09 March 2007
The Department for Work and Pensions has tried to improve its call centres after a damning PAC report last year. But has it done enough? Justin Pugsley reports
Trying to phone a call centre can be frustrating at the best of times. There's the inevitable long wait in a caller queue or, worse, being greeted by an engaged tone.
In recent years, these obstacles were encountered all too often by anyone ringing the Department for Work and Pensions' helplines. And that's if the caller wasn't too confused to call in the first place because of the sheer choice of telephone numbers – 55 in all, including 11 for pensioners.
This was the conclusion of a hard-hitting report from the Commons Public Accounts Committee, published last November. 'Millions of calls were not answered promptly, and 21 million were not answered at all,' it said.
The report catalogued problems ranging from inappropriate work practices to IT systems. The Jobcentre Plus service was singled out as being particularly poor.
The view from the shop floor has also been a cause for concern. Keith Wiley, a national officer with the Public & Commercial Services union, says that a lot of the problems are because the DWP has cut 20,000 jobs. 'The management are constantly firefighting,' he says. 'If they get a big backlog of claims, they pull people from one section to get that backlog down, and then the section they've taken people from suffers. They're basically robbing Peter to pay Paul.'
The DWP's establishment of call centres mirrors what many high-street banks did 15 years ago – although some are having a rethink. Lloyds TSB announced just this week that it is closing its Indian call centre and customers will once again be able to ring their branches direct.
Nevertheless, according to the PCS, the department is closing 577 offices across the country, with a view to eventually concentrating its activities in a few giant processing factories and call centres.
This is part of its drive to do more with less, and a key component of meeting the Gershon Review's efficiency targets. Last December's Pre-Budget Report reiterated that the department was on course for a 5% budget cut. It also stated its target of cutting the cost of running government call centres by 25%.
The PAC report found that it cost £5 to carry out a transaction by post compared with £3 via a call centre. In the private sector, this can fall to £2. Richard Small, a call centre expert with consultancy Deloitte Touche, says some public sector call centres are already operating at close to commercial levels of efficiency.
Yet getting them to work optimally is no small matter. According to the National Audit Office, the department serves 28 million pensioners and benefit recipients – almost half the UK's population. To date, the service is still below par, but improvements are being noted. The PAC says that in 2005/06, 84% of calls were answered compared with 56% in 2004/05. The range of telephone numbers is also being streamlined.
Then there's the level of satisfaction once the caller gets through. Generally the PAC found this to be high, with 80% of users saying their query had been answered satisfactorily. PAC member Richard Bacon, a Conservative MP, concedes that the call centres have improved but says: 'The jury is still out. It's too early to say whether they will perform in the way they're supposed to.'
Many of the problems stem from the call centres not being particularly well planned or managed, he says. 'I think there's been a zeal to meet their Gershon targets too quickly and to then think about the consequences rather slowly.' He adds that the enthusiasm to cut costs is due to the close political ties the department has with the Treasury.
One industry source told Public Finance that many of the problems are related to legacy issues. Effectively, the DWP is trying to run centres that solve problems while the caller is on the phone while using systems and processes geared towards a slower, paper-based environment. Flexible working contracts also make it difficult for management to ensure it has the correct number of people to answer peak-time calls, he says.
Another problem is the hierarchical staff structure. This means that some processes carried out by staff have to be checked by higher-grade officers and then signed off by an even more senior grade.
One way to plug the gaps would be to use temporary staff but the DWP seems reluctant to explore this. Apparently, many frontline managers believe that these staff are not as effective as permanent employees.
But Small says temps can make a valuable contribution. Around 90% of the processes in a call centre are sufficiently simple and repeatable to be handled by trained and properly supported staff, he insists. The remaining 10% of enquiries can be fielded by experts.
Efficiency is at the heart of the DWP reforms, but measuring it has been problematic. The PAC criticised the department for not employing its demand forecasting tools widely enough. And although the DWP believes it has saved £375m in staff costs thanks to call centres, measuring improvements in operating efficiency has been harder to quantify.
The department's scorecards are widely acknowledged to be good, but don't contain enough data. It has responded with a new Resource Management System, which a spokesman says will 'provide greater cost visibility and break down elements that will help managers compare performance and identify areas for improvement'. The RMS should be established by April 2007 and be fully up and running by February 2008.
A major hindrance to the smooth functioning of the call centres has been the IT systems, which were not designed to provide the instant access to information that staff need. They are often out of action for long periods due to maintenance. In some cases, information has been stored on several different systems, making data input and retrieval harder.
Adapting these cumbersome systems has been difficult: not only because they are heavily customised, but also because many of them are outsourced to contractors who, as one commentator puts it, 'are paid to run the systems, not to change them'.
Nonetheless, there has been some superficial tweaking, which is beginning to make a difference. The main IT contractor to the DWP is Electronic Data Systems, which was paid around £700m a year until 2005 to run various computer systems. The department last year renewed its contracts until 2010. Under the new terms EDS will be paid £520m annually for running areas such as desktop support.
Neither EDS nor BT – another leading contractor with the DWP – were willing to comment on any aspect of their business with the department. But early last year the PCS intercepted a document from the DWP showing that it was making contingency plans to offshore some of the call centres: something the department denies. 'The DWP told us recently that they still have no plans to offshore these call centres,' says Wiley. However, he adds that much of the work done by contractors such as EDS is offshored anyway.
Meanwhile, the DWP is upgrading its telephone system 'to provide higher levels of flexibility and resilience', according to its spokesman. This should be completed by 2009.
Although there have been undeniable improvements in the call centres, the unions and the PAC are concerned that these might not last. However, the department is confident that they will.
Undoubtedly, MPs will be watching the DWP's progress closely. One area they might have to keep a special eye on is benefit fraud. According to Bacon, many anti-fraud officers have been made redundant to save money, and a side-effect of not processing claims face-to-face via local offices could be a rise in fraudulent activity.
If so, the DWP can turn to another part of the private sector for inspiration: the insurance industry. It's a problem it has been battling for years.
PFmar2007
