151.This section introduces schedule 6.
152.Government policies in the area of employment and social security have focused on increasing the efforts to help people move away from welfare benefits and into work. However, once a client has left an employment or training programme or has come off benefit, they are under no obligation to inform the Department for Work and Pensions (DWP) of their activities. It is important that DWP know what happens to people afterwards. Many clients do provide DWP with this information. However, a significant minority do not. Attempts to establish the destinations of leavers are costly, time consuming and inconclusive. In addition, once a client has entered work, DWP has no way of assessing their progress in employment, unless they return to benefit. This creates two problems. The first is in evaluating the effectiveness of employment and training initiatives in moving people into sustainable work. The second is in paying and rewarding providers, who are increasingly paid on a performance-related basis. The provisions will also allow DWP to confirm which clients have moved into work and ensure the security of the funding arrangements.
153.Commentary on Schedule 6:
Paragraph 1 amends section 3 of the Social Security Act 1998 by broadening the range of information covered by the Act, which already covered social security, child support, and war pensions, to also include employment and training. This means that the Secretary of State or the Northern Ireland Department can use the information held by him for the purpose of, or any purpose connected with the exercise of any of those functions. This therefore allows DWP to use any of the information it holds to perform any of its functions. Following the transfer of war pensions to the Ministry of Defence (MOD), the provision will also enable the supply of information to and from MOD and DWP to enable the supply of social security, child support and employment and training information to MOD for use for war pensions purposes and the supply of war pensions information from MOD to DWP for social security, child support or employment and training purposes. The provision also allows the data pooling of information relating to any of these functions, ie. social security, child support, war pensions and employment and training.
Paragraph 4 repeals subsection (3) of that section as that is now rendered otiose by the amendments made by paragraphs 2 and 3.
Paragraphs 2 and 3 amend the existing provisions in sections 122C and 122D which govern the supply of information to and from DWP, the Northern Ireland Department and local authorities in connection with the administration of housing and council tax benefit. These sections are extended to include employment and training information.
Paragraph 5 amends section 122 of the Administration Act to allow DWP access to tax information held by IR and information held by Customs and Excise for the purposes of preventing fraud against the DWP by those contracted to deliver employment and training programmes and possible fraud by participants in the schemes. The amendment will also enable errors to be checked where no fraud is suspected. Paragraph 7 makes corresponding provision for Northern Ireland.
Paragraph 6 inserts a new section 122ZA into the Administration Act allowing DWP to access PAYE information held by Revenue as well as information supplied by the self-employed for tax purposes relating to people beginning or terminating employment. The information can be used for the purposes of evaluating the effectiveness of various employment and training programmes (such as the New Deals). This gives DWP access to the information supplied by employers on tax forms P45 and P46, which will allow the Department to ascertain whether leavers from employment or training programmes have taken up employment. The subsection states that such information must not be further disclosed, other than for civil or criminal proceedings. Because such information is based upon employers’ annual returns, this information will typically be over 18 months old by the time it reaches DWP. Allowing DWP access to the information on P45 and P46 forms will therefore provide them with more up-to-date information. These forms are completed when an employee starts a new job. The only information that will be supplied from this source will be the fact that the individual has started work and the name and address of his employer. The section will apply to all relevant information held when the provision comes into force as well as relevant information gathered after that date.
Paragraph 8 makes corresponding provision for Northern Ireland.
Paragraphs 9 and 10 amend the Tax Credits Act 1999 so as to ensure that information to which the DWP has access relating to tax credits can if necessary be used for employment and training purposes and that employment and training information can be supplied to the Revenue for tax credits purposes.
Paragraph 11 amends section 121E of the Social Security Administration Act 1992 (the “Administration Act”). This section deals with the supply of contributions, statutory sick pay (SSP) and statutory maternity pay (SMP) and contracting out information held by Inland Revenue. The amendment extends the purposes to which information supplied by the Inland Revenue to the DWP can be put, to include purposes relating to employment or training. It specifies that information supplied relating to employment and training may be supplied on a permissive basis – i.e. that the DWP cannot demand information from IR. This amendment will enable information supplied to the DWP by Inland Revenue under provisions in the Administration Act to be used for employment and training purposes. This will provide inter alia information on where the individual is employed, how long they have worked for that employer and how much they earn, all of which is helpful in assessing the effectiveness of the various welfare to work initiatives.
Paragraph 12 makes corresponding provision for Northern Ireland.
Paragraph 13 makes similar provision with respect to section 121F of the Administration Act. This section deals with the supply of information to the Inland Revenue by DWP (in the person of the Secretary of State) for the purposes of contributions, SMP and SSP and contracting out. Paragraph 14 makes corresponding provision for Northern Ireland.