08 July 2005
The new benefits minister is intent on reforms that will raise the employment rate, overhaul housing allowances and fix the DWP's IT systems. Mark Conrad reports
James Plaskitt has just been handed one of the toughest jobs in government, but he shoulders the responsibility with barely concealed delight.
He sits upright, attentive and beaming in his interview room in Whitehall's Richmond House, but as he talks through his 'key challenges', it's difficult to imagine what he has to smile about.
It isn't enough that the amiable MP for Warwick and Leamington, benefits minister since Labour's May election victory, has the unenviable task of putting right the troubled Child Support Agency. He also has responsibility for many of his party's crucial yet contentious third-term welfare reforms.
He must kick-start an ambitious plan to achieve an 80% employment rate across the UK by helping a million people off benefits and into work. He must continue the reform of housing benefit, reduce the level of benefit 'fraud and error' across the Department for Work and Pensions and try to persuade other European governments to deal with long-term youth unemployment in similarly successful ways to those that Britain has used.
He has a role to play in crucial pension reforms and must also find the time to improve the DWP's shoddy record on IT projects.
'It's certainly a wide and challenging remit,' he says in an understated way. 'But there's a very interesting and sensible logic to the way these roles merge into one.'
Plaskitt's constant search for logic during our conversation reflects his academic background. The former Oxford politics don is analytical to the point of geeky – there's a touch of former local government minister Nick Raynsford's mastery of detail about him.
It's a trait that stood him in good stead following his election to Parliament in 1997 and he quickly found himself studying the minutiae of policy as a member of the Treasury Select Committee.
Yet there is also a calm assuredness about Plaskitt that speaks of more than just mastery of his subject matter. He is willing to take on responsibilities that many of his contemporaries would rather hand to someone else.
He has a clear overview of the DWP's third-term tasks. 'This department has some overriding drivers that influence the work that all of us in the ministerial teams across departments are doing. Central to this is the ambition to achieve an employment rate of 80%,' he explains.
'We're operating at around 75% now, which is high compared with our competitor economies. But that still leaves us with a pretty high number of working age people who are inactive and, clearly, not all of them are there by choice.
'Achieving the 80% target is the right thing to do… because it helps us to address many of the challenges we face as a country.'
That includes Britain's all-encompassing pensions conundrum. Plaskitt is acutely aware of his role in helping to solve the problems created by a growing dependency ratio (the ratio of people in retirement to those in work).
'If we can succeed in raising the labour force rate to 80% we're going to address in part the pensions issue,' he says. 'If you meet the 80% target, the dependency ratio actually stabilises in this country to where it is now.
'The more you fail to meet your employment target, the bigger your pension problems in future.'
He says that in order to avoid those problems, there will be changes ahead that 'will not please everyone'. He cites housing benefit reform as one example.
After years of deliberation, the DWP has piloted the local housing allowance, a replacement for HB, which could be in place across the private rented sector by 2008.
LHA gives claimants more choice over where they can live – and therefore where they can seek work – by ensuring that a local authority pays a standard rate directly to recipients. Plaskitt believes this could also speed up benefit delivery. Performance in paying tenants currently varies greatly, he acknowledges. 'The worst authorities can take 76 days to process claims – and that is simply not good enough,' he says.
LHA has its problems – it forces claimants to pay additional rent out of their own pockets if the locally determined payment is below rent levels charged by landlords – but Plaskitt is more concerned with the mobility that it provides geographically and socially.
'If you ask people that were on the old HB system how long they've been out of work and what their expectation is for moving back into work over the next two years, you find very low levels of expectation.
'But in the areas where we've piloted the LHA, the proportion of claimants who believe they could move back into work in the near future doubles. We're not going overboard on the "cause and effect" of these findings, however. They require further analysis.'
Plaskitt must also consider whether the LHA could later be applied to the social housing sector. It's one of those tough yet crucial decisions that could go a long way towards meeting the 80% target.
'My understanding is that there's no direct transferability. Individual empowerment in the social housing sector is a harder task because housing is an allocation issue and not a consumer choice issue,' he says.
'But I'm anxious about this. If we see huge improvements in work and life chances being made out of private tenant LHAs, then I don't want to be the one saying "no" to millions of social sector tenants.'
One thing Plaskitt must first overcome, however, is the level of fraud and error attached to current benefit payments such as HB.
He's sanguine about this task, but it has been a poisoned chalice for previous ministers. Although the government's anti-fraud work has improved, gains have been wiped out by continuing problems with overpayments.
'We've certainly got some issues on the error side of the equation,' Plaskitt acknowledges. 'The trend has not been moving in the right direction and I want to take a comprehensive look at the design of each benefit, which may be contributing to erroneous assessment from the outset. If so, we need to design out those features.'
Part of that solution could be to get poor-performing local authorities to introduce effective IT. Plaskitt is well versed in councils' IT problems. In 1985, at the beginning of the office technology boom, he was elected to Oxfordshire County Council, later becoming leader of the Labour Group.
But outdated and problematic computer systems blight his new patch, too. IT disasters have, for example, plagued payments at the Child Support Agency, which Plaskitt describes as the 'most problematic' part of his remit.
He has been quick to get to the heart of the problem, calling for a new focus on IT compatibility, 'which is often where projects
fall down', and he is keen to ensure that officials who oversee successful IT projects stay on the public payroll.
But he is reluctant to wield his ministerial stick by forcing IT partners, such as EDS, the firm delivering CSA systems, to meet more contractual targets. 'I'm not trying to camouflage the extent of IT problems at the CSA – they've been horrendous. But I don't want to spend my time looking back and pointing fingers of blame. I want to get things sorted.'
Plaskitt's new colleagues at the DWP say he is very much a 'man of action' and his willingness to get on with things probably explains his calm in the face of tough tasks.
One senior DWP official told PF: 'David Blunkett has arrived at the DWP [as secretary of state] at a crucial time and we all know that the department is central to the government's reform agenda.
'James Plaskitt is the sort of minister to whom Blunkett can delegate responsibility for challenging tasks and know that the job will get done.'