Increase the Minimum Wage: it’s a no-brainer

This year marks the fifteenth anniversary of National Minimum Wage (NMW). It has boosted pay at the bottom without leading to a loss of jobs, and now has wide industry support as a result.

Before it was introduced, some people were paid as little as £1 an hour.  For example, the Low Pay Unit found someone working in a chip shop earning just 80p an hour. It also found a factory worker earning £1.22 an hour and a residential home worker earning £1.66 an hour.

When the NMW was being proposed, there was widespread opposition from business organisations and from Conservative and Liberal Democrats. Neither David Cameron nor Vince Cable like being reminded of their opposition, as they both claimed that a NMW would inevitably lead to job losses and increased unemployment.

More recently, a number of Conservative MPs have tried to scrap or diminish the policy.  In 2012, Andrea Leadsom MP said that businesses with three employees and fewer should be exempt from minimum wage, as well as regulation like maternity and paternity rights.  Leadsom said:

“I genuinely think we have to focus on deregulation. …..No minimum wage; no unfair dismissal; no maternity or paternity rights; no national insurance or employer pension contributions; a flat rate of tax; no red tape.”

Dominic Raab MP has called for the minimum wage to be suspended for 16-21 year olds. Philip Davies MP said employers should be allowed to pay disabled people less than the NMW. Another group of Conservative MPs have argued that employees should be allowed to opt out of the NMW altogether.

For the first decade of its life, the NMW increased at a faster rate than inflation. NMW generally increased above or in line with average earnings. Following years of rising inequality, the lowest earners began to catch up with middle-earners after the introduction of the NMW.

However, since 2010, the value of the NMW has fallen by 5% in real terms. If the minimum wage had increased in line with inflation over this period, low paid workers would be earning 32p an hour more than they are now. Today the UK has the second highest rate of low pay in the OECD, with more than five million workers paid less than the Living Wage in the UK.

Just as worrying is that the Government has completely failed to ensure proper enforcement of the minimum wage so that vulnerable workers are protected.  Despite annual Ministerial statements that employers flouting the law would be named and shamed, they haven’t named a single one yet.

Despite the pitiful number of enforcement staff, since 2009, HMRC has investigated 10,777 firms for allegedly breaking the law on low pay, collecting £15.8m in arrears payments and imposing £2.1m in fines. In the last 4 years, just two employers have been prosecuted for paying below the NMW, despite an estimated 300,000 people being paid less.

It is little wonder that many frustrated job-seekers feel that they are being undermined by people being paid less.

Of course, there always has to be a balance between wage growth and the impact on employment. However, it is clear to me that urgent action should be taken to restore the value of the NMW and to enforce it. This would actually cut public expenditure, as there would be savings from lower tax credits and benefit payments, as well as increased tax revenues.

It’s a no-brainer really. 

Incapability Assessment

In 2007, the then Labour Government introduced Work Capability Assessments (WCAs)[1] – a new way of assessing an individual’s abilities and disabilities, capacity to work and entitlement to benefits. Quite rightly, the under-pinning assumption was that everyone should be assisted to work if they are able, recognising the support that might be required, and providing the appropriate benefits to help an individual with a disability to play a full part in society.

Unfortunately, since 2010, the coalition government decided that the primary purpose of  WCAs is to ‘get people off benefits and into work’.[2]  However, the government forced through assessment processes that weren’t fit for purpose and contracted out the assessment process to the multi-national company ATOS, whose performance has been a disaster - a catalogue of long delays and poor decisions, causing misery and fear to thousands of people across the country.[3]

Crisis meetings between ATOS and DWP revealed that recruitment failures had left the company with a severe shortage of doctors.[4] This compounded the widespread incompetence in the delivery of work capability assessments which lead to 40% of ATOS’s decisions being appealed, and one in every three appeals being upheld. Thus, one in every seven decisions has been demonstrated to have been wrong. In addition, last May, the courts have determined that the processes disadvantages people with mental health problems, learning disabilities and autism, and, in December, the Court of Appeal threw out the government’s appeal against that judgement.[5]

By May 2011, 63% of initial claims were taking longer than 91 days to process. By the second half of 2011 this had risen to 77% and by the first eight months of 2012 this figure stood at 82%.[6] Last week, the government was forced to admit that ATOS is failing to meet 63 of its 96 Employment and Support Allowance targets - which require ATOS to process all ESA applications within 35 working days.[7]

Things are so bad that the government has stopped publishing performance data. The October 2013 statistical release for Work Capability Assessments did not include either the statistics for the assessment of existing Incapacity Benefit claims, nor the outcome of appeals of initial WCAs. And these statistics still haven’t been released.

This is not surprising given that the July 2013 release had revealed

“to date 39% of all Fit-for-Work decisions have been appealed against. 70% of initial Fit-for-Work decisions appealed against were upheld after challenge; and 30% of initial Fit-for-Work decisions appealed against were overturned after challenge”.[8]

The Department of Work and Pensions’ Annual Report was published in December. It confirmed:

“5.5.1 A particular example of the control challenge around commercial suppliers identified above is the number and quality of Work Capability Assessments undertaken by Atos Healthcare, in support of both Employment and Support Allowance and the programme to reassess Incapacity Benefit claims. The number of assessments has fallen consistently short of demand... 5.5.3 The work by Atos Healthcare to improve quality further reduced the volumes of completed assessments. This further increased the numbers of cases awaiting assessment.”[9]

It’s clear that it is the government and the contractor it chose which need incapability assessments, not the unfortunate people who are trapped in this wretched process.

________________________________________

[1] Welfare Reform Act 2007

[2] Welfare Reform Act 2012

[3]https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/224808/esa_wca_summary_jul13_v0f.pdf

[4]https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/224808/esa_wca_summary_jul13_v0f.pdf

[5] http://www.bailii.org/ew/cases/EWCA/Civ/2013/1565.html

[6] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/265351/work-capability-assessment-year-4-paul-litchfield.pdf

[7]http://www.publications.parliament.uk/pa/cm201314/cmhansrd/cm140106/text/140106w0002.htm#14010631000011

[8]https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/224808/esa_wca_summary_jul13_v0f.pdf

[9] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/264555/dwp-annual-report-accounts-2012-2013.pdf

Still bonkers!

I’ve consistently described the badger cull as bonkers. First, because there is a huge amount of contradictory evidence about whether badgers give TB to cattle or cattle give it to badgers. Secondly, because there is also no scientific evidence that culling badgers actually deals with the problem of TB in cattle; indeed a past trial showed it could actually make things worse.

Now we have the proof that the badger cull has been a complete humiliation for the government, who have turned their backs on evidence-based policy. It has been bad for farmers, bad for taxpayers, and bad for wildllife.

Not only have the pilot culls been incredibly ineffective, they may have actually increased Bovine TB in and around the pilot areas. According to leading independent scientists, the decision to extend the cull together with the failure to cull 70% of the population may have increased the spread of Bovine TB through badger ‘perturbation’. Culling low numbers of badgers, over a prolonged period, during the winter months, is associated with increased TB.

In October this year, commenting on the complete failure to get anywhere near the 70% figure, the Secretary of State Owen Patterson said that ‘the badgers have moved the goalposts.’ He might as well have said ‘the badgers have removed my brain cells’!

Now we have even more confirmation that the very basis of these pilot culls, that badgers are the major cause of transmitting TB to cattle, is flawed. This government has repeatedly over-played the extent to which badgers are responsible for spreading TB across England. Recent research by Prof. Christl Donnelly showed that herd-to-herd transmission of bovine TB in cattle accounts for 94% of cases, while around 6% of infected cattle catch TB directly from badgers. Far from badgers spreading TB, it appears that it is overwhelmingly due to cattle movements.

So, the government needs to stop all cull activity, review the scientific evidence, publish all the documentation – including the costs – of pursuing its flawed policy to date, and start to work to work with farmers, wildlife groups and leading scientists to take forward an alternative strategy to eradicate Bovine TB. This would include tackling TB in badgers focussed on badger vaccination; and enhanced cattle measures, including compulsory post-movement testing, a comprehensive risk-based trading system, and more robust bio-security on farms.

Make everyone a little happier Mr Patterson, by making this your New Year’s Resolution.

Private rented housing

The private rented sector is growing. Between 1999 and 2011/12, the number of households renting privately increased from around two million to 3.8 million.

More people now rent privately than live in social housing. Yet the market is still relatively immature and too often fails to offer what renters require.

For example, the predominance of the standard six-month tenancy agreement is becoming increasingly unsuitable for many in the sector, including a growing number of families who require a stable home to develop community links and from which their children can attend school.

In July, following a six-month inquiry during which we received evidence from nearly 200 individuals and organisations, my committee published its wide-ranging report on the private rented sector. The report contained a number of recommendations to the Government on how to improve private renting.
Government responses to our reports can sometimes be disheartening. I was therefore pleased to see the Government embrace so much of what we said on private renting, not least in its proposal for a tenants' charter, which although perhaps not going as far as I would like, is a step in the right direction.

The Government's decision to conduct a review into the rules around carbon monoxide detectors and smoke alarms is also welcome. Moreover, I am pleased that it intends to examine whether rent repayment orders could be used to claw back rent or housing benefit payments from landlords renting properties found to have serious health and safety risks.

We could not see why a minority of landlords who had little concern for the safety and wellbeing of their tenants should be subsidised by the taxpayer.

The Government still, however, rejected a number of our calls for action. In particular, it missed a key opportunity to give local authorities the powers and freedoms they need to raise standards in their areas.

Councils are already working hard to improve life for those living in the private rented sector. We were impressed, for example, when we visited Leeds in May, by the steps the city council was taking to raise standards in the sector.  There were a number of strands to its approach. These included a voluntary landlord accreditation scheme, which has not only helped to educate members of the scheme about their responsibilities but drive out some bad landlords as tenants moved to the better landlords.
Leeds had also introduced selective licensing in the Cross Green area of the city, leading to a number of prosecutions, reduced anti-social behaviour, and an improved local environment. And it had begun to target neighbourhoods on a street-by-street basis, inspecting properties and providing help, advice and support.

Leeds had achieved these commendable improvements under the current law, but much more could be done if they, and other councils, had greater flexibility.

One of the criticisms of voluntary accreditation is that the worst landlords do not join the schemes, and therefore do not have to meet the standards required. Why not then give councils the power to make accreditation compulsory?

We also heard from Leeds about the bureaucracy around selective licensing: developing the business case and getting it approved had cost the council around £100,000. Other councils told us that they could not introduce such a scheme because their areas did not meet the criteria of low demand or high anti-social behaviour.

Under a localist approach, councils should be given much more discretion over how and when selective licensing can be introduced.

Discretion in the use of powers should be matched with greater freedom in the use of resources. Many hard-pressed councils are struggling to meet the costs of their enforcement work. In its response, the Government accepted that landlords sometimes avoided prosecution because the costs of the council taking them to court were too high.

It was concerned, however, that "over-zealous" councils would issue fines as a way of generating revenue. This belies a lack of trust in councils and contradicts the Government's claims to be localist.
Councils should have greater ability to generate their own resources and should be trusted in doing so. One option would be for them to be given the ability to impose penalty charges for certain breaches without automatic recourse to court action.

There is much to be welcomed in the Government's response to our report.  However, more action is needed if we are to raise standards across the private rented sector and it is to become a viable alternative to owner occupation. A more localist approach, with greater freedoms for councils, is a good place to start.

This article was first published on the Local Government Association Website on 05/12/13 http://www.local.gov.uk/web/guest/first-blogs/-/journal_content/56/10180/5737885/NEWS

Credit where credit’s due

The government has announced that it intends to legislate to cap the cost of credit.

This is a massive u-turn by George Osborne who has persistently refused to act as pay-day loan companies have charged interest rates of 4000% and more to the most desperate lenders.

Credit for this change is substantially due to MPs of all parties who have been campaigning to stop the obscene charges and interest rates being charged on these loans. In particular, I want to credit my Sheffield Central colleague, Paul Blomfield MP, who gathered large parliamentary support for his High Cost Credit Bill only to see it blocked by David Cameron and Nick Clegg in July.

That Bill also gathered big support from outside Parliament, from organisations like Citizens Advice Bureaux, Which and the Women’s Institute. But, instead of being downhearted when the Bill was blocked, the campaign continued with A Charter to Stop the Payday Loan Rip-off, which got even bigger support. Perhaps it was the scale of that lobby which eventually forced change, against George Osborne’s ideological belief that ‘the market should decide’.

Obviously, we will now have to wait to see the detail of what the government is actually proposing. We should expect that the proposals will address all the issues set out in the Charter. We need regulation, and then enforcement, of payday lenders to:

• stop them giving loans to people who can’t realistically afford to pay them back
• stop them repeatedly rolling over loans and creating spiralling debt
• stop hidden or excessive charges
• stop them raiding borrowers’ bank accounts without their knowledge and leaving them in hardship
• stop irresponsible advertising and instead provide clear and transparent information
• require lenders to promote free and independent debt advice, and ensure they co-operate with other services to help people get out of debt.

Not a sure start………

The day before the last general election, when asked for a guarantee that Surestart centres would continue to receive funding, David Cameron said he backed Surestart and that it was a disgrace for anyone to suggest that he would be cutting childcare support.

'Sure Start will stay, and we’ll improve it. We will keep flexible working, and extend it' he said.

Unfortunately, since 2010, parents have faced a childcare crunch with costs up by 30%, while hundreds of Sure Start centres have already closed and many more are likely to close over the next year. Even in the Prime Minister’s own Oxfordshire backyard, 37 Sure Start centres have been earmarked for closure.

It’s important to understand the scale of the childcare crunch of the last 3 years:

• the cost of nursery places has risen by 30% - five times faster than pay
• the average bill for a part time nursery place of 25 hours a week has gone up to £107.
• parents working part time on average wages now have to work from Monday until Thursday before they have paid off their weekly childcare costs. 
• there are 576 fewer Sure Start centres – with three being lost on average every week.
• there are 35,000 fewer childcare places
• the Government’s offer of childcare for some 2-year-olds is failing with 1 in 3 councils not having enough places

All this has taken place during a period when the number of under-4 children in England has risen by 125,000. 

But it isn’t just the parents of pre-school children who are being squeezed. Before 2010, 99% of schools provided access to breakfast clubs and after-school clubs. But more than a third of councils have reported that this is being scaled back in their areas.

These cuts in services and big hikes in charges have come as people have desperately searched for jobs – often part-time – which necessarily require access to affordable childcare.

That’s why I’m backing Ed Miliband’s plan to:

• extend free childcare for three and four year olds from 15 to 25 hours per week for working parents of three and four year-olds, funded by increasing the banking levy
• introduce a legal guarantee of access to wraparound care 8am to 6pm at primary schools

Just making it up?

I’m having a little problem with David Cameron at the moment.

In October, on a BBC's Sunday Politics programme, Mr Cameron said that the additional cuts that local councils will have to make as a result of George Osborne’s latest spending review announcement were ‘relatively modest…. just 2.3%’

Nobody knows where that figure has come from. It’s wildly different from the estimates of the independent experts, who suggest that the additional cut is nearer to 10%. The Treasury and Department of Communities and Local Government both refuse to comment.

So, nearly a month ago, I wrote to Mr Cameron to ask him to explain his statement. No 10 responded quickly saying that Mr Cameron was asking a Treasury Minister to respond. Needless to say, there has been no response, so I’ve had to write to Mr Cameron again asking him to explain.

Is it unreasonable for me to think that the reason for the failure to respond is that the 2.3% figure is an invention? I don’t think so. Mr Cameron has ‘form’ for telling porkies – it’s the parliamentary equivalent of a long criminal record!

Last week, all his speeches were wiped from the Conservative Party’s website – presumably to stop people contrasting the promises he’s made with what he’s delivered.

For example, he’s told us:

• “We’re paying down Britain’s debts.” – when debt will have risen 60% under his stewardship
• “We will have a bigger army for a safer Britain” – when he’s cutting 7000 soldiers
• “It’s just plain wrong to say that this government is cutting benefits for disabled children by over £1,300 a year” – when the Department for Work and Pensions confirmed it is
• “We will stop top-down reorganisations of the NHS” – and then undertook the biggest top-down reorganisation costing £3bn.

It was also revealed last week that pensioners in England face paying more than £150,000 for their residential care before they hit the so-called 'cap' on care costs. This is more than double the £72,000 which Mr Cameron and Mr Clegg have previously claimed as the maximum. In fact, it’s even worse at £159,000 in Yorkshire and Humberside and more than £190,000 in the East Midlands.

Analysis shows that more than nine out of ten elderly people in the region will have died before they reach the 'cap'. Older people and their families deserve better than to be conned in such an underhanded way. 

On probation

The work of the Probation Service gets little publicity when it is done successfully, but is thrust into the spotlight when something goes wrong.

However, re-offending rates are too high and more needs to be done to improve rehabilitation and break the cycle of re-offending. All the research demonstrates that success is built on partnership working between agencies - public, private and voluntary - and on the strength of the relationships between dedicated probation staff and individual offenders.

So, what are we to make of the government forcing through a wholesale privatisation of probation at breakneck speed, trying to avoid proper scrutiny and ignoring its own risk assessment which highlights major concerns with its proposals? Be alert that the government wants private companies to take over the supervision of nearly 9 out of 10 offenders released from prison or undertaking community sentences, including those convicted of domestic violence, burglary, robbery, violence against the person and sexual offences.

First, do we trust the Minister? He is Chris Grayling, who set up and forced through the massively failing Work Programme on the same payment-by-results basis. He has a track record of ignoring inconvenient facts, but being driven by ideology. Or, as he put it “Sometimes we just have to believe something is right and do it”.

Secondly, pilot schemes of these proposals were cancelled by Mr Grayling in his first week in the job. As the Economist magazine put it: “If the Work Programme fails, the cost is higher unemployment; if rehabilitation of offenders fails, the cost is worse: more crime: which is why those now-disregarded pilots were set up in the first place”

Thirdly, the list of private companies who are gearing to hoover up these contracts is dominated by the usual suspects, including G4S and Serco.

You will remember that G4S massively failed at the London Olympics, with security services having to be rescued by the police and armed forces. Further, it has already been found to have billed the government for tracking offenders who were dead, abroad or in prison, and is now the subject of a criminal fraud investigation. And, as I write, in the high court, Mr Justice Mostyn has referred a number of G4S employees for prosecution for forgery and contempt of court in a "truly shocking" case of what he called disgraceful behaviour. Similarly, the Serious Fraud Office has opened a criminal investigation into Serco's electronic monitoring contracts after it was found to have overcharged by millions of pounds for work it could not have done. Astonishingly, Mr Grayling has refused to rule G4S and Serco out of this process.

Under these proposals, it is inevitable that both national and local charities which play a significant role in crime prevention and resettlement of offenders will be totally squeezed out of the service in exactly the same way that they have been in the Work Programme.

Fourthly, because private companies delivering public services are exempt from the Freedom of Information legislation, they can’t be held to account for any failings in the same way that the current probation service can.

Fifthly, it is clear that the government is also trying to hide as much information as it can. For example, it simply refused to say how many offenders these proposals would affect. However, my Labour colleagues submitted Freedom of Information requests to all Probation Trusts in England and discovered that more than 200,000 offenders are covered, including more than 7500 in South Yorkshire, 3500 in Derbyshire and nearly 10,000 in Nottinghamshire.

Sixthly, by its own admission, the government has absolutely no idea how much this will cost. And, despite Ministers claiming this is a “payment only on delivery” system, we now learn that companies will still receive at least 90% of their fee whether they deliver or not.

Seventh, given the way the contracts have been designed, it is inevitable that – just like the Work Programme – companies will focus on the easiest cases and simply park the more complex and difficult offenders, increasing the risk to the public.

Eighth, the proposals create a suffocating bureaucracy between service providers for those offenders – some 25% of the total - whose risk level significantly fluctuates during the period of their supervision. It’s not only bureaucratic and costly, it provides a platform for buck-passing.

My view is that no government should be taking such a reckless approach to public safety. Handing over supervision for serious and violent offenders to the same companies that time and again let down the taxpayer is a recipe for disaster.

People need to be confident that those offenders under supervision in our local communities are not part of some giant ideological experiment.

We should all be worried that the Government have not brought their plans before Parliament to enable proper scrutiny. Instead, it has chosen to rush ahead at breakneck speed and impose its completely untried and untested privatisation on every community.

I strongly support carefully planned and monitored innovative work in our Probation Services – this privatisation isn’t. I am happy to support an approach that allowed faster sharing of best practice as well as even more collaboration with other providers -   this privatisation isn’t.

Rushing headlong into change, with no evidence to support it, is simply irresponsible.

Together

In 2010 the Government announced its intention to pilot Community Budgets as a method of integrating public services. It wasted time and effort by trying to re-invent a similar programme it had inherited.

Basically, Community Budgeting recognises that, if you are going to provide the best services, there must be freedom to redesign services locally. This follows through the policy of best value – focused on continual improvement to provide services that are efficient, effective, equitable and responsive. However, to achieve that, all the players have to be committed, flexible and willing to give up power and resources to get the best outcomes. 

This doesn’t happen easily. There are cultural barriers to overcome at all levels of government and their agencies - as well as service users and voluntary organisations –and new systems to put in place. The challenge of doing this in the current economic and financial climate conditions cannot be underestimated.

The all-party Communities and Local Government Committee, which I chair, has been reviewing the government’s pilots. These were four 'Whole Place' Community Budgets and ten 'Neighbourhood' Community Budget areas. We also looked at the progress of the Troubled Families Programme, the priorities of which—turning around "troubled families" by integrating public services and tailoring them to families—came out of the Community Budget programme.

We found that the pilots are already demonstrating the clear potential to facilitate cheaper, more integrated and more effective public services. However, achieving that potential requires strong local leadership and a commitment from central government to facilitate local flexibility. It also requires a framework for agreements on sharing the benefits of investment.

Getting the biggest benefits will also require risk-taking – including the risk of failing occasionally. There isn’t a successful company in the world which, even after doing all the essential research and analysis, doesn’t occasionally get a product wrong and have to withdraw it and go back to the drawing-board. Public services are no different, but politicians, the public and the media have to be a bit more grown-up about this. There aren’t any successful organisations which rely on a blame culture.

You can read more about the Committee’s findings at:

http://www.parliament.uk/business/committees/committees-a-z/commons-select/communities-and-local-government-committee/news/cb-report-substantive/

Trusted with our NHS?

Back in 2010, David Cameron told us how he could be trusted with the NHS. All the evidence now tells us that he was wrong. The NHS is going backwards:

• Accident and Emergency is already in crisis with almost 1 million patients waiting longer than 4 hours in A&E over the last 12 months.
• There are over 5,000 fewer nurses since 2010
• £3 billion has been wasted on a reorganisation nobody wanted and nobody voted for.

The government has completely lost its way on public health

• David Cameron promised to get tough on smoking but, instead, just caved in to big tobacco and vested interests.
• 41 organisations have quit the Government’s public health responsibility deal, including Cancer Research UK and the Faculty of Public Health

 The government is now planning a massive switch of health resources from north to south, from urban to rural and from the poorest to the wealthiest communities. This month, University of Liverpool researchers said the proposals would penalise

• areas where people die earliest
• places with the worst quality of life
• areas hit hardest by council cuts 

Prof. Paul Johnstone, Public Health England’s regional director in the North, confirms that the biggest causes of early death under the age of 75 in England are cancer, heart disease and stroke, lung and liver disease, with figures showing most areas of the North are worst hit by premature deaths. Eleven out of 15 council areas in Yorkshire have among the worst rates of premature death from lung disease in the country and nine out of 15 have among the worst records on early deaths from heart disease and cancer. Five out of the 15 have the among the worst records on early deaths from liver disease

Yet the Yorkshire Post confirms that every part of the NHS in Yorkshire would lose out under the changes, costing the region £416m in total and the North £722m overall. Sheffield alone would lose health funding of nearly £50m every year to healthier and wealthier communities in the south.

And Cameron and Clegg continue to break their promises on transparency by:

• still refusing to publish the NHS Risk Register
• resorting to unprecedented measures to cover up the warnings they were given about their reckless re-organisation.
• refusing to extend Freedom of Information legislation to cover private providers delivering NHS services, against the recommendations of the regulator, Monitor.

Do I trust them with the NHS? No.