing benefit and getting accommodation. Local authorities could help some of these ex-convicts to find places where they can immediately go to live. Then the whole system would be more positively pointed at people who are in a very vulnerable set of circumstances.
I have seen for myself what can be done. I was not aware that this was to be a new thread in the work programme, but I would certainly encourage my noble friend to invest some of his well-known, indefatigable energy into these things because I know that he is genuinely interested in them. This area of work has a huge amount of potential. Independent providers and other people such as the Wise Group have thought of this. The Wise Group could not have done this without the Scottish Prison Service’s positive enthusiasm and encouragement for the proposal. There are models available that demonstrate success. I am delighted that the Government have decided to take this administrative step to remove the barrier so as to make these projects easier to function and roll out in the future. The more that we can get into the prisons and make advance claims, the better.
I am delighted to hear that Clause 96(2) of the Welfare Reform Bill, which we will soon debate on Report in your Lordships' House, will be an additional way of expediting this proposal. It is a thoroughly good thing and I am delighted that the Government have seen the opportunity. Knowing him as I do, I am sure that my noble friend will take every advantage to get the most out of these opportunities in the future and I wish him every success in so doing. I support the regulations.
Well my Lords, it is very nice to have that support, and I am looking forward to lots more of it. There were a range of questions and I will try to deal with as many as I can. Where I cannot, I will of course write.
Picking up points from the noble Lord, Lord McKenzie, I think that he catches me, as he always does, on a technicality around Clause 96. We were looking to use Clause 96 in this way but, having looked at it again in legal terms, we have concluded that it is not necessary to rely on that particular amendment and that this regulation is adequate. Therefore, we do not have the timetabling issues that he was concerned about.
I have to disappoint on the numbers. We simply do not have the information on how many prisoners have been referred to the work programme to date. We will start to collect that information, clearly, when this programme comes into effect.
On the question of when more general data on the work programme are coming out, we are planning now to provide a level of information on the attachments and referrals to the work programme next month, although because of the back-ended way that payments are made, the figures on actual job outcomes will probably not come out until the autumn.
The reason that 16 and 17 year-olds are not referred is that the work programme is available to those from age 18 and over—that is just how it is structured. One of the things that the noble Lord, Lord Kirkwood, was urging was to look at ways of using this in an expanded way, as it is only for JSA whereas there is also ESA for youngsters. Clearly, if this starts to work I will certainly be looking very closely at the other areas where we can expand it.
On the question of squeezing out other programmes, we would expect the work programme providers to work with other local initiatives, especially when they have established a track record. The noble Lord, Lord Kirkwood, talked about the experience of the Wise Group, which would clearly be very valuable. The Ministry of Justice has a range of pilots going on at the moment, experimenting in this area using social impact bonds—in Peterborough there is a rehabilitation payment and in Doncaster there is a justice reinvestment pilot. There are also community pilots. There is an enormous level of activity going on in this area, for the obvious reason that it is one where we need to make a lot of improvements.
I can confirm that the programme is entirely voluntary and that those who want to claim—both those who claim in prison and those who claim up to 13 weeks after release—are all in that same group of payment by results. This is a new category and we are looking to negotiate the terms and to get that new category with the work programme providers. The total amount of earnings that providers can make for a successful placement is £5,600 for an extended period. We all understand the structure of the work programme.
I think that I have covered all of the questions—
Indeed, the Minister has, and that has been very helpful, but I want to clarify a couple of points. I think he said that the programme is voluntary. Is it voluntary whether or not somebody claims JSA? It would be voluntary because if there are other programmes associated with prisons going on, such as the one that the noble Lord, Lord Kirkwood, instanced, the referrals or the route to go via the work programme would not preclude those continuing. Where does the decision-making lie in respect of that? Is it for the individual as to which programme they attach themselves to or seek to get the benefit of, or is it the decision-makers at Jobcentre Plus—the providers? How does that all work? Although this clearly has great potential, it would be a pity if it squeezed out those good examples that already exist.
My Lords, to be blunt, it is voluntary to make the claim for JSA in prison, then once you do that as a prisoner there is immediate mandation. To the extent that voluntary charitable endeavours have been doing this with their own funding, this will displace some of that. However, I think that those who are experienced at this work will find a way to continue and to start earning money. This is stopping being a charitable endeavour now and becoming something that the state is willing to pay for, so I expect some readjustment of who does what. Clearly, there always will be that, but I would expect people who are experienced and have a track record in this area to be very well placed to continue to do it.
The transition from prison to the community is a key transition point in the journey from crime to resettlement. We have a much too large benefits bill in this country and prison leavers are significantly more likely than the average person to claim those benefits, so it is essential to put in the work and support required to get them back into the workplace so that they can start to pay their own way in society. The figures suggest that those individuals who are in employment are between one-third and one-half less likely to reoffend, so we could make a real difference by providing help not just to those individuals but also to society as a whole.
I started off wholeheartedly supporting this but now my support is slightly qualified, as, I expect, is the support of the noble Lord, Lord Kirkwood, in relation to the Minister's response on the issue of mandation. I can see that it is voluntary whether someone claims JSA or not, but if you have no other source of income, that is not a particularly helpful designation. Once you do, you have the inevitable route in the work programme and there may be a chance of existing providers being wrapped up in that but there is no certainty. That seems to be a great pity if it risks destroying the experience of good programmes that are out there. I accept that that is not universal and I accept that they may be driven in large measure by charitable organisations but there is real work involved. I enter my qualification without necessarily withdrawing support for the regulations.
There is a genuine dilemma when you go from a cottage industry, where there are individual examples of really excellent work, to trying to provide a universal, lock-down service to everyone in the category. I do not want to sugar-coat this—it is very easy to over-sugar-coat—as I think there are going to be changes in the provision here, and there may be some groups that have been in very good individual work that does not translate into the universal service that we are aiming for. I think there is every opportunity and every incentive for those who have been affected to remain in this part of the provision. Rather than worrying about individual groups and their position, it is much more important to deal with what is a running sore and a long-term tragedy of not looking after these people properly. That is what this is doing and I hope that most of the good provision is wrapped in, but clearly that cannot be guaranteed. I think this is vital and I hope that it is the smallest of cavils from the noble Lord, Lord McKenzie, but you cannot change things without changing things—tautology is very useful sometimes.
With those words, I commend the regulations to the Committee.
Commission for Architecture and the Built Environment (Dissolution) Order 2012
Considered in Grand Committee
My Lords, in 2005 Parliament passed the Clean Neighbourhoods and Environment Act. The Act turned the Commission for Architecture and the Built Environment, an arm’s-length body of the Department for Culture, Media and Sport, into a statutory corporation. The commission, or CABE as it is more commonly known, was originally created in 1999 to replace the Royal Fine Art Commission as England’s champion for promoting high standards in architecture and urban design. Part 8 of the Clean Neighbourhoods and Environment Act also provided that CABE could be dissolved by affirmative order, and it is an order under those provisions that we are considering today.
The order provides for the dissolution of CABE. It transfers the remaining property, rights and liabilities of CABE immediately before the date of dissolution to the Secretary of State for Culture, Olympics, Media and Sport. The order also makes provision for the final report and accounts for CABE, and contains consequential repeals and revocations.
The dissolution of CABE is an outcome of the comprehensive spending review of October 2010. While we recognised the important role that CABE has played in promoting well designed buildings and public spaces, we judged that the most pressing need was to protect and maintain other parts of our culture and heritage. As a result, we reluctantly decided to withdraw CABE’s DCMS funding after 2011-12. CABE was jointly funded by the Department for Communities and Local Government and, in the light of DCMS’s decision, DCLG indicated that its funding for CABE would cease after 2010-11. Therefore, CABE was unable to continue as a public body, and a controlled closure was implemented. The majority of CABE’s operations ceased with effect from 31 March 2011 and it was mostly wound up by 30 September 2011, when its remaining staff and commissioners left.
Some of CABE’s activities, principally design review, are now being carried out by the Design Council CABE, a subsidiary of the Design Council. This is being funded initially by a DCLG grant of £2.75 million a year for two financial years 2011-13. As a result, on 1 April 2011, 19 CABE staff transferred to the Design Council under the Transfer of Undertakings (Protection of Employment) Regulations.
In addition, on 30 September 2011, Engaging Places, the built environment education programme that CABE ran with English Heritage, was transferred to the architecture centre Open City Architecture, together with one full-time permanent member of staff and a one-off grant of £100,000 from DCMS.
CABE did excellent and valuable work for DCMS in the past; the decision to withdraw funding was not taken lightly and should not in any way be taken as a criticism of CABE's performance. Indeed, I would like to pay tribute to CABE’s work; it helped to raise the standards of design in housing, health and infrastructure buildings, schools, town centres and public spaces across England. Since 1999, CABE reviewed the design of over 3,000 of the most significant development proposals to come forward during a period of architectural renaissance in England. I am happy to say that the records of these are now preserved at the National Archives, providing a fascinating snapshot of major schemes in the first 10 years of the new millennium.
In this year of the London Olympics and Paralympics, it is worth recalling CABE’s role in helping the Olympic Delivery Authority to make certain that good design and value for money were at the heart of the project. CABE ran a special London 2012 design review panel and contributed to the design development of 26 schemes and the Olympic Park. The Olympic Delivery Authority believes that CABE’s advice was vital in making sure design quality was delivered.
Although the department would have liked to continue to fund CABE’s work in driving up the quality of design in the built environment, in the present financial situation it seemed more important to protect the wider culture and heritage sectors. Hence the dissolution order before us today. I beg to move.
My Lords, I thank the Minister for that explanation.
The future of CABE has been the subject of some controversy since the coalition Government came to power and I, for one, very much regretted its demise. At the time, it felt like it was just too easy for Jeremy Hunt to offer it up for sacrifice in the first round of spending cuts without really appreciating the arguments as to why advice and guidance on architectural standards and living space was so necessary both for the industry and consumers of design. I am very well aware that CABE’s work and advice were not universally popular, but this is not surprising in an area such as architecture, which is notoriously controversial. However, I believe that, overall, CABE’s legacy is an overwhelmingly positive contribution to design standards in this country.
I talked about CABE’s demise, to which the Minister also referred, but of course part of CABE’s function has now been rescued by the merger with the Design Council, which, in the circumstances, I accept was the best that could be achieved. As I understand it, the merger has effectively already taken place, so the order is, in effect, a tidying-up exercise. However, what is not clear to me—perhaps the Minister could clarify this—is why the assets and functions are being transferred back to the department rather than to the Design Council. What is the legal status of the merger with the Design Council? Is a separate order being prepared that will set out the new role for the Design Council in embracing some of CABE’s functions?
A cynic might suggest that the drafting of the order delivers the complete abolition of CABE with no future legal requirement on the Government to facilitate architectural advice and standards, whereas I had understood that the settlement—a more constructive merger with the Design Council—would maintain those functions at a national level. Also, as the order stands, it would be open to the Minister to cease funding the CABE activities that will now take place within the Design Council without any further reference to Parliament. Is that what is intended? Perhaps the Minister could shed some more light on the processes taking place here.
As the Minister mentioned, if there is one thing that we have already learnt from the Olympics, it is that the UK has some of the finest designers in the world and we know how to create iconic and stunning designs that are also practical and sustainable. Unfortunately, our record on housing design is rather more woeful. The new proposed planning framework is understandably causing consternation that more poor-quality estates that clash with the local environment will spring up, against the wishes of local communities. Surely this is where an organisation such as CABE, even under its new arrangements, could help by working with local authorities and communities to help them to understand the advantages of quality, well built homes, effective landscaping and attractive use of space. Can the Minister confirm that this is the type of role envisaged for the Design Council in the future, that it will be written into its terms of reference and that adequate funding will be provided to ensure that this can be carried out?
I look forward to hearing the Minister’s response on these issues and, on the assumption of a positive response, we will support the order.
My Lords, I thank the noble Baroness, Lady Jones, for her contribution and for her questions. I quite understand that she regretted the demise of CABE, whose contribution she respected, as we all did.
On where CABE’s responsibilities lie, some of them now lie with the Design Council and some lie with DCMS. They have been distributed, as I think it says in the order.
On the merger with the Design Council, it is very important that the two elements of the leading bodies come together so that local communities are given greater opportunities to have their say on these areas and on the look and feel for the future. The Design Council has been strengthened by bringing in the valuable skills, knowledge and expertise from CABE to create a one-stop shop that will provide a service to industry, councils and local communities. Without the prospect of further funding for CABE from other sources, the remainder of CABE had to be wound up and the organisation dissolved and any remaining property, rights, including those relating to employees, and functions are to be transferred to the Secretary of State. The general proposal was agreed in principle by Ministers in all three departments affected, and the legal status for the dissolution of CABE was agreed in Cabinet in February 2011.
On the transfer of CABE’s statutory functions, while the Clean Neighbourhoods and Environment Act allows for the transfer of CABE’s statutory functions to another organisation, we decided that this was not necessary or appropriate. However the royal charter of the Design Council has been amended to incorporate functions similar to CABE’s. This allows the Government to provide funding under the authority of the Clean Neighbourhoods and Environment Act to the Design Council for carrying out similar activities to those carried out by CABE.
The noble Baroness asked about CABE’s legal status. That has already been taken care of by amending the Design Council's royal charter and the transfer of undertakings and agreements between CABE and the Design Council. The assets and liabilities will remain with the DCMS and the rest have already been transferred to the Design Council.
Despite DCMS's difficulty with the spending review decision, architectural design remains an important priority for the Government, as the noble Baroness said. Part of CABE lives on in the Design Council and Spaceshaper and Engaging Places were found new homes. Above all, the draft planning policy framework demonstrates that the Government attach great importance to the design of the built environment. Our objective for the planning system is to promote good design that makes attractive any usable and durable places, which is a key element in achieving sustainable development. In addition, both the construction strategy and the housing strategy reflect the importance that the Government place on the role of good design. If I have missed any points, I will of course be in touch with the noble Baroness.
I want to put on record my particular regard for CABE. I saw at first hand how it made a tremendous impact on the quality of architecture, design and open space in Liverpool. The sense of realism and dedication ended in developments that were at the cutting edge.
Although I am delighted that to some extent the work will continue in the Design Council, my great concern, which the Minister has allayed to some extent, is that we do not want to live in a society where our surroundings and architecture are of poor quality. We do not want the bog standard. We want our design and architecture to be cutting-edge. I am sure that that will continue.
I do not know the details, but one of the other areas of CABE’s work with which I was terribly impressed was how it was able to work with English Heritage. That partnership of heritage and architectural environment was hugely important. It was good to see those two bodies coming closer together. I hope that that is also something that we are aware of.
My Lords, I am most grateful to my noble friend Lord Storey for speaking on this order. I could not agree with him more that we do not want to see poor quality architecture. I know that developments that have happened in Liverpool such as Tate Modern and others have been of a really high standard and very exciting.
The noble Lord raised another point regarding CABE and English Heritage. It was decided that merging CABE with a heritage body was not appropriate because CABE’s impact rested on its wide freedom to offer independent advice and support directly to third parties. Merging it with a body that has statutory responsibility for protecting the historic environment would have compromised that. I hope that the noble Lord understands that. He was right to mention the importance of CABE in the quality of the work done.
European Union (Definition of Treaties) (Republic of Korea Free Trade Agreement) Order 2012
Considered in Grand Committee
My Lords, increasing trade and investment is essential for generating strong, substantial and balanced growth. The United Kingdom has been influential in making sure that trade liberalisation is central to the European Union’s growth strategy. In the absence of a multilateral deal, free trade agreements are the main vehicle for doing this. The European Union is pursuing an ambitious range of free trade agreements across the globe and the European Union’s South Korea Free Trade Agreement is the most ambitious trade agreement ever concluded by the European Union. It will be good for Europe and good for Britain, boosting the United Kingdom’s economy by an estimated £500 million pounds a year.
South Korea is the European Union’s fourth largest export market outside Europe, despite the high barriers to trade: industrial tariffs averaged 6.6 per cent, agricultural tariffs averaged 48.5 per cent and there were extensive regulatory barriers. The free trade agreement eliminates the vast majority of these barriers to trade. The agreement will boost growth and create jobs across the economy. It is estimated that the agreement will bring £17 billion of opportunities to European Union goods and services exporters, of which £2 billion will accrue to the United Kingdom. This is why almost all European Union and UK business groups support this agreement.
The United Kingdom is well placed to benefit. South Korea is already a valuable trading partner for the United Kingdom. In 2010, bilateral trade was an impressive £6.5 billion. South Korea is the UK’s seventh largest export market in Asia, and in 2009 the United Kingdom was the largest single investor in South Korea, but we want to strengthen this relationship further.
The free trade agreement will create opportunities where the United Kingdom has a distinct competitive advantage: in legal and financial services; in ICT, where UK firms can take their world-class technology and cutting-edge designs to South Korea; in automotive components; in whisky; in pharmaceuticals; in aircraft engines; and in low-carbon technology, to name just a few. The agreement will dramatically increase our access to a market of 50 million people, with growing disposable incomes and an appetite for British goods.
Following the free trade agreement coming provisionally into force on 1 July 2011, the United Kingdom Government have been working closely with UK businesses and the South Korean Government to ensure that the United Kingdom extracts the full benefit from the deal. BIS and Foreign Office Ministers have hosted a range of events with UK business and the Government of South Korea. UKTI is working hard to promote the deal, including through its report on 100 opportunities for UK companies in Korea.
The coming into force of the EU-South Korea Free Trade Agreement provides the United Kingdom with a tremendous set of opportunities. It will boost UK growth, and create UK jobs through enhanced two-way trade and investment. It will strengthen our strategic relationship with an important global player, and it will lay the ground for future trade agreements between the European Union and other parts of the world. I therefore commend the order to the Committee.
My Lords, if I may, I will make a few comments and I declare an interest as an importer of Far Eastern cars for the past 35 years, some of which were Korean—in fact, we imported Hyundai. We indeed were a beneficiary of “free trade” in those days. It was not free trade, but we had import duty free status for a period of years while industry in the Far East was growing. My perception is that this agreement may be more beneficial to Korea than to us. I am concerned as to whether we should be encouraging people to set up assembly facilities here. For instance, Toyota and Honda have set up facilities here. Does it prejudice their situation when Korean cars will come in duty-free? What impact does that have? I am concerned about that aspect of it and if the Minister can make some comments about that, it would be useful.
The second issue I have some concern about is that having been involved in a legal dispute in Korea, their legal system has—if I may put it this way—a few question marks over it. If British firms dealing in Korea were to be encouraged to use an international court, that might be very helpful. Those are my comments.
My Lords, I thank the Minister as well from this side of the Committee, and on behalf of the other part of the coalition, for making that brief statement on the Korea trade agreement. As she quite rightly said with a positive tone in her voice, which was justified, this is a really important agreement with a really important country. As we see from the documentation, the free trade agreement between the European Union and Korea is the most comprehensive free trade agreement ever negotiated by the EU. Enormous progress has been made on the learning curve, in the EU, in other countries and at the WTO. I believe I am right in saying that some of the UK members of the negotiating team on behalf of the EU, through the European Commission, were particularly complimentary about how progress was made in those detailed discussions with their Korean counterparts.
However, it is not all late in the day for this. It is still early days, as this agreement started provisionally only in July and is running until agreement is reached finally, once these orders have been ratified by the parliamentary process. It remains to be seen exactly what will happen. In the UK, there is a problem that we should all really work hard at, both in government and elsewhere, such as in industry—not to resolve it completely, which is probably impossible, but to mitigate it in the future. That problem is that the United Kingdom normally has a trade deficit with most other advanced territories in the world. There are some exceptions to that, which I will not go into in detail because otherwise I would speak for too long, but that is the reality. Of course, we make up for that overall position of net deficit in physical goods and exports by our invisibles and other matters in the City and elsewhere, which cover that position. Normally, we hope that those give us at least a reasonable current-account position even if not an overall surplus, which happens from time to time.
That is the reality. Even after the devaluation of the past five or six years, which has been in the 20 to 25 per cent range, we still find that is so. I believe that I am right in saying that the latest trade figures were, once again, the widest ever or they may have been the widest for quite a few years. I did not have time to look in the Library for those figures, but it is either one or the other. Either way, it is disturbing that after yet another devaluation post-war in the United Kingdom—some of them formal devaluations; others in the market place only—we are still not exporting enough in terms of physical goods and services. Korea will be sending more to us, and the amount that we will send to Korea will be less, except, of course, in services and in what legal and accounting firms and others can contribute to this trade agreement.
Will the Minister outline which groups in the UK did not support this free trade agreement? She said that most groups had supported it. Some £500 million of benefits per year to the UK is a modest figure in comparison with our objectives in the Far East. I hope that she is optimistic about a rate of growth. Finally, will she indicate to the Committee the Government’s understandable apprehensions about whether tensions now between the Republic of Korea and the Democratic People’s Republic of Korea will affect some of these aspects of growth and trade between the UK and the EU as exporters to Korea? What is the situation in Korea with regard to trade and business?
My Lords, I, too, would like to thank the Minister for her statement. I am not opposing this statutory instrument, but I am, like a number of noble Lords, interested in the value of UK trade with Korea. The impact assessment shows a £0.2 billion deficit. Those are the figures under the heading:
“Value of UK trade with Korea”,
on page 10 of the document. In goods, there is nearly £1 billion excess on imports. In services, we have some advantage.
The noble Lord, Lord Dykes, was right to describe the boosting by £500 million a year as somewhat modest. While I do not want to pour cold water on the enthusiasm of the Minister in this area—I note what she said about BIS and Foreign Office Ministers hosting events, which is a good initiative—I would be interested in hearing from her whether BIS and UKTI will give any special assistance to business exporters and potential exporters of both goods and services.
The point that the noble Lord, Lord Edmiston, raised is that these are both—aggressive might not be the right word—enthusiastic and successful exporters. We should not underestimate that. Again, I do not want to sound as though I am opposing the concept of free trade: I am not. But we ought to be cognisant of the nature of competition and understand the importance of giving every assistance and encouragement to our own exporters both in goods and services.
My Lords, I would like to thank noble Lords for their contributions today. I did rather expect that I would hear from someone with experience and expertise in the motor industry like my noble friend Lord Edmiston. Let us start by recalling that the free trade agreement is an excellent deal overall for the UK—worth £500 million a year in UK GDP. As well as eliminating South Korean automobile tariffs, the free trade agreement contains the most ambitious disciplines ever negotiated by the European Union to tackle non-tariff barriers. South Korea will now accept international standards as being equivalent to Korean regulations, saving considerable time and expense retesting EU cars once exported to Korea.
At the same time, Korean car producers must comply with all EU rules and standards, and the free trade agreement prohibits the introduction of any new unjustified barriers to trade. As well as the EU market access committee, a working group on automotive trade will be established to monitor and increase regulatory co-operation. Furthermore, the European Union has secured a range of provisions in response to the industry’s concerns, including a slower phasing of tariff reductions and a bilateral safeguard clause, which will protect any industry from harm due to the free trade agreement. For these reasons, we believe that the EU has secured a possible outcome and an excellent deal overall.
The European Union free trade agreement is the most ambitious FTA yet, as I said. We are already an open market compared to the protectionist South Korean market, where most barriers will be eliminated as a result of this agreement. The agreement will contain extensive provisions to encourage two-way investment as well as trade, and this will be an essential element of the negotiation gains from the FTA.
I expected the noble Lord, Lord Dykes, to speak on this SI, and I am delighted to see that in broad terms he welcomes what we are about. He asked what consequences the death of Kim Jong-Il may have for the security of North Korea and the wider region. We think that long-term stability and security in the Korean peninsula will be achieved only through the complete and verifiable denuclearisation of North Korea. We believe that the establishment of the six-party talks offers the best prospect of achieving this, and we welcome the recent talks between North Korea and South Korea and between the US and North Korea and hope that despite the death of Kim Jong-Il, they may lead to the resumption of talks in the near future.
As far as the implementation and the legal system worries are concerned, how the EU-South Korea free trade agreement will be implemented is a good question. The UK is working very hard, along with its EU partners, to ensure that the free trade agreement is fully implemented as quickly as possible. So far, virtually all the agreement has been implemented as intended, although there are some areas where more work is most certainly needed. Ministers and the British Embassy in Seoul continue to press South Korea to resolve these outstanding issues. The UK also raises these issues through the EU Market Access Advisory Committee, which defines the priorities for the European Commission implementation task force.
My noble friend Lord Dykes seems to have given me several questions to answer. I hope that he is happy with the answers I am giving. He asked which groups do not support the agreement. I have already set out the concerns of the automobile industry, which is virtually alone in supporting this deal. The agreement will generate benefits across the whole of the UK’s economy, as I have already explained.
The noble Lord, Lord Young, asked about UKTI and about matters that I hope I have covered in answering the questions asked by my noble friend Lord Dykes. UKTI has a special role here. It is keenly working with us to help ensure that we get the best deal out of this agreement. Foreign Office Ministers have hosted a range of events with UK business and the Government of South Korea. UKTI is working hard to promote the deal, including through its report on the 100 opportunities for UK companies in Korea. I think that that is as much as I can do in answering the questions that have been put thus far.
I repeat that South Korea is a high-growth, high-income market. It is an increasingly important international partner of the United Kingdom. We have discussed how the EU-South Korea free trade agreement is a game-changing deal for the European Union and, especially, the United Kingdom. It will boost the United Kingdom’s growth, it will create UK jobs and increase UK GDP by an estimated £500 million a year. The agreement will also enhance our strategic relationship with an important global player and it will lay the ground for future trade agreements. Therefore, I commend the order to the Committee.
Is the Minister aware of certain practices that used to exist in South Korea? It may be that this does not happen any more, but in previous years anyone who drove a non-Korean-manufactured car could look forward to a visit from the tax inspector and a thorough investigation. There were various means by which South Korea managed to keep a very high percentage of local cars in its market. Is the Minister aware of other practices of that nature?
We are aware of difficulties that have happened in the past. When the noble Lord reads about the matter in Hansard, I hope that he will realise that we have put in place various restraints and careful practices with which we will ensure that the Koreans have to comply if we are to trade with them. We hope that they will want to trade with us even more than we will want to trade with them. I realise that the motor industry is a very sensitive issue, but we have a range of actions that we may take if we see that there is danger of unfair trade taking place.
The EU-South Korea free trade agreement is ground-breaking in its approach. We have reached an agreement that responds adequately to EU concerns on such things as diesel emissions and post-market surveillance of safety standards. We have tried where we can to write as many things as possible on to the face of the agreement to ensure that, if we feel that there is unfair practice going on, industry in this country can quickly tell us and we can quickly return to see whether we can quickly sort out the problems.
Local Better Regulation Office (Dissolution and Transfer of Functions, Etc.) Order 2012
Considered in Grand Committee
My Lords, there are two main purposes of this order: to dissolve the Local Better Regulation Office and to transfer its continuing functions to the Secretary of State and Welsh Ministers. The legislation that is amended by this order comprises: the Regulatory Enforcement and Sanctions Act 2008; the Parliamentary Commissioner Act 1967; the Superannuation Act 1972; the House of Commons Disqualification Act 1975; and the Freedom of Information Act 2000.
The order achieves three equally important things: first, greater transparency within the delivery of better regulation policies; secondly, greater accountability within the process of formulating better regulation policy, which, in combination, gives rise to ensuring that a strong voice for regulatory reform can be heard, supported and championed at the heart of government; and, thirdly, the opportunity to realise savings in public expenditure. In the specific instance of the LBRO dissolution, these savings are modest; however, they contribute to the greater efficiencies to be realised through our wider public bodies reform programme.
I feel it is important to reassure my colleagues from the outset that the primary authority scheme, currently being effectively led and run by the Local Better Regulation Office, will continue seamlessly when this order comes into force. The LBRO is a small unit with fewer than 30 employees, but its effectiveness has led stakeholders to hold the primary authority scheme, and its other work, in high regard. The Government wholeheartedly support the continuation of this work; indeed we propose to extend it, and intend to bring forward separate legislation to do so.
Delivering regulation in the right way supports business growth and it is right therefore that we should maximise the opportunities that good regulation can bring. This Government remain focused not just on reviewing the volume of regulation, but on ensuring that the way in which regulation is delivered is appropriate, effective and efficient. Improvements in the delivery mechanisms for regulation are of vital importance to the businesses that experience the enforcement of these regulations on a daily basis. Good regulation supports economic prosperity and consumer protection. The Local Better Regulation Office has been driving improvements in these areas since it was established as a non-departmental public body via the introduction of the Regulatory Enforcement and Sanctions Act three years ago.
Regulation provides essential protections to society and brings invaluable benefits. A fair, efficient regulation system sees an expectation of equal treatment for all those affected by regulation, allowing our businesses the freedom to grow and to prosper with an understanding of what is expected of them and what they are expecting from regulators. Good, sensible, proportionate regulation is also consistent and appropriately targeted. I feel it is right that our businesses expect good regulation as the norm. Within this environment, we need to remain aware of the need continually to drive improvements, to ensure consistency and, as a Government, to lead quality regulatory reform, creating a supportive environment in which our businesses can grow and prosper.
In October 2011, the Minister for the Cabinet Office announced proposals for reform of 901 public bodies, to increase accountability, to cut out duplication of activity, and to discontinue activities that are no longer needed. The proposals are a fundamental part of the commitment made by the coalition Government to increase radically the transparency and accountability of all public services and to reduce the number and cost of public bodies.
This is a part of a wider programme of public sector reform aimed at giving a better deal for taxpayers, which is essential in these times of austerity, ensuring resources are targeted where they are needed most and using transparency to help the public hold the Government to account. The reform process aims to reinvigorate the public’s trust in democracy and also to ensure that the Government operate in a more efficient and business-like way.
The review of the LBRO considered two main issues: first, whether all the current functions of the LBRO were still required and, secondly, how these functions could be best delivered, including whether the LBRO met the tests for continuing as an arm’s-length body. The review considered LBRO’s three core functions of administering the primary authority scheme; simplifying the national framework for local authority enforcement; and directly supporting local authority improvement. The first two were identified as being of clear and continuing value. However, delivery of those functions via a non-departmental public body was not felt to be the most appropriate or effective organisational structure.
Various organisational options were discussed within the review process. The conclusion reached to ensure the best combination of independence, transparency, accountability, flexibility and stakeholder confidence, as well as value for money, was that LBRO’s work should be taken forward by a streamlined unit within the Department for Business, Innovation and Skills. This new unit would be called the Better Regulation Delivery Office and would continue LBRO’s excellent work with national regulators, policy departments, local authorities and business.
A consultation on this policy proposal was held between June and September of 2011. Some 86 responses were received from LBRO stakeholders, including businesses, trade associations, local authorities and other local regulatory bodies, national regulators and professional bodies. The majority of responses received were positive and supportive of the proposed administrative changes. That indicates that we have navigated the right course in our proposals: taking into account the views, concerns and needs identified throughout the course of the review process.
It should be noted that those responding took the opportunity to praise the expertise of the LBRO staff for representing their views and experiences in an effective way and for running the primary authority scheme with efficiency and effectiveness. This was especially true of business representatives. Professional bodies including the Chartered Institute of Environmental Health and the Trading Standards Institute commented on the expertise and delivery capability of LBRO and welcomed LBRO’s approach of working with them to improve professional standards and provide support to regulatory offices. The changes that the order will enact will see all that expertise retained while enabling a major step forward in taking regulatory reform to the heart of government, ensuring protection and growth for our businesses.
Turning to the specifics of today's order, the order dissolves the Local Better Regulation Office and transfers its continuing functions of administering the primary authority scheme and simplifying the national framework for regulatory enforcement to the Secretary of State and the Welsh Ministers, as appropriate. It provides that the Secretary of State and the Welsh Ministers shall enter into a memorandum of understanding, which will set out in detail how the two Administrations will operate the transferred functions. That will ensure a closely co-ordinated approach across the territories, which is essential for our businesses working across geographical boundaries.
The order will also provide for the transfer of all LBRO’s property, rights and liabilities to the Secretary of State. It provides for the application of the Transfer of Undertakings (Protection of Employment) Regulations 2006 to the transfer of LBRO’s rights and liabilities relating to its employees. It provides the necessary repeals and amendments to the Regulatory Enforcement and Sanctions Act 2008 and other legislation that is consequent on the LBRO’s dissolution and transfer of its functions, property, rights and liabilities to the Secretary of State or to the Welsh Ministers. It also provides transitional provisions and repeals to the power to enforce guidance given to local authorities.
The administrative changes set out in this order ensure that stakeholders of the Local Better Regulation Office receive the same excellent level of service from the existing experts that they have built strong relationships with over the past three years. It will increase the transparency and accountability of its work, increase the impact of this work at the heart of government and make savings to the public purse.
Most of the current LBRO experts will move into the Department for Business, Innovation and Skills on 1 April 2012 to form the Better Regulation Delivery Office. This distinct unit will sit within BIS alongside the Better Regulation Executive. The BRDO will have a clear delivery focus, working with businesses and regulators to simplify and improve the implementation of regulations. That will supplement BRE’s focus on how Whitehall generates and designs regulation. Bringing these two elements together within government will strengthen the overall package of regulatory reform.
The BRDO will continue the operation of the successful primary authority scheme and provide support and evidence-based advice to regulators and to the UK and Welsh Governments. During consultation, the independence of LBRO in operating the primary authority scheme was repeatedly praised. I would therefore like to stress that this operational independence will continue. As Ministers, we will rightly want to satisfy ourselves that the scheme operates effectively, efficiently and fairly. That said, we will not generally become involved in the day-to-day operation of the primary authority scheme, or in individual primary authority partnership decisions. This operational function will be exercised by the experts who have been delivering this scheme so successfully for the past three years.
A full impact assessment has been completed and there are no new burdens on business as a result of this order. Stakeholders prize the work of the Local Better Regulation Office. The changes enabled under this order will see the new Better Regulation Delivery Office build upon its work to date to continue to reap benefits for businesses. By ensuring consistency and continual improvement in the regulatory landscape we can strive to provide an even stronger, more supportive environment in which our businesses can strengthen and grow for the benefit of our whole economy, while still providing necessary protection for citizens and communities. I therefore commend this order to the Committee.
I thank the Minister for her comprehensive statement. In the beginning she said that there would be greater transparency and accountability. I noticed the assertion but I am not sure that I necessarily saw the evidence of that. This is an interesting NDPB and the impact assessment or the review showed that it was one that was highly regarded, which I think is important. When the Minister talks about greater transparency and accountability in a body that is being absorbed into BIS, I think we are entitled to some validation of that statement.
The Minister also said that the primary authority scheme will continue. However, paragraph 8.5 of the Explanatory Memorandum states:
“In line with the conclusions of the BIS led (public bodies) review of LBRO, the power to direct local authorities, and the power to enforce service improvement will be stopped. However, the power to issue guidance to local authorities will be retained, as will the requirement that local authorities must have regard to that guidance”.
Therefore, while I hesitate to use the word “disingenuous”, I think that the Minister did not give quite the whole story when she said that the primary authority scheme will continue. The primary authority scheme will not continue in its present form; it will be modified. Instead of there being a power to enforce, there will simply be guidance issued to local authorities. Given that that aspect of the operation of the LBRO was highly regarded, that is a not unimportant issue that requires some clarification.
Before moving on to the comments of the Federation of Small Businesses, I want to make one other comment. What assurances can the Government give that the better regulation delivery office will retain the independence and technical expertise that the LBRO had? Can the Minister assure us that the office’s important work will continue with the same vigour within BIS? It needs to be strengthened rather than weakened.
Interestingly, the Federation of Small Businesses has articulated concerns about the abolition of the LBRO, which it says plays a “vital” role in tackling regulatory burdens:
“LBRO must not be scrapped but overhauled if small firms are to truly see a reduction in regulation”.
The Federation of Small Businesses has also said:
“Raising the standard of inspections and making the process of inspection a positive experience is the cheapest and fastest route to improving the overall perception of the regulatory burden. The FSB believes the Local Better Regulation Office (LBRO) has a pivotal role to play in this process”.
I think that the Government have quite a way to go to convince everybody that the better regulation delivery office will be as good as the Minister has asserted.
There has also been a bit of an argument about the representative steering group. The Explanatory Memorandum states:
“Responses on the question of the proposed membership were evenly split, 50-50. The basic proposition to establish the group was supported, half the respondents agreed with the proposed membership, but others wanted to see the balance changed”.
The role of the representative steering group will be important. Given the assurances on transparency and accountability, I would welcome an assurance that the notes of the meetings of the representative steering group will be published.
I eagerly await the Minister’s response to some of those questions.
My Lords, I wonder whether I might intervene at this point. I am very disappointed with the order and its accompanying Explanatory Memorandum. It is very useful to have the Explanatory Memorandum, but an examination of it reveals—as my noble friend Lord Young has shown—that it makes a number of points that stress almost the opposite of the objectives and successes that the Minister has claimed for this order. For example, the Minister talked about the greater transparency, accountability and strength that will be provided. However, I am not sure that there will be greater transparency when the body is transferred inside a government department, where its work and effort will no longer be as clear as that of an NDPB. The savings that are claimed are said to be modest, which is not a very great strength for the change, while the response rate for the consultation on the order is also said to be low.
The start of all this came, of course, with the very rash and widely complained- about Public Bodies Bill, with its great list of bodies that departments had to come up with in order to make a comprehensive survey across the whole field of government. It was overambitious and has been much changed since. The excellence of the present scheme, referred to by my noble friend Lord Young just now, was also referred to by several of the consultees. Indeed, in all fairness, the Minister indicated that many of the consultees praised the work of this NDPB, the LBRO, as it stands. If the work of the LBRO is transferred to the business department, this will be in accordance with what I might call a government fashion at present; something that is being done, being attempted or being at least suggested all over the board—across all sorts of departments, quite apart from the business department. Claims are being made for how valuable the change would be in terms of transparency and accountability in each case. The Government, however, are having some difficulty, as they are in this case.
Take the work of the LBRO in relation to the primary authority. The whole idea, which goes back several years and started on a voluntary basis, was that where there were local authorities and major businesses—major supermarkets, for example, operating in most counties all over the country—instead of each local authority taking the responsibility for enforcing environmental or trading standards requirements, local authorities would get together and enable one particular authority to be the primary authority and take the main responsibility for any prosecutions that were needed. Before any prosecutions are made, of course, there is no doubt a lot of useful discussion that leads to changes in commercial practice. The excellence of the current way of running things has been recorded by a number of people who have taken part in the consultation. My noble friend Lord Young referred to one matter on which the memorandum itself says that there was complete disagreement across the board. In paragraph 8.3:
“The consultation gained majority support for … the proposals bar one. The … exception was the proposed membership for the Representative Steering Group”.
I would be glad if the Minister could say something about that split in responses and indicate where they are in their thoughts and discussions about that steering group. As a whole, therefore, I am not at all convinced by the Explanatory Memorandum which justifies this order. It is more a matter of following, as I say, current government fashion in this field; pushing things into government departments which do not carry—and cannot carry with the outside world and with the groups that are concerned about this—the same degree of independence and trust as an independent NDPB has done, and in this case has been doing very well.
My Lords, I support my noble friend on her proposals regarding this order. Whereas I sympathise with the remarks of the noble Lord, Lord Borrie, that this is government fashion, behind that fashion lies a fundamental democratic principle. There are a lot of us who believe that one of the problems with the proliferation of the creation of these bodies over the last 10 to 15 years is that the democratic accountability of what they do was lost.
I can give an example to the noble Lord, Lord Young, about the difference: were this order not to be passed so that this organisation were kept in place, when he stood up to ask the Minister a question about the activities or the proposals that he has concerns about, she would, quite rightly, have said that it was not a matter for her but for this body. In future, when he has a concern about what happens, because it is within the department, she will be accountable for the activities of the people concerned. I know that, as the noble Lord, Lord Borrie, said, it is the fashion of this Government to abolish as many of these bodies as possible, either entirely or bringing their activities within the relevant ministry, and I have some sympathy with his view that the Bill tried to attempt too much and that far too many bodies were initially included, but my fundamental belief is that wherever possible these bodies should be democratically accountable. That is particularly the case here.
I have three questions, one of which has been touched on by noble Lords on the Labour Benches. First, one of the things that are clearly emerging is that a lot of the bodies being abolished, or whose activities are being brought within the relevant department, have a lot of property assets. In this case, is there a significant property asset that will be released or sold, and do we know its value? Secondly, the Minister indicated that from April most of the staff within the organisation will be transferred to employment within the department. Have they signed up to do that or do we just hope that they will? My third point follows up the point that both noble Lords made about the representative steering group. The document indicates that there was a 50:50 split in the consultation over what should happen. Where do we think we are? What is the timing of the decision to decide what that representative steering group should be?
I am trying very hard to make sure that I can answer as many questions as possible. It does not seem that long ago that I was standing in this Room—perhaps it was a couple of years ago—at the birth of the LBRO. At that time, I wondered whether we needed another organisation. Here I am now saying that we do, but that we are going to keep it to ourselves and I am going to be responsible for it, whatever it does. I thought that I had made a very long and detailed speech to try to cover as many points as I possibly could this time round, but obviously all I have done is to provoke people with expertise in this area to come back at me with questions. I hope that I am going to be able to answer them.
The noble Lord, Lord Young, talked about the Federation of Small Businesses. Small businesses want to see greater benefits. One is that we have announced that we will make assured guidance available to them: a benefit of the primary authority. He also asked about the primary authority. The power to direct remains in the case of the primary authority; it is in other guidance where the power to enforce will be removed. He also spoke about the RSG minutes. We have not yet considered publication of the minutes, but we will look at that proposal. It was not raised in consultation, but I see no reason why they should not be published. If there is no great objection, I do not see why he should not have what he has asked for.
The noble Lord, Lord Borrie, said that the savings will be very modest and will not in themselves address the deficit. That is not quite what we meant. The savings, which will be £6.4 million over 10 years, are not insignificant given the financial situation we find ourselves in. I hope I was very clear in my statement that we want to make sure that the excellent work that the LBRO has done continues, but any money at all that we can manage to save by reorganising should be saved. We hope to be able to continue with the same people and do the same work while cutting the overhead costs.
The noble Lords, Lord Borrie and Lord Razzall, talked about the representative steering group’s split responses. The role of the RSG was supported by 80 per cent of respondents and any split responses reflected a debate as to the membership, with many of the respondents actually wanting to be on it themselves. That was the real balance of the argument there.
In reply to the noble Lord, Lord Borrie, on accountability, the RSG will represent a balanced range of stakeholder perspectives and aim to strike the right balance between the regulators and those whom regulation seeks to protect; to provide advice on the strategic direction and approach of the organisation; to provide oversight of the operation of the primary authority to ensure that due process is followed; and to have its membership reviewed regularly and refreshed to open up engagement and encourage new perspectives. It will be no more than 12 individuals, not operate as a formal body and not oversee day-to-day operations of the BRDO, which we hope will add even more to the great work that it has already done.
The noble Lord, Lord Razzall, talked about the property assets. In answer to his question, no—lease transfers will be consolidated with other BIS estates. Sadly, we do not have very expensive property assets that we can get rid of. I note that the noble Lord supported what I introduced today in this regard. On his question about whether employees have agreed to come, yes, all the employers in post at the date of transfer have agreed to be transferred to the department and will continue to work from Birmingham for the foreseeable future. The noble Lord also asked about business sign-up. As he suspected, business had some concerns. We have certainly attempted to listen to those; the operational independence in the primary authority is an important element of that, and keeping the business reference panel is also important. Businesses have questions, but are broadly supportive of the proposals. We will of course continue to listen to their questions and worries as we go forward.
Consistency and continual improvement in the regulatory landscape are essential if we are to progressively strive to provide an even stronger, more supportive environment in which our businesses can strengthen, prosper and grow for the benefit of our whole economy. The needs to support greater transparency and accountability, to create a more effective regulatory policy on development and to provide a strong voice for regulatory reform at the heart of government are not in dispute. This order underpins those objectives, and I therefore commend it to the Committee.
I may have misheard the Minister when she said that the power to direct local authorities will remain. That is what I thought I heard, but I would like some clarification, because the Explanatory Memorandum is quite clear that the power to direct local authorities goes and the power to enforce service improvement will be stopped. What then remains is just a question of guidance to local authorities, so I would like some further clarification.
Perhaps I can try to be helpful, because I do not want us to take up more time than we need to, but that is not quite what it says in the Explanatory Memorandum. I notice that the Minister’s officials are nodding. Perhaps the best thing that the Minister could do is to write to us and clarify the situation.
Perhaps the Minister could specifically explain, when she writes, how what she said relates to paragraph 8.5 of the Explanatory Memorandum, which seems to suggest that,
“the power to direct local authorities, and … to enforce service improvement will be stopped”.
It does not seem to reflect that, but that is actually what it says.
My Lords, I am always reluctant to say that I will write because it sounds like a cop-out. I always try if I can to get the answer on the day, but I am obviously not giving as clear a response as is required by your Lordships. I will, of course, write, if that is acceptable.
Special Educational Needs (Direct Payments) (Pilot Scheme) Order 2012
Considered in Grand Committee
My Lords, when we discussed the general principle of testing the use of direct payments for special educational provision on Report on the Education Bill back in November, I am glad to say that there was a broad welcome for the measure from all sides of the House. However, there was a suggestion from the noble Lord, Lord Touhig, that the detail would merit further scrutiny and that the affirmative resolution procedure would be the right way forward. That was a suggestion that I was happy to adopt, and I am glad that we have an early opportunity to discuss this important order today.
I also put on record my thanks to the noble Lord, Lord Rix, for the attention that he has personally paid to this issue since November and for the helpful exchanges that he has had with my honourable friend Sarah Teather. I also thank the Special Educational Consortium for the way in which it has worked very constructively with officials to look at some of the detail. We have benefited from its advice as well.
As noble Lords know, we said in the Green Paper, Support and Aspiration, that we want to give every child with a statement of SEN or in a new single education, health and care plan, and their family, the option of a personal budget by 2014. That will help give families more of a say in decisions about the support services they use. We have already set up 20 pathfinders to look at improving assessment processes and developing personal budgets for parents. What we are not currently able to do is test the contribution that direct payments for special educational services could play in empowering families. We can do that for health and social services, but not for education. By passing this order, we will also be able to trial direct payments for educational services as part of testing personal budgets across health, social care and education which, if we want to bring all the services together in a more integrated way, seems to be the logical next step. We propose that the pilot should initially run for 14 months until March 2013, with the option to extend for a further two years after that point, if necessary. This is in line with the Green Paper pathfinder testing period.
During our debate in November, noble Lords sought reassurance on a number of points. Let me try to deal with each of them. The noble Lord, Lord Touhig, sought reassurance on the potential impact of direct payments on services to other children and young people with disabilities and SEN. The issue was also raised by the Special Educational Consortium during its discussions with officials from the department. We recognise the importance of this issue not just in terms of the viability of services, but also as an equalities issue. So we are clear that the benefits that direct payments may deliver to those who choose to receive them must not be achieved at the expense of other service users.
That is why we have included the requirements set out in paragraphs 11(c) and 17(f) of the order, which require the local authority to consider the potential for any adverse impact on other service users before entering into any individual agreement on a direct payment and to stop making direct payments should that become apparent at a later date. We recognise that there needs to be a careful balance struck between achieving our aim to give families greater choice and control and protecting existing services. We will need to work through this issue, as and when it arises, with the authorities taking part in this pilot.
In response to questions raised about securing a direct payment, we have sought to give greater clarity to the process for agreeing a direct payment and the provision that it can be used to purchase. We have linked the offer of direct payments to the making of a new or amended statement or the carrying out of a learning difficulties assessment to ensure that the question of whether direct payments will be made does not affect the existing statement and assessment process.
In addition, we have included a requirement to reach agreement about the goods and services which are to be secured by means of the direct payments and a requirement to obtain the written consent of the proposed recipient and, if different, the parent or beneficiary. The written consent must specify the agreed provision and the amount of the direct payments, including whether they are to be paid in a lump sum or in instalments.
Following questions from the noble Baroness, Lady Jones of Whitchurch, about support to families, we have included requirements in paragraph 19 of the order for authorities to make arrangements for a person receiving direct payments to obtain information, advice and support and provide them with written information about organisations that may be able to offer advice and assistance in connection with direct payments. This is an important point, and I am grateful to the noble Baroness, Lady Jones of Whitchurch, for raising it.
Pathfinder authorities will need to work with independent organisations to test how this advice and guidance can be delivered most effectively. A key objective of our Green Paper pathfinders overall is to explore how the voluntary and community sector can be used to improve access to specialist expertise and to introduce more independence to the system.
We have learnt from the individual budgets for disabled children pilot, which began under the previous Government, that, with effective support, advice and information, personal budgets can be accessible to families of all backgrounds. We will work with the authorities taking part in this pilot to ensure that they benefit from the experience of those individual budget pilots. To this end, we have included the individual budget pilot authorities in this pilot scheme alongside those taking part in the Green Paper pathfinder programme.
Overall, we are clear that there is much to learn and work through in the implementation of direct payments for special educational provision. This pilot scheme will allow us to do this as a coherent part of the testing of the reforms being undertaken by our Green Paper pathfinders. This includes the work that they will be doing on personal budgets, of which direct payments are just one method of delivery, and their wider work on the new single assessment process and education, health and care plan. We have made available to both Houses a section of the Green Paper consultation response relevant to personal funding and direct payments.
Finally, I would like to repeat the reassurance I gave during our debate on the primary legislation. The pilot scheme will need to be subjected to proper evaluation if we are to learn from it. We are working on the detail of that evaluation at present, but I can confirm that we intend it to be undertaken by an independent research company and to form a distinct but coherent element of the wider evaluation of the Green Paper pathfinder programme. I am happy to repeat my commitment to sharing those findings as we go along.
To sum up, I think that the previous time we debated this we all agreed on the direction in which we are keen to travel, but we certainly recognise that a number of difficult questions and issues are still likely to arise as we go along that way. I believe that this order provides a framework within which we can explore and, I hope, find ways to address those questions while ensuring that appropriate safeguards for families and the public purse are maintained. I beg to move.
My Lords, I thank the noble Lord, Lord Hill, and his ministerial colleague Sarah Teather, the Children's Minister, who I previously met last autumn along with a delegation from the Special Educational Consortium to discuss in more detail the statutory instruments in relation to direct payments for special educational needs in the various pilot areas. I welcome the constructive and positive dialogue and correspondence with the noble Lord, his ministerial colleagues and various officials in his department. I believe that the statutory instrument, as laid, is much improved as a consequence of that process.
However, there remain a number of points on which I continue to seek clarity. For example, I seek assurances that if people with a learning disability are the recipients of direct payments, it will not lead to a reduction in the level of resources available for the provision of their education. I believe there is a genuine risk of this. In the field of social care, I am aware that personal budgets have sometimes been used by local authorities as an opportunity to try to reduce their costs. We must not allow this to happen with direct payments for SEN, which is why it is so important to get the statementing process right.
I also welcome the Government’s inclusion of paragraph (10) in Schedule 1 to the order, which requires local authorities to agree the amount of direct payment with the recipient in advance and to obtain their consent in writing. However, it is important to bear in mind that many statements of SEN and learning difficulty assessments are not sufficiently well written to allow proper calculation of the cost of the services they describe. For example, a statement may say, “Regular input from a speech and language therapist”, when it should say, “Three hours input from a speech and language therapist per week”. It would be impossible to calculate an amount that correlates to regular input, and in practice this would be down to negotiation between recipients and the local authority. In these cases, parents or young people might agree to accept a direct payment that is not sufficient to purchase the support which is actually needed. Therefore, I would like the Government to consider how they could ensure that the provisions set out in a statement of SEN are properly quantified and specified before a direct payment for that statement is agreed upon.
The Minister will also be aware that concerns were previously raised, as he remarked, about the impact of direct payments on the SEN services provided by local authorities for other children and young people in their area. I am uneasy with the requirement in paragraph 17 of Schedule 1 that if an “adverse impact” is made on these services, the local authority would stop making the direct payments. This could potentially lead to unintended consequences. For example, what steps will be put in place to safeguard the interests of the children concerned if a direct payment is suddenly ceased? What guarantees are there to ensure that the resources allocated for the provision of SEN are not misdirected elsewhere? What steps will be taken to ensure that local authorities do not deliberately underfund direct payments so that the payments can be withdrawn soon after? I also seek assurances that the evaluation of the pilots will fully consider these issues.
I look forward to the Minister’s response to the various concerns raised about this order during today’s debate, and I hope that officials in his department will be prepared to continue working with representatives from the Special Educational Consortium as we move forward on this matter.
My Lords, I very much welcome the order, which will provide considerably greater flexibility for families. Certainly, feedback on individual budgets in other areas has indicated a much greater level of satisfaction on the part of users and their families, so the order is very much to be welcomed. I am particularly proud of the work that my right honourable Liberal Democrat friend Sarah Teather has done on this area. I think that she has taken a great step forward in realising the Prime Minister’s objective of making the UK a very family-friendly country. We have a long way to go, but this is a good step in the right direction.
I would like to ask the Minister about assistive technologies and communication aids, but before doing so I had better declare an interest as a voluntary patron of the British Assistive Technology Association. The association is not just a trade organisation. As well as manufacturers of pieces of kit that help people with both sensory and physical disabilities, the association contains members who are part of the third sector, including organisations that buy pieces of kit to help people and advise on their use and professionals who work in that field. I do not ask these questions on their behalf, but this is how I know about the issues—I just want to explain that.
I notice that both the Explanatory Notes and the Minister’s speech referred to services rather than to pieces of kit. Sometimes, bits of machinery and bits of kit—or stuff—can contribute just as much as services, or the delivery of expertise by experts, to the quality of life of people with physical and sensory disabilities. The good thing and the bad thing about these pieces of kit is that the manufacturers are constantly improving them, so they are getting better and better all the time. Therefore, more and more ways are being found of helping people with disabilities to lead a very full life and to communicate. Of course, communication aids are so important because they provide people with a voice who did not have one before. Can you imagine what it is like not to be able to speak? People in this House would not like that at all. As these things are constantly being improved, it is often better not to buy them but to lease them so that, when improvements become available, the equipment can be given back in return for something better. Of course, sometimes the equipment becomes out of date and you cannot get spare parts any more, so you want to upgrade.
Therefore, I want to know from the Minister whether that sort of thing can be covered within these personal budgets. Can parents—or the young people themselves when they reach 16—choose to purchase equipment? Can they choose which equipment they want to purchase? Can they lease the equipment? Can they take on a service agreement to ensure that they always have the equipment available so that, when it breaks down, they can get someone round to sort it out so enabling them to keep their voice or their ability to get around or their ability to communicate with other people or their ability to work or to learn? All these things are very important to the lives of the people that we are talking about, and these pieces of kit help them tremendously.
I hope that the Minister will be able to help me on that.
My Lords, I am extremely grateful to the Minister for writing to me personally to give me maximum notice of this debate, which has been brought on fairly quickly after the new year. I am not complaining about that. We asked the Minister to make debating the order a priority in the parliamentary timetable when the order-making power was inserted into the Bill on Report so that the proposals could be given the fullest opportunity to show their worth. It is therefore good that we have this early opportunity of scrutinising the order. Like the department, we want to get on with the pilots and evaluating them in order to understand how much substance, if any, there is in the concerns that have been expressed. It was nevertheless considerate of the Minister to give me maximum notice.
The Government have been very accommodating in the approach that they have adopted in the development of the order. In response to representations, they agreed that it should require the affirmative rather than the negative procedure. The sunset horizon has been reduced from five years to two years and the pilots will be undertaken only in pathfinder authorities or those that are piloting direct payments in health.
Some further safeguards asked for have also been introduced. In response to representations from the Special Educational Consortium, the order has been reworded with a view to ensuring that the receipt of a direct payment in no way threatens the statutory right of the child to receive the educational provisions set out in their statement and that the viability of specialist SEN services is not threatened by direct payments taking resources out of the system. Nevertheless, I confess to retaining a degree of scepticism about the Government's ability to ensure all of that and as to what will be the effect of direct payments in practice.
I hope that the Minister will not feel that, having been absent on the occasion when the order-making power was added to the Bill, I have turned up as a bit of a wet blanket as regards the general consensus established on a previous occasion and that he does not wish that I had stayed away again this time. I do not wish to be a wet blanket but just like the noble Lord, Lord Rix, I wish to draw attention to a number of concerns that need to be bottomed, which I believe the Minister is as keen to bottom as anybody.
Education is a universal service for all children. What will be the effect of resources being taken out of the system by way of direct payments? What will be the effect on other children with SEN who do not have direct payments? Will they see services reduced? What will be the effect on the ability of schools, colleges and local authorities whose responsibility it is to educate disabled children and children with SEN to plan for the coherent delivery of the relevant services?
I understand that all relevant statutory duties, such as the duty to provide or arrange special educational provision contained in Section 324 of the Education Act 1996, remain in place throughout the pilots. I also understand that the order includes a requirement in paragraphs 11(c) and 17(f)(i) that local authorities consider the potential adverse impact on other services that they provide or arrange for other children and young people in their areas and that they stop making direct payments if it becomes apparent that the payments are having such an impact. But direct payments take money out of the system. How can the Government be sure that this will not threaten the viability of specialist services? How can they be sure that giving responsibility to the parent instead of the local authority or school will not undermine the legal right of children to receive the provision that they are entitled to? The Government may say that they do not want these things to happen, but how can they ensure it?
There may be unintended consequences too. Some schools and local authorities may wash their hands of difficult children by encouraging parents to take a direct payment. Parents and young people may be encouraged to take a direct payment when assessments are unclear as to what they are entitled to, thus putting their ability to purchase the necessary support at risk. What if parents do not use the direct payment for the purpose for which it was intended? Parents do not always behave as responsibly as we would like. Of course, the local authority might be able to take them to court, but that is surely not where we want to end up.
The Special Educational Consortium is concerned that the Government have not fully considered the impact of resources for this universal service being taken away from schools and local authorities and being held by individuals. Careful thought will need to be given to the impact of parents or young people holding the budget. Direct payments held by parents and young people will inevitably interact with school and college finances and employment policies. This may have implications for the way schools and local authorities plan for the education of children with special educational needs. For example, if a parent employs a teaching assistant to work with their child in school, who will be responsible for managing that teaching assistant? Who ensures that the child’s teacher works collaboratively with the teaching assistant? Who is accountable for the education outcomes for the child, and ultimately how will schools’ ability to plan provision for all children with SEN be affected? Safeguards to ensure the sustainability of specialist support services, particularly for children not eligible for direct payments, need to be copper-bottomed.
There are other concerns, such as how the Government will ensure that the provisions set out in the statement are properly quantified and specified before a direct payment is made. I will not go on listing them in more tedious detail now. The department is aware of these concerns from the Special Educational Consortium. They clearly place a premium on the evaluation of the pilots for bottoming the extensive range of issues to which this order gives rise.
I was greatly encouraged by the way in which the Minister was seized of the importance of evaluation when the order-making power was inserted into the Bill on Report and, most important of all, that he clearly saw the importance of approaching the evaluation with an open mind and not with a preconceived idea about what should come out of the pilots. The fact that the department is also working so co-operatively with the Special Educational Consortium on the development of the order and, I hope, with the development of the pilots is very much to be welcomed and is very encouraging. Undertaken in that spirit, I greatly look forward to the results of the evaluation.
My Lords, I join other noble Lords in thanking the Minister for sharing with us the correspondence that his fellow Ministers have had with others because that was very helpful in updating us on progress. As a result of the Education Act 2011, the Secretary of State now has the power to create pilot schemes to test the use of direct payments for meeting special educational needs in education settings. During the passage of the Bill, the Government accepted that this important proposal should receive the appropriate level of parliamentary scrutiny and that it should be done by the affirmative resolution procedure. The Government introduced that at that stage. In his opening remarks today, the Minister very kindly gave me some credit for that idea, but it was not really due to me: it was a holy trinity as the noble Lords, Lord Low and Lord Rix, had the same idea. Unfortunately, they could not be present on Report, so I actually spoke the words and got the credit that the Minister has given me. A holy trinity and not one part of the deity alone was responsible for this proposal, and I am delighted that the Government welcomed it.
On Report, I and others welcomed the greater personalisation of education provision for children and young people with special educational needs because it is right. However, there are some particular risks in the use of direct payments in education, particularly in schools. This is a major change in the way that education is delivered, and it is right that it is being carefully considered. I know the Special Educational Consortium has been working closely with the Minister’s officials. I am very grateful for and appreciative of the hard work that his officials have put in and the understanding that they have had in trying to mitigate some of the worries that the Special Educational Consortium and others have had about aspects of the Bill.
Nevertheless, there are one or two outstanding issues, particularly on the question of evaluation. The noble Lord, Lord Rix, raised the issue of the quality of statements and he was right to do that. We know that many statements are poorly written and that calculating direct payments in these cases may be down to negotiations between parents and local authorities. All of us have had experience of working with parents of youngsters with special educational needs and a great many parents have no experience whatever of handling these kinds of negotiations with some official in the county hall or the town hall. We need to ensure that the advice given is even-handed, because we do not want parents to be pushed into accepting a direct payment where the provision that it can purchase does not meet the real needs of their child. That is so important. So many such parents will not be articulate and will not be used to debating, arguing and trying to put their case in the way that the official sitting across the table from them can understand.
On evaluation, can the Minister assure us that the agency tasked with carrying out the evaluation will look at this as a specific issue within its remit and its findings, before Parliament is asked to renew the schemes? There are three elements of the programme that I would be keen to see thoroughly evaluated. The first is the experience of parents and young people. We need to see how that is operated. The noble Lord, Lord Low, has just made the point in his contribution that this can go sadly wrong, so we need a very thorough understanding of how parents and young people have been able to handle the issue of personal payments.
The second area which I would like to see as part of the evaluation is the impact on local authority-commissioned special educational needs services. This goes across the whole range of services, and I know concern has been expressed that the introduction of personalised support might diminish other services in other areas. We need to ensure that that does not happen and, if it has happened, we need to know why and what we need to do about it to correct it.
The third thing that needs to be very carefully evaluated is how the calculations of direct payments are made. This is new ground and a lot of people—not just the parents but local authorities as well—will be unfamiliar with this way of working. We need to ensure that the young people involved are not disadvantaged. It is important that this kind of evaluation is carried out before we seek to renew this order in two years’ time so that we will be able to base our discussions, debates and deliberations on the actual experiences that such an evaluation will throw up.
Like other colleagues, I thank the Minister for his statement and for sending me a copy of the letter from Sarah Teather with some of the Green Paper responses. I very much welcome in principle the idea of extending direct payments to families, children and young people and the potential for empowerment, choice and control that that gives.
I have a number of overarching points to raise with the Minister as well as in relation to the detail of how the instrument is worded. First, will the Minister say something about when the draft guidance to the pathfinder authorities will be published? The devil really is in the detail of how this scheme will be implemented. Had we had that guidance today, perhaps some of our questions might have been answered. Going forward, I think that the guidance will be critical.
Secondly, can the Minister say a little more about how he sees this pilot fitting into the wider scheme of personal budgets for families of disabled children and those with special educational needs, to which he, and others, referred? As we know, the Labour Government began the pilots for families with disabled children and the current Government announced in September last year the 20 pathfinders to which we have referred today to test the Green Paper proposals, including personal budgets and testing the healthcare element particularly of direct payments through the personal healthcare budget pilots. How far does the Minister see the pilots that we are discussing today, in those pathfinder sites, being integrated with the pilots already going on in relation to social care and healthcare budgets? The instrument is framed as if this is something separate, but a family with children with special educational needs will also very often have health needs—they may also have a physical disability. Does he envisage that these will be integrated so that the families themselves will be able to look across the range of services—of social care, health and education? How will that work? It is really very important that with direct payments for educational services, or those that could be purchased from an educational budget, the families themselves should have some flexibility about how the whole range of resources might be available.
Thirdly, the extent to which this achieves the objectives to which the noble Lord, Lord Touhig, referred—a positive impact on families—will depend in part on the availability of alternative providers for the kinds of goods and services that the families might seek. What expectation or requirement do the Government have on local authorities actively to stimulate that market and support emerging providers in the voluntary sector, so that families seeking to use direct payments have real choice and there are options out there for them?
Finally, as an overarching point, as the noble Lords, Lord Low and Lord Rix, have mentioned, there is a real concern about the total quantum of resources available here. Will the total amount of resources be sufficient to fund adequately the direct payments for those families or young people who seek to use them while not compromising the level of services available to other children?
On some specific issues in the instrument, paragraph 3 in Part 2 says that local authorities must consider the request for direct payments and paragraph 13 refers to the decision by the local authority that it is free not to make direct payments after a request by a family or young person. On what bases can the local authority decide not to make a direct payment? If the technical requirements are there and have been adhered to, such as the written consent and so on, what will be the criteria that the local authority has to consider in deciding whether to make a direct payment? This concerns the balance between the powers of the local authority to make those decisions as against the entitlement of families.
Secondly, how extensive or limited will be the ability to use direct payments and what do the Government envisage? Paragraph 10 says that,
“Before making direct payments, a local authority must … agree … the qualifying goods and services”,
to be served by direct payment. What does that mean in practice? Will the local authority have to agree not just the general but the specific service, or the specific piece of kit? Will it have to agree the provider and the cost? If all of that has to be agreed between the young person or the family and the local authority, there is not much flexibility left for anybody to do anything different. So what is the flexibility envisaged in how the direct payments will be operated?
Thirdly, the degree of control given potentially to the local authority in the instrument seems to provide very broad caveats for the local authority not to have to make direct payments. If the local authority feels that direct payments might have “an adverse impact” on other services or if it is not compatible with the efficient use of local authority resources, it can decide not to go along with direct payments. Like the noble Lord, Lord Rix, while one wants to see powers that ensure the value for money and correct use of direct payments, those are very broad caveats that will allow a local authority not to go down the route of offering direct payments.
I say this because, as a Member of Parliament for many years, I had a number of experiences in relation to adult social care in which I felt that local authorities were very specifically not informing people about the potential to have direct payments. They were making it extremely difficult and took a general view that making direct payments available to some people was against the grain in terms of the efficient use of their resources. Looking at the responses to the Green Paper, I see that 19 per cent—which must largely be local authorities—replied that they had concerns that making direct payments to some individuals would in general almost certainly have a negative impact on the efficient use of resources and so on.
In relation to the monitoring review that the local authority is required to undertake—and it is right that it does—it would have been preferable had there been some reference to the local authority undertaking the review alongside the recipient or beneficiary of direct payments. A very top-heavy approach is envisaged in the statutory instrument with all the powers for decision-making resting with the local authorities. It is an interesting contrast to the way in which the Government have approached the balance of power and control between schools and local authorities, for instance. Here, we see the local authority being given all the control.
My fourth, and most important, point is about information, advice and support. It may well be that there will be some parents who are well able to take on the local authority to exercise the potential to use direct payments effectively, but there will be other families who cannot do that on their own. The quality of advice, information and support is very important. I also note that if the payment for advice and support comes from a third-party organisation, it has to come out of the direct payment. I wonder where that will leave families. Is it a payment for any advice and support in addition to that being given for the service? What implications will that have for the total quantum of resources?
My Lords, I am grateful for the broad welcome for this order and for the helpful suggestions that were made. I would never think that the noble Lord, Lord Low, was a wet blanket. The questions that he raises are proper questions in that they are the same questions that in our different ways we have all been grappling with over the past few months. The key issue is how we get the right balance—this is the point made by the noble Baroness, Lady Hughes of Stretford—between wanting to increase choice for individual parents, families, children and young people and wanting to do that in a way, in this most sensitive of areas, that does not undermine the provision for other children. Getting that balance right is what these pilots are intended to address.
The general answer that I have to a large number of the questions that have been raised is that the purpose and point of the pilot is to try to get answers to the questions that noble Lords have raised. We will know the answers to the points about the balance, what will happen in certain circumstances, what it will mean for different providers, how we know that in some cases local authorities might not want to approach this with an open mind and all the rest of it only once we have this pilot. The evaluation will help us to understand that, which is why, as a number of noble Lords, including the noble Lord, Lord Touhig and the noble Baroness, Lady Hughes, made clear, the evaluation is so important and why in the same spirit as we have tried to approach this whole process we will make sure that that evaluation is shared widely.
Some specific points were raised by the noble Lord, Lord Touhig, who I must now think of as the three in one, if that is not inappropriate in the Moses Room. He asked whether we would look at the experience of parents and young people as part of the evaluation, whether we would look at the impact on local authority-commissioned SEN services and how calculations of direct payments are made. When we finalise the details of the evaluation, those are all things that I am certainly happy for officials to look at. We expect interim findings from the valuation in April this year and then September this year, with a final report available in March 2013. That would be before the order needed to be renewed, if indeed it did.
On the point about guidance raised by the noble Baroness, Lady Hughes of Stretford, which was a fair question, officials will share a draft of the advice to pathfinders with the Special Educational Consortium. I will make sure that other noble Lords with an interest will also see it. We will do that in the coming weeks and we would welcome views because we need to get that guidance absolutely right.
The noble Lord, Lord Rix, raised important points about the statementing process and some of his concerns about that. Paragraph 10 of the order makes it clear that before making direct payments, local authorities must agree with the proposed recipient the amount of the direct payment and the goods and services to be secured by means of direct payment. They must also obtain the written consent of the recipient, which is a point that has been picked up and, where different, the parent and the beneficiary.
We have linked the request for payments to the making of a new or amended statement. As the noble Lord knows better than anyone, local authorities are already required to specify the provision necessary to meet the needs of a child in their statement. I accept entirely that the quality of statements and learning difficulty assessments varies widely and the amount of provision is not always properly quantified. The process of establishing a direct payment will in itself help with the underlying problems with the statementing process because in order to make a payment to a family the local authority will have to quantify the provision that is required. We know from the experience of the children's individual budget pilot—which, as the noble Baroness said, was set up by the previous Government—that local authorities are having to think much more clearly about the provision needed in order to specify the details and the resource available to parents. The process of quantifying the provision in a statement to make a direct payment will make those statements more specific and help to address the noble Lord's concerns.
The noble Lord was concerned that trialling direct payments would lead to a reduction in the level of resources for a child’s education. There is no intention to use direct payments to reduce the amount spent on services and the existing duties on local authorities and schools in respect of special educational needs still apply and will need to be discharged through any direct payment.
My noble friend Lady Walmsley raised an important point about assisted technologies, for which I was grateful. They will fall within the scope of the SEN direct payments pilot when they are specified in Part 3 of the SEN statement or in the learning difficulty assessment. Part 3 of the SEN statement can include specification of appropriate facilities and equipment. Where it is in the scope of the statement and where it is meeting identified needs, it can be part of the pilots. The answer is that the kind of equipment she is talking about could be leased, but if there are other points that I can usefully find out I certainly will.
The noble Lord, Lord Low, asked a number of questions which were to do with wanting reassurance in a number of areas. If, for example, parents did not spend money wisely, there are safeguards in place: the local authority must be satisfied that the person receiving the direct payment will secure provision in an appropriate way, while local authorities have to monitor and review the use of direct payments. He was concerned about the possibility that direct payments could take money out of the system and thereby threaten the viability of specialist SEN services. As I think he said, we have made changes already in the order to try and pick up on that. We have said, for instance, that the local authority has to be satisfied that the making of direct payments in respect of the beneficiary will not have an adverse impact on other services which that authority provides or arranges for children and young people in its area. The existing duties on local authorities and schools in respect of special educational needs still apply, and this covers those receiving services on school action plus.
Again, I understand the points that the noble Lord raises on the interaction of direct payments with school and college finances, and employment policies. We are developing an advice note for pathfinder areas that will cover practical details on implementation, including particular considerations where the provision is to be made in schools. That is one core area that we want to see and test as we work through the pilots in the pathfinder areas, so that we have more understanding of how direct payments can work within school, college and local authority roles and responsibilities for education provision. I understand the point and while I do not have a clear answer now, the whole purpose of the pilot is to try to give us a clear answer—an evaluation which answers those concerns—and then we can decide how best to move on.
What is the mechanism for challenging a local authority’s decision about this? Let us say that a local authority says either, “You, Parent A, are not capable of handling an individual budget, therefore we are not going to give it to you”, or, “We are not going to give you an individual budget because we think it would have a damaging effect on our ability to deliver services more widely”. There are two possible reasons there where they may make that decision. Is it the local authority ombudsman to whom the parent would go if they were not satisfied with that decision, or is there some other challenge mechanism?
Yes, my Lords, there is, and my noble friend raises a good question. It seems that the order allows the local authority to review the decision that is taken. I may need to write generally on the arrangements for the review of decisions. Our view is that we have sufficiently robust arrangements for the purposes of the pilot, so they are in place, but I think I will need to follow up with my noble friend on precisely what they are. However, on the kind of issue that my noble friend spoke about—whether it has worked properly and whether a fair process has been carried out—we certainly think that, again, the evaluation will enable us to see whether the processes that have been put in place are working. If I have more particulars, I will write to my noble friend on that.
The wording of the order, as far as I can see, simply says that if the local authority decides to refuse direct payments or in a review to change the current situation—to reduce the funding, or whatever—the beneficiary or the family can ask it to look again. However, after that, there is nothing as detailed on any recourse to any independent authority. Perhaps the Minister could say a little more about that. Can he also answer my question about the criteria on which a local authority can refuse in the first place to decide that a particular family’s request is not going to be acceded to?
Some of the criteria are set out in the order—for instance, paragraphs 6 to 8 on when the local authority is not satisfied that the recipient is suitable and paragraph 11 on the effect on other services. The question that underlines this comes back to this central tension, which the noble Baroness quite rightly raised, between the duties and responsibilities on the local authority to continue to discharge its statutory duties, the budgets and everything that goes with that, and trying to arrive at a situation where there is more flexibility for individuals and their families. Given that the local authority ultimately has the statutory responsibility and the budget, we have to have a system in place whereby the local authority does not find itself exposed either financially or in other ways in a way that it cannot afford or deliver. From that point of view, that is the whole basis of the system that we currently have. We might get to another point—with our SEN Green Paper and further legislative steps—but until then it is within that framework that we have to operate.
The noble Baroness, Lady Hughes, also asked a question about how these pilots integrate more generally into the work that is carrying on with the pathfinders and the work that is going on with health and social budgets. This pilot on direct payments is being undertaken as part of the broader pathfinder programme in 20 areas made up of 31 local authorities and their PCT partners. They are working together—or we hope that they will work together—to test the use of personal budgets including direct payments for health care and special educational provision alongside the development of the new education health and social care plans. The pathfinder programme is managed by a joint working group across the two departments; the whole recruitment phase to select the pathfinders and their support and evaluation teams is also a joint venture. It is probably also fair to say—this is a broad point that links to the noble Baroness’s questions—that the local authorities and others with whom we are working on these pilots are approaching it with an open mind, trying to see whether it is possible to introduce personal budgets and direct payments and to see what it would look like. It is clearly the case, as the noble Baroness very rightly said, that there may be some local authorities and others who do not particularly relish the thought of change, but the ones in the pathfinder, with whom we will be working to test these issues, will, we think, engage with that constructively.
At the risk of detaining him, may I ask the Minister a further question not unrelated to those which have just been raised where there is a dispute between the parent and the local authority? My question is not about whether to make a direct payment but more about the quantum. Has the department considered the implications for the special educational needs tribunal and whether some provision needs to be made for people to appeal to the tribunal about the quantum of provision? It is not to be imagined that there will be total unanimity all the time between parents and local authorities on what the level of direct payment should be. At the moment, there is provision for parents to appeal to the special educational needs and disability tribunal about the level of provision being made. Since the direct payment is the analogue of that provision, is there going to be an opportunity for parents to appeal to the tribunal where they wish to dispute the level of direct payment the authority is willing to make?
I do not believe that there will be a direct right of appeal to the tribunal in connection with direct payments—I guess that there would in terms of the overall provision, as is currently the case.
I am conscious that I may not have picked up all the detailed questions, for which I apologise. Because I want to address all these concerns, I will go through this with officials tomorrow and, if I have failed to pick them up, I will come back. It is generally the case—which I hope noble Lords will find reassuring—that we will go forward in the way that we have since September through November; we are committed to working closely with the Special Educational Consortium and others with expertise in this area to get these pilots right. I think I am right in saying that, some of these proper detailed questions not withstanding, there is support for these pilots. I hope that we can go forward with them. I will share the evaluation with noble Lords as it comes forward over the next months. With that, I hope that we can agree this order.
Committee adjourned at 6.16 pm.