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Outsourcing: DWP Telephone Services

Volume 816: debated on Tuesday 30 November 2021


Asked by

To ask Her Majesty’s Government what assessment they have made of the efficacy and efficiency of outsourcing the telephone services provided by the Department for Work and Pensions.

The DWP utilises suppliers to deliver some telephony services for an efficient and effective customer service. Decisions to outsource are subject to value for money assessments and ministerial approval processes for new contracts, alongside Cabinet Office approvals and HMT business case governance. Efficacy and efficiency are further assured through the DWP’s effective contract management on an ongoing basis. The DWP’s contracted suppliers for contact centre services have largely met their key performance indicators during the term of the contracts.

I thank the Minister for her response. However, the staff union PCS reports that outsourcing has led to excessive call times and to vulnerable claimants often getting questionable advice due to poorly trained private sector staff being unable to navigate the complex system, and that Serco-run services have routinely had to call on support from in-house staff due to Serco’s inability to cope with call volumes. Can the Minister say what performance standards are in the Serco contract, particularly regarding call length, quality of advice and ability to cope with demand?

The time taken to answer calls is checked, and the target is 90%. As I said, those key performance indicators have all more or less been adhered to. There is also a performance indicator to ensure the investment in infrastructure is there, which is very important. DWP has gone in to help contractors where there are issues—in particular, recently, with staffing.

The department is addicted to outsourcing. The Government have allocated nigh on £3 billion to the Restart collection scheme for universal credit claimants, to be delivered by private companies under payment by results. Will the Minister tell us how she will ensure that previous mistakes will not be repeated—with financial incentives leading to so called “parking” and cherry picking, and hard-to-help claimants, many of whom were most in need of help, receiving little or no support?

My Lords, I do not see that picture within the DWP telephony services that are outsourced. The Government recognise that some public services are better delivered through private companies than directly through the public sector. It is a matter of looking at all services individually and deciding which are the best to outsource.

My Lords, what steps have been taken to end the use of 200 premium-rate phonelines, admitted to by the DWP, when these cause those on the lowest incomes to pay up to 55p per minute for help and advice on claims?

My Lords, not all DWP telephony lines are outsourced, as we know, but all DWP telephony lines are freephone 0800 numbers.

My Lords, given the importance of these services to the clients, can my noble friend tell us how often performance is reviewed, and with what result?

Several reviews take place in the course of a contract to assess performance against key performance indicators. Performance is reported and monitored daily and reviewed monthly during formal business unit reviews. These are led by DWP contract management teams. Wider delivery considerations to inform efficiency and effectiveness are reviewed on an annual basis through financial management reviews and quarterly formal reviews.

My Lords, on 4 November, in a Written Answer, the Minister for Pensions gave figures for call-answering rates on DWP helplines from January to September. These suggest that helplines managed to answer 90% of calls to do with debt payments, but, every month, a quarter of calls on child maintenance and 40% of calls on state pension changes went unanswered. Does the Minister think that is acceptable?

No—nothing below the performance indicators is acceptable. That is why we continually challenge the delivery of all our systems.

My Lords, clearly the lack of training seems to have led to many claimants receiving incorrect answers when, for example, querying their state pension. Could my noble friend explain to the House whether the department has done any mystery shopping of its externally sourced claim lines, and what happens if suppliers do not meet their key performance indicators?

My noble friend brings up the very important issue of training. All staff working for outsourced companies get the same training as DWP, and they will continue to get that. If they are looking after particularly vulnerable clients at any time then they will get specialist training. As for mystery shopping, yes we do: the DWP continues all the time to check out those call lines and make sure that they are being regularly performance managed.

My Lords, in challenging the delivery of systems in order to get the proper performance indicators, how many times have penalty clauses been invoked and for what reasons? We all remember the debacle around Concentrix and HMRC several years ago.

My Lords, I am not aware of any penalties as such, but if a supplier consistently fails to achieve performance levels then service credits will apply to our most important Civil Service levels. These are designed to be an incentive to deliver services rather than a financial penalty. That is the way that we perform those services.

My Lords, I declare my interest as set out in the register. Telephones aside, does my noble friend agree that there are real opportunities for DWP to deploy new technologies across all its activities? Is she aware of the proof of concept that the department ran of putting benefits in a tokenised form on a distributed ledger technology platform delivered through a smartphone device—cost out, empowerment in—for benefit recipients? Does she agree that it is time to run a pilot for that scheme and to run proofs of concept for new technologies right across all DWP’s activities?

My noble friend is right that we need to look at new technologies. The DWP is always exploring new solutions to support citizens who use our services. The department will be using advice from the National Cyber Security Centre, which published a White Paper in April 2021 on the use of DLT suggesting that further developments are needed. For now, there are alternative technologies that usually provide comparable or better solutions.

My Lords, the Government have handed public services to corporations such as Serco, which has a history of abuses, failures, overcharging and even a fine by the Serious Fraud Office. Will the Minister publish the DWP’s cost-benefit analysis, and related correspondence, for outsourcing its telephone services so that we can all make an assessment of its diligence in dealing with failed providers?

My Lords, the Government recognise that some public services are delivered better through private companies than directly through the public sector. A delivery model assessment methodology, as defined in the Cabinet Office Sourcing Playbook, helps to determine whether the public or private sector is the best placed to deliver a public service. Most of those issues will be on GOV.UK.

My noble friend asks a difficult question because telephony suppliers flex staffing resources up and down in line with volume expectations and are paid accordingly. The contracts are volume based and demand driven, and we pay on a basis of calls answered. The total contract price for the last contract, which is three years plus one, was £174 million over those four years.