23 January 2007

Jim Murphy MP

Minister for Employment and Welfare Reform

Net Gains – Future of Benefit Delivery

Dods, London

Tuesday, 23 January 2007

[Check against delivery]

I’m grateful to Dods and SPSS for hosting today’s event – the first in a series of seminars to examine the future of welfare in this country.

Across Government, we are taking a step back to look at where we’ve come from; but more importantly, where we are going.

Rapid globalisation and demographic change present new challenges for welfare systems across the world. The role of a modern, active welfare to work strategy will be crucial in continuing our efforts to tackle poverty, in supporting the family, promoting social justice and ensuring people have the economic security they need in an ever changing world.

As part of the Prime Minister’s wider policy review process, we have asked David Freud to lead a wide-ranging review of our welfare to work strategy.

These seminars are designed to support that process. To ask the difficult questions about where things need to improve; where we haven’t yet got the balance right – or where circumstances have changed and a new response is needed to the challenges we face.

This is not about abandoning what we have already done. It is about continuing the journey that we set out on 10 years ago – to ensure that we aim high, for every single person regardless of social, economical, ethnic, or educational background.

We have never shied away from the radical option. If we rewind 10 years, would we ever have believed we would be where we are today?

A decade ago, with nearly 6 million people in this country dependent on benefits, could anyone have imagined that we would ever dream of setting ourselves the goal of an 80% employment rate?

A decade ago, would anyone have imagined a consensus to invest in employment support for the sick and disabled, so that they had every chance possible to gain fulfilment from full participation in the labour market, alongside a duty to take up that support?

A decade ago, could anyone have imagined a service where one agency, Jobcentre Plus, offered the gateway to not only financial support, but personal one-to-one advisory services, training schemes and work-related health programmes – all this at the same time as administering 15,000 new claims to benefit every single day?

Sometimes when I reflect upon what we have achieved so far I’m conscious that I sound like some kind of quasi-social historian, rather than a politician with ideas about the future as well as an analysis of what was wrong in the past. But this is simply to set the context for what lies ahead; the future is what these seminars are about.

After 10 years in office we cannot put our feet up and say job done. We have to look to the next 10 and anticipate what lies ahead. Yes, we have come far, but there is still so much we can do. And as we were radical in 1997, so we must be as radical in 2007.

Over the next few weeks, I will be holding seminars on many of the challenges facing welfare in the next ten years. On the challenges of globalisation and the future of the labour market; on the question of incentives and conditionality at the heart of the future contract between the citizen and the state; on the role of faith-based groups and other third sector partners; on tackling the pockets of worklessness and poverty in our cities.

But today’s seminar is perhaps the most fundamental of all.

The system of benefits and the way in which they are administered is at the heart of the welfare state. It is the structure from which the vast majority of welfare provision flows. And it has the potential both to constrain and empower change.

I have three key aspirations which I wish to share with you today.

Firstly, I believe we need a simpler benefit system – easier for people to navigate; and to understand what is expected of them and why.

Secondly, we need a debate about how to make better use of technology and sharing of information to halve benefit processing times over the next ten years.

And thirdly, with a simpler and more efficient system of benefit delivery in place – we need to use some of the time saved to further embed the work first mentality into the benefit system.

Let me take each of these in turn.

Firstly, simplification.

Our benefit system is one of the most complex in the world. In isolation, each additional new benefit make sense, but the culmination of this complicated set of arrangements can seem at best frustrating; and at times border on bamboozling.

Currently, just for a single person, there are over 20 different rates of Income Support which they could be entitled to depending on their circumstances. Sometimes these complications cause real anguish at crucial points in people’s lives. On one occasion, notifying the relevant government departments of a bereavement took 44 separate contacts over a period of 180 days.

This really begs the question of what we can do over the next 10 years to create a system which still caters for individual need, yet does so in an efficient, effective way which can be easily understood – a system where rights and responsibilities are clear to both those administering benefits, and those receiving them.

In the second part of today’s seminar, Roy and Kate will be sharing their views on the concept of whether a single working age benefit would be able to deliver those outcomes.

I believe this is one of the most crucial questions for the future of benefit delivery over the next ten years. The potential of a radically simpler benefit system is unquestionable – but we have to ensure, in reaching for that goal, that we maintain the flexibility within that system to tailor welfare to the specific needs of individuals.

Secondly, in the 21st century, we should be using 21st century technology.

This may seem an obvious point, but I feel that government can sometimes shy away from technological change, until it is so tried and tested that it becomes out of date. In an era of wireless broadband, it sometimes feels like we still have a typewriter and blotting paper mentality.

We have to go further in using the potential that technology provides. We can learn from the private sector and their innovations. Of course government often faces challenges of greater scale and complexity but we do have to innovate if we are to match our customers demands.

One key way in which technology should improve our efficiency, is in effective information management systems. Successful benefit delivery is dependent the ability to share information, to get it right first time. If we can do this, it has the potential to revolutionise customer service, not just in benefit delivery but across the public sector.

We are finding ways in which we can share information better. Along with Revenue and Customs and the local authority in Wallsend, for example, we are improving the ways in which the interaction with JSA, Tax Credits and Housing benefits are affected when people move in and out of work.

But there is much more that can be done if there is the consensus to do it. I know that there has been a lot of debate over this very issue recently. There is a clear trade-off between meeting customer demand for personalisation and joining up of services versus ensuring that we maintain appropriate protection of privacy. But it is not about creating a big brother state; it is about seeing government, as it should be seen, as one entity focussed on our customer’s needs.

The recent review by Sir David Varney has set the agenda on this; only by following it can we really hope to deliver the kind of improvements necessary to have a world class public service.

I have said much this afternoon about ways in which I believe that Government has to improve its service to customers in the delivery of benefits. But the future of benefit delivery can not simply be about what the State will do for those who need benefits – it also has to be about what individuals will do in return for that support.

I believe we need a radical new approach in the way people think about the benefit system – particularly around Jobseeker’s Allowance. Instead of becoming unemployed – applying for benefit and then meeting work-related conditions in order to stay on benefit; I believe people who become unemployed should take steps to return to work first – and then receive support from the State for doing so.

So my third aspiration, is to see a system where pen cannot be put to paper on a benefit claim, until a work focused interview is completed, and work related activity has already begun. Work search first; benefit second.

At the moment, the application for benefit and starting the process of work related conditionality have to be concurrent for the benefit to be processed within an acceptable time. But in the 21st century, technology should allow us to process benefit claims much faster than we do today. When a bank loan can be applied for in a matter of seconds, when a mortgage can be agreed at the touch of a button on the internet, why does it take 2 weeks to process a benefit claim?

I want to see the time it takes to get benefit halved over the next decade. Through the technological advancements, I am convinced that this is possible.

This could then provide us with the opportunity I feel we need to further embed the work first approach into the system. Conditionality requirements could be put in place not just for continued receipt of benefit, but to claim benefit in the first place.

This is not punitive: we would deliver benefits in exactly the same time, or probably a shorter time than we do today. But we would also be giving people the earliest opportunity to focus on their potential and choices within the labour market; and giving the taxpayer a fairer deal for their money.

I therefore believe that the more ‘work first’ can be entrenched within the structure of benefit delivery itself, the better the outcome for the customer, the taxpayer, and society as a whole.

So, these are my thoughts about where we should be going over the next decade. The ideas I advocate are not easy, there would be many hurdles to clear, and some difficult decisions to be made. I’m sure that not all of you here will agree with me. But that is why we are here; to have a debate, to test each other and to find solutions to the challenges that lie ahead.

Much has changed in the past decade. Much will change over the next.

And while our challenges are different in nature they are similar in scale.

But they need to be met if we are to achieve that historic demand of the right to work for all.