Mr Nicholas: There are many recognised things which are classed as a disability, blindness being one, where many people are able to work. The crucial difference is that with the work assessment done for access now to incapacity benefit, the focus is on whether somebody's disability is such as to stop them working. There are very many people who have forms of physical impairment who are perfectly capable of working and do work, which is why there are many millions of people in Britain who have a disability but who are in work.

Q38 Mr Khan: If I were to ask you to compare and contrast 2006 and 50 years ago, you would probably say statistics were not available then. How do we compare with other countries, with comparisons internationally, vis-à-vis numbers of people who are disabled?

Ms Strathie: If we look at the OECD countries and look at the employment rate for people with disabilities, we are average.

Q39 Mr Khan: And incapacity benefit?

Ms Strathie: We do not have like for like because not every country has an equivalent of incapacity benefit.

Q40 Mr Khan: How are their curves going, upwards, downwards, plateau?

Ms Strathie: I do not think I can answer that.

Mr Sharples: There has been a tendency internationally for an increase in the number of people on the equivalent of our incapacity benefit. As Lesley says, we are about the OECD average in terms of the proportion of the working age population who are receiving incapacity benefit as compared with other countries with an equivalent benefit.

Q41 Mr Khan: The report tells us that £12 billion is spent on incapacity benefit and if you include the other benefits, including those not of working age, it comes to £20 billion. The report tells us that the amount of money spent on getting people into work and retaining work is £300 million. Is that sum adequate?

Mr Sharples: May I comment on the figures? It is not a complete picture of the money that is spent helping people into work because of course there are the mainstream services of Jobcentre Plus that are helping people.

Q42 Mr Khan: What is the total figure then?

Mr Sharples: There are the Pathways to Work programmes.

Q43 Mr Khan: What is the total figure then?

Mr Sharples: I could not give you an accurate total figure and it would partly depend on definitions. One would have to start slicing up Jobcentre Plus total spending and allocating it to particular client groups.

Q44 Mr Khan: How can we assess whether you are doing enough to get people back into work who are disabled if you cannot tell us how much money you have spent doing that?

Mr Sharples: What we can tell you is that of the money which is spent on the particular programmes, and this report covers five of those programmes, because it is looking primarily at the 2003-04 financial year it has not picked up on the rapid expansion of the Pathways to Work programme ---

Q45 Mr Khan: Mr Sharples, on the five programmes they looked at, they concluded that your ability to evaluate cost effectiveness is completely inadequate and frankly hopeless.

Mr Sharples: That is not true at all.

Q46 Mr Khan: Oh, you do not think it is true.

Mr Sharples: What the report shows in its last section is a pretty detailed analysis of the cost effectiveness.

Q47 Mr Khan: Page 43, paragraph 4.5 "The department also does not know if they are getting value for money for the products and services purchased under the Access to Work scheme". I will give you another one, page 35, "There are currently around 700 Disability Employment Advisers across the country ... Jobcentre Plus does not know exactly how many Advisers there are, and whilst there is a job description, there is no consistency in what their role actually entails". I could give you some more examples if you want.

Mr Sharples: Indeed, and I am not for a moment going to say that we are running a perfect system that we want to defend in every respect. I just wanted to make a point that on page 50 of the report there is a pretty detailed analysis of the cost effectiveness of each of the schemes. I am simply making the point that it is unfair to say there is no evaluation of cost effectiveness.

Q48 Mr Khan: I have seen that. Did you not read this report and take it as a criticism of your ability to assess how effective you are? The impression I get from you is that you did not see the report as a criticism of your ability to assess how effective you are at getting people into work and staying in work. You thought it was not a criticism.

Mr Sharples: What I take the report as is a serious piece of analysis, which we welcome strongly, which will help us in improving and redesigning these schemes, something which we had embarked on ---

Q49 Mr Khan: Mr Sharples, did you take it as a criticism?

Mr Sharples: May I just finish the answer?

Mr Davidson: May I just clarify that you answer the questions which are asked and if the member wants to ask an additional question, you stop your reply and then carry on responding to the new question. It is not you speaking to us actually: we are asking questions of you.

Q50 Mr Khan: I have to say that the answers you gave to the last two questions have been incredibly long and time is precious. The next question I have is in relation to the Holy Grail, Pathways to Work. Do you accept that is the Holy Grail? Do you accept it will solve some of the problems we see in this area?

Mr Sharples: No. May I clarify that answer? It is not that I do not see it as the Holy Grail; I do not think anyone sees it as the Holy Grail. We would see it as a very important step forward which is already showing very good results.

Q51 Mr Khan: By the end of this year one third of the country will be covered by Pathways to Work and the pilots began a number of years ago. Yes? How have you assessed how effective it is?

Mr Sharples: We are doing continuing evaluation of Pathways to Work. There is published data and what that data shows is that the rate of offload from benefits at the sixth-month point, that is after six months on benefit, on average has gone up from 32% as the national figure to 40% in the Pathways areas.

Q52 Mr Khan: How much money has that cost?

Mr Sharples: The pathways programmes cost between £5 million and £10 million in each of the districts in which they are operating.

Q53 Mr Khan: So it is value for money.

Mr Sharples: You could not conclude from the figure I have just given you that it is value for money, but the early results do suggest that that eight percentage point increase in the off-flow rate at six months is producing a good return.

Q54 Mr Khan: Firstly, do you accept paragraph 3.2 on page 35? Is it accurate? I am sure you have read this recently.

Ms Strathie: I have indeed.

Q55 Mr Khan: Is it accurate?

Ms Strathie: Yes. I do know how many disability employment advisers we have across the country. We have 570.

Q56 Mr Khan: So this is wrong; it is not correct.

Ms Strathie: This relates basically to 2003-04 data. We have 570, which is a pure number.

Q57 Mr Khan: So the criticism made of you in this paragraph is unfair, because you do know what they claim you do not know.

Ms Strathie: Yes.

Q58 Mr Khan: Fine. Are there any other paragraphs in this report that are unfair?

Ms Strathie: I do not think so.

Q59 Mr Khan: One of the things I want to ask you, bearing in mind there is another criticism made in the report - you may or may not have seen this - is about the inconsistency of the service received by disabled citizens around the country. Do you understand what I am talking about?

Ms Strathie: Yes.

Q60 Mr Khan: How are you securing greater consistency, bearing in mind that criticism which you are aware of?

Ms Strathie: We are doing a considerable amount of work to try to ensure that we have standard processes, that we have better procurement, that we have better monitoring and that we have professionalised and revisited all of the learning and development of our disability employment advisers as well as having learned all that we learned in the recruitment and training of our incapacity benefit advisers. We have a much more standardised approach.

Q61 Mr Khan: The one thing you missed out was the information, getting better information. May I take you to paragraph 4.3? The section is headed "The Department has evaluated New Deal for Disabled People but needs to improve its evaluation of other programmes". How can you manage a programme when the management information for so many is so poor?

Ms Strathie: With difficulty, I absolutely accept. When we develop policy and then we develop the products that will deliver the policy intent, and they are very much developed inside my business, a huge amount of effort goes in to trying to make sure we can evaluate those programmes over a period of time and we need to be much better at ensuring we have the management information that allows us to manage the products as we deliver them. We have a new IT system, Disc Three, coming on stream later this year which will enable us to do that to much greater effect, but I hope you will appreciate that we are not going to vest large amounts of time on very old programmes that we may not be continuing in their format.

Q62 Mr Khan: Yes, that is a fair point. On page four, figure two lists four things which can be done to drive down costs and increase efficiency. Do you accept all those?

Ms Strathie: Yes.

Q63 Mr Khan: Over the page on page six, there are eight headings about where more progress is needed. Do you accept those?

Ms Strathie: Yes.

Q64 Mr Khan: If you were to come back here in two years' time and we were looking at numbers of people receiving incapacity benefits, what figure do you think would be a success bearing in mind that you have had a plateau roughly for the last nine years and Pathways to Work is almost a Holy Grail?

Ms Strathie: I know you would like me to give you a fixed number, but there are far too many policy decisions that have yet to be made for me to be able to answer that.

Q65 Mr Khan: Will the graph go down?

Ms Strathie: The rate at which we will roll-out Pathways, the shape of Pathways, the money which is attached to it and the output requirements from that programme are all things before I could give you a number. I said our aspiration is for a million of those IB customers over the period of time to move from inactive into the labour market as active participants. Where we would be at two years on that journey very much depends on decisions yet to be taken.

Q66 Mr Khan: How are you going to assess whether Pathways to Work is cost effective? What criteria are you using? We know the aspiration and I am sure we all agree with the aspiration. Our job is to assess value for money and cost effectiveness. What criteria would you suggest we use in two years' time, for argument's sake, to assess how successful that new policy is?

Ms Strathie: Did it deliver its policy objective, have people actually moved from the inactive benefit into work.

Q67 Mr Khan: How many people would you like us to deem to be a success? Is that an unfair question? Do you think it is an unfair question?

Ms Strathie: I do think it is an unfair question for the reasons which I outlined.

Q68 Mr Khan: Is it an unfair question for me to ask you how we judge success?

Ms Strathie: No. There are various measures of success and according to this they are: a successful economy by moving people into active employment and contributing as stakeholders in society; there are measures of success for the Treasury in terms of people moving off the programmes and the benefits they were dependent on.

Q69 Mr Khan: Mr Sharples, do you have an idea how you would like us to measure success in two years' time? Is a two-year period too short, for example, as a period of time to assess how Pathways to Work is working?

Mr Sharples: No, it is not too short. We need to monitor the performance of this programme as we go along, so that we are learning from it and then adapting the programme, learning from the lessons. We were saying earlier that there are some very good early results, but let us see how the monitoring goes over the next two years.

Q70 Mr Khan: I know you work closely with the DRC, the Disability Rights Commission. How are the work with the new commission and the transition arrangements working? Has that started yet? Will you work with personnel there to make sure there is a smooth handover?