Welfare Reform Bill

My Lords, I thank noble Lords for setting out their concerns. By this stage, we are all familiar with the arguments that have been made for and against the contracting-out of decision-making that could lead to sanctions under Clause 15. However, I do not think that enough attention has been paid to the potential benefits of moving decision-making of this kind closer to the organisations that deal with customers on a day-to-day basis. I do not believe that these benefits can be dismissed; they should get the measured consideration that has been the hallmark of the debate surrounding the Bill. Decision-makers make their best decisions when they have the proper, accurate and timely information needed. There should be no argument about that. There is a real desire among noble Lords and stakeholders that decision-making be improved and decisions be right first time. Locating decision-makers within provider organisations could make the process of information-gathering faster, easier and more accurate. Having two different organisations, one responsible for support and the other for conditionality, also weakens the link between the support that customers receive and their responsibility to engage with us. Responsibility is not an added extra to ESA that should be dealt with separately—far from it. It is an integral part of ESA. For sanctions to be a proper incentive, customers must realise that there is a fundamental connection between the work-related-activity component of their benefit and work-related activity. Of course, there are questions to be answered. How will it work in practice? How will we ensure that the quality of decision-making is upheld? How will we enable contractors to use this tool without abusing it? It is precisely those kinds of questions that need to be answered before we can contract out decision-making that would lead to sanctions. In the same way that we piloted Pathways to Work, learned from the pilots and built upon that approach, we would pilot the contracting-out of decision-making leading to sanctions under Clause 15, learn the lessons that the pilots taught us and build upon that. There are potentially a number of benefits of contracting out decision-making leading to sanctions. Given the strength of feeling on this issue and the questions yet to be answered, we acknowledge that we need do more work with stakeholders and providers in this area. We will not seek to retain the powers in the Bill to enable us to contract out decision-making that could lead to sanctions.