The level of pensioner poverty has declined markedly since 1997. However, there are still 2 million pensioners in poverty and 1.1 million who live on below 50% of median income. The Committee considers this to be unacceptable, and in this report looks at what more the Government could do to lift pensioners out of poverty. Pension Credit has lifted large numbers of pensioners out of poverty. Take-up of Pension Credit improved rapidly after its introduction, but has since levelled off with many eligible pensioners still not claiming. Despite the best efforts of the Pension Disability and Carers Service (PDCS) it is seeing diminishing returns for its efforts. Take-up of Housing Benefit and Council Tax Benefit amongst pensioners has also declined since 1997. Improving take-up of all three benefits would markedly improve pensioner poverty. Local Authorities need to work much more closely with PDCS, to ensure that information on people who may be eligible for Pension Credit, Housing Benefit and Council Tax Benefit are (with permission) exchanged in both directions. This is not done at present and should therefore be trialled and depending on its success applied nationally. The Department has put a lot of effort into encouraging pensioners to claim Pension Credit, then directing them towards other benefits. The Committee concludes that there should be a single phone line for all three benefits.The lack of data PDCS collects on Pension Credit take-up, especially amongst vulnerable groups is a disappointment for the Committee and makes it very difficult for them to suggest ways to effectively target these groups.The automaticity pilots introduced in the Welfare Reform Bill is welcomed as is the Department taking a long term approach and seeking to find innovative ways to improve take-up. Among other benefits the Personal Expenses Allowance (PEA) is looked at, and also the differences between Disability Living Allowance (DLA) payable to those who become disabled under 65, and Attendance Allowance (AA), payable to those who become disabled after the age of 65. The Committee were impressed by the model used by Service Canada, which provides advice on all federal benefits, and provides signposting to other services. While no pensioner should be expected to work after 65, many would like to. Working longer can allow them to maintain social contacts, and to defer claiming a pension, something that can have a positive effect on their future income. The Committee calls for the Default Retirement Age to be abolished and for protection from discrimination for older workers to be strengthened, to ensure that every pensioner who wishes to can continue working. Past recessions have led to disproportionate numbers of older workers over 50 losing their jobs and never working again. The Department must not allow this to happen again.
This report welcomes the improvements in retirement income that the new Single-tier State Pension will bring. However, the key to the policy's successful implementation lies in the Government informing the public as soon as possible about how it will affect individuals. The Committee criticises the Government for hampering its scrutiny of the proposals. The Government not only imposed an extremely tight timetable, but brought forward the implementation date by a year, after the Committee had completed taking evidence. The Committee says that the Government must work with them to ensure the transition is as smooth as possible and that Defined Benefit pension schemes do not suffer as a result. The Government should also develop and publish a clear explanation of how means-tested support, including passported benefits, will operate under the Single-tier Pension, and the transitional protection that will be put in place. Many women born between 1952 and 1953 believed that they would suffer a double adverse effect on their State Pension income, arising from the increases in their State Pension Age combined with their ineligibility for the Single-tier Pension, if it was introduced in 2017 as set out in the White Paper. The Government should clarify the position. Some women did not build up their own NI record because they had an expectation that they would be able to rely on their husband's contributions to give them entitlement to a Basic State Pension. The Government should assess and publish the cost of allowing women in this position who are within 15 years of State Pension Age to retain this right
The Government has set itself the challenging target of halving the number of children living in poverty by 2010-11 and eradicating child poverty by 2020. With 2010 fast approaching, Ministers are still committed to the targets, and the Committee wanted to ascertain whether DWP has the right measures in place to meet its objectives. Significant progress has been made, but the target remains challenging: there are still 2.8 million children living in poverty and the most recent data shows a slight increase in this number. The Committee is convinced of the damaging effect of poverty on a child's self-esteem and expectations, and also its effects in contributing to social exclusion. Children growing up in poverty are also more likely to have poorer health and poorer educational outcomes. There are groups of children who have a much higher risk of growing up in poverty, for example if they or a parent are disabled, and there are higher poverty rates amongst Pakistani, Bangladeshi and black children. Getting parents into sustainable work should be the focus of the strategy to lift them and their children out of poverty, but there are concerns that the Jobseekers' Allowance regime is not sufficiently flexible to reflect the complexity of lone parents' lives. To eradicate child poverty by 2020, the Government needs a long-term strategy on benefit income for those who are unable to work. If benefits are uprated in line with inflation, the gap between the incomes of those in work and those on benefits will only get wider, as benefits will not keep pace with earnings. As poverty is measured as a percentage of median earnings, the implications for the 2020 target, in particular, are serious.
The Universal Credit pilots (Pathfinders) will begin in the north west of England in April 2013 and full national roll-out is due to start in October 2013. The Government has designed a welfare system which should help ease the transition from benefits to work, but significant concerns remain about the potential impact of the changes on some of the most vulnerable benefit claimants, especially the online claims system and the proposed single monthly payment. The Government needs to reflect on its ambitious implementation timetable. Under Universal Credit, payments to cover the costs of rent will go to the benefit claimant, rather than direct to the landlord. This is a major change and the Committee therefore recommends that, during the initial phases of implementation, claimants who currently have their housing costs paid to their landlord should have the option to continue with this arrangement. The Committee also notes that it has not yet received sufficient evidence to satisfy itself that the Government will achieve its stated aim of ensuring more generous support for the disabled. The Government plans to calculate monthly Universal Credit payments by using information taken from data feeds from HMRC's new Real Time Information (RTI) system though there are concerns about that programme. The Committee, further, recognises that there is likely to be a significant increased demand for advice services during the four-year transition to Universal Credit. The report also comments on closely-related policy areas, including: the conditionality and sanctions regime; passported benefits; localisation of council tax support; localisation of the Social Fund
A report that discusses the problems experienced in the child maintenance system since the establishment of the Child Support Agency in 1993. It covers the changes in legislation; the introduction of a 'twin-track' approach with the three year Operational Improvement Plan and the establishment of the Child Maintenance and Enforcement Commission.
The Future Jobs Fund (FJF) was established by the previous Government in April 2009 as an emergency response to the rise in youth unemployment in 2008 and 2009. Its aim was the creation of job opportunities for young people on Jobseeker's Allowance and adults on any benefit who lived in areas with particularly high rates of unemployment. The initial target was to create 150,000 temporary (six-month) posts by March 2011, to ensure no young people were left behind due to unemployment. The scheme was then extended and expanded with the aim of creating 200,000 temporary posts by March 2012. In May 2010, the Coalition Government cancelled the extension of the programme as a measure to address the public spending deficit, and announced that no new entrants would be permitted beyond March 2011. The new Government's view was that the FJF was a high-cost programme, with each job costing up to £6,500, and that similar results and job sustainability could be achieved through its new overarching welfare-to-work scheme, the Work Programme, to be launched in June 2011. The Committee states that it was too soon to assess whether the Future Jobs Fund has been successful in supporting unemployed young people in finding permanent employment. The Committee further states, that the Government needs to learn lessons from the FJF and ensure that the Work Programme includes sufficient levers and financial incentives to prevent providers ignoring young people who are more difficult to place in work. Also that apprenticeships may not be the most suitable route into employment for those young people at the highest risk of long-term unemployment and that alternative provision should be made available.
House of Lords reform is a large and thorny issue on which it has proved very difficult to get political consensus. This inquiry focused on the incremental changes that could possibly be achieved outside the wider reforms that are doubtless required. Creating the power to remove Peers who have actually broken the law of the land and to remove persistent non-attendees will enjoy widespread support and would indicate that the unelected chamber was not opposed to sensible reform. Establishing a consensus about the principles that should determine the relative numerical strengths of the different party groups in the House of Lords, and for codifying such principles, is probably the most contentious of all the issues considered, but it is also the most crucial to any further progress. The Government and political parties in the Lords need to set out their positions on this matter and to engage in dialogue that will establish a consensus before the next General Election, so that both Houses can act upon an agreed reform
The Environmental Audit Committee points out that there is a large green finance gap. Investments are currently running at less than half of the £200 billion needed in energy infrastructure alone by 2020 to deliver national and international emissions reduction targets. And stock markets could be inflating a 'carbon bubble' by over-valuing companies with fossil fuel assets that will have to be left unburned in order to limit climate change. The Bank of England's Financial Policy Committee should seek advice from the independent Committee on Climate Change to help it monitor the systemic risk to financial stability associated with a carbon bubble. To address the green finance gap, the Government must provide a joined-up, stable and certain policy framework that maintains investor confidence and helps markets price in the cost of carbon. The Green Investment Bank has made a good start but does not currently have the power to borrow in order to leverage and enlarge its investments - limiting its potential to fill the green finance gap. Take up of the Green Deal has been poor and the Government must make it simpler and more attractive to households. The European Commission's (EC) proposed new rules for State Aid in the energy sector could limit the finance available to support community owned energy schemes. The Government must play a central role in agreeing ambitious and binding international commitments on climate change, both in the EU and in the run up to the UN climate talks in Paris 2015.
The Work Programme will be implemented nationwide from June 2011, and will replace the range of existing programmes to help benefit claimants find jobs. It will be delivered on a regional basis by a framework of prime contractors, the majority of which will come from the private sector. These prime contractors will be paid by the Government based on their results in achieving sustainable employment for jobseekers. Prime contractors are expected to subcontract service provision to specialist local organisations, including voluntary sector providers. There is a risk that, even under the payment-by-results model, Work Programme providers might focus on the clients they assess as being easier to help. The Committee recommends that the Government keeps the payment model under review and assesses the outcomes for all participants. The Work Programme creates a significant financial challenge for prime contractors. This might lead to some clients receiving lower quality support and to significant costs to the Government in responding to service failures. The Government should put contingency arrangements in place to ensure the continuity of provision for clients. The Department for Work and Pensions (DWP) should remind prime contractors that a key aspect of their role is to bear financial risk, rather than passing it on to subcontractors disproportionately. Contracting arrangements need to ensure that subcontractors are fairly managed and that prime contractors are able to hold subcontractors to account for poor performance. The DWP must establish robust and independent arbitration and sanctioning arrangements.
The Work and Pensions Committee supports the Government's objectives for the incapacity benefit (IB) reassessment, which are to help people with disabilities and long-term health conditions to move back into employment, while continuing to provide adequate support for people who have limited capability for work or are unable to work. However, the report finds that the Government's positive messages about the IB reassessment are not getting through to the public. The report argues that that the Government should be more proactive in explaining its aims for the process and in emphasising the range of support which will be available. Current incapacity benefit claimants are being reassessed to decide whether they are able to work. The inquiry looked in detail at the Work Capability Assessment (WCA), the test which is used to assess whether an incapacity benefit claimant is capable of work, or work-related activity. WCAs are carried out by Atos Healthcare as part of a contract with the Department for Work and Pensions. It is widely accepted that the WCA was flawed, in the form in which it was introduced in 2008 for new ESA claimants, leading to a high proportion of inaccurate assessments and poor decisions by Jobcentre Plus. Many of these decisions were overturned at appeal. The report acknowledges that many welcome improvements have been made to the reassessment process as a result of the review by Professor Malcolm Harrington and the trial of the process carried out in Aberdeen and Burnley, before it was introduced nationally.
The Work and Pensions Committee report that there is still a level of uncertainty around the impact of the proposed changes to Housing Benefit and their cumulative effect on households. The report examines the wide-ranging reforms to the Housing Benefit system proposed by the Government, and in particular for claimants in the private rented sector, in receipt of Local Housing Allowance. The Committee accepts the Government's desire to slow the sharp rise in Housing Benefit costs, particularly in the private rented sector, and thereby to influence the private rental market. However, it expresses some concerns about the availability of private rented accommodation in certain localities, which tenants are likely to be able to secure at the new Housing Benefit levels.
The introduction of auto-enrolment makes rigorous pension scheme governance essential. This Report calls on the Government to reassess the case for establishing one body with sole responsibility for regulating workplace pensions. There are concerns over current gaps in regulation and the potential for further gaps to arise as a result of now having three regulators, the Pensions Regulator; and the new Financial Conduct Authority and Prudential Regulation Authority, set up to replace the FSA. The Report argues that a single regulator is necessary to ensure that all members of workplace pension schemes are adequately and consistently protected. It also highlights that deferred-member charges and member-borne consultancy charges have the potential to cause serious consumer detriment. It recommends that both are banned by the Government, if significant progress is not made in the very near future by the industry towards ending them. There is particular concern about member-borne consultancy charges and those charges applied to deferred members - people who stop contributing to their pension scheme. The trend towards lower pension scheme charges is welcome. However, a good average is not sufficient and there is potential for consumer detriment in schemes that persist in retaining high charges. The Government should also regularly review its policy on capping charges for auto-enrolment schemes. Consumers are also continuing to lose out when they buy annuities because pension providers are not doing enough to ensure people are aware that they can shop around for the best annuity rate rather than being obliged to buy an annuity from their pension provider.
This report examines contracted employment programmes and focuses in particular on the prevention of fraud, the treatment of subcontractors, and ensuring fair treatment of customers. The Committee found that levels of detected fraud in contracted employment programmes are low, but feels that there is no room for complacency; the frauds uncovered to date have highlighted the existence of weaknesses in the system which could be exploited. Processes for the detection of fraud must be rigorous and robust. In addition, the financial penalties for providers who have fraud in their organisation are not severe enough. The report calls for customer rights to be given a much higher priority, and for a universal, monitored, and enforceable customer charter to be introduced. It also calls on the Department to carry out a "Customer Survey" of customers of contracted employment programmes to enable standards of customer service to be compared between providers and with Jobcentre Plus. The quality of provision to vulnerable groups, particularly those with disabilities, is another area of concern as providers are having to work with customers with more severe barriers than they had anticipated. The Report examines several examples of potential mistreatment of sub-contractors including allegations of the operation of a cartel, and notes that while it does not know how widespread unfair treatment of subcontractors is, neither does the Department.
Access to Work (AtW) is an important element of specialist employment support for disabled people. It is unique in providing help to people already in, or about to start, mainstream work. It has the potential to be an extremely effective model, helping to address the substantial gap between the employment rate for disabled people and that of the rest of the population. Where it works well, it transforms the lives of disabled people, many of whom would be unable to work without it.There is strong evidence that AtW currently supports only a minority of disabled people whom it might benefit. There is a misperception that the sole purpose of AtW is to provide physical aids, equipment and transport for people with sensory impairments and physical disabilities; consequently relatively few people with other types of disability, and different support needs, currently use the programme. In scaling up the programme DWP needs to address this imbalance. Its priority should be supporting a much greater number of people with mental health problems, and intellectual, cognitive and developmental impairments, including learning disabilities and autism spectrum disorders. AtW's focus should remain on removing barriers to employment for the full range of disabled people who can benefit from it. DWP should make a strong and evidence-based case to HM Treasury for substantial additional funding for AtW and then aim to increase take-up through much more high profile marketing, and proactive promotion of AtW, including through Jobcentre Plus Work Coaches and contracted employment services providers.
The Committee's report examines the Government's proposals for welfare reform set out in its Green Paper 'A new deal for welfare: empowering people to work' (Cm 6730, ISBN 0101673027) published in January 2006. The proposed reforms are designed to help more ill or disabled people move into employment, thereby reducing the number of people claiming incapacity benefits by one million within a decade. Issues discussed include: the future rollout of the 'Pathways to Work' scheme; the introduction of a new benefit called Employment and Support Allowance (ESA) to replace incapacity benefit from 2008; support for ill or disabled people to move back into work; employer attitudes; the involvement of healthcare professionals; the role of the private and voluntary sectors; the costs and resources for the reform programme. The Committee welcomes the Government's aim to reform the welfare system in order to help support more ill or disabled people move back into work, but argues that if its reform programme is to be successful it will need adequate resources, particularly over the next few years, and further detailed work in co-operation with key stakeholders including employers and disability organisations.
There remains worrying uncertainty about the new Universal Credit (UC) IT system. This includes how it will work, how much it will cost, and who will develop it. National roll-out of UC was due to begin in October 2013. But problems with IT systems meant that major changes to the implementation timetable were made in July and then again in December 2013. Currently, UC claims are still limited to 10 Pathfinder Jobcentres. New claims are not expected to be extended to the whole of Great Britain until 2016; and the bulk of existing claimants will not move over to UC until 2016-17. Only 4,280 people were claiming Universal Credit by December 2013 and the majority of these claims were of the simplest nature. By comparison, in the same month, 1.22 million people were claiming Jobseekers Allowance. The DWP is developing a new 'end-state solution' for UC IT which will eventually replace the IT system currently in use in the UC Pathfinders. This is costing £25-32 million to develop up to November 2014, with no indication of how much more it will cost in the long-term. The Government has hampered the Committee's scrutiny of UC implementation by not providing accurate, timely and detailed information. And there is a lack of detail on how support for vulnerable people being provided in partnership with local authorities, housing providers and the voluntary sector will operate. Delays to UC implementation mean that local authorities will now administer housing benefit for much longer than anticipated.
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