S31 Assessment of HM Treasury –

EDF workshop

12 June 2012

Outline:

• Section 31 powers.• Purpose and aims of the assessment.• Assessment process.• Spending Review process.• Key findings.• Case studies:

–Child Benefit–Education Maintenance Allowance–Removing DLA mobility component from those in residential care

• Recommendations.• Going forward.• What it means for you.

Section 31 powers

S31 Assessment: a unique power given to the Commission under the Equality Act 2006, in relation to ensuring compliance with the public sector equality duties.

Purpose of the Assessment

• Following the 2010 Spending Review, the Commission was engaged in discussions with HM Treasury around the extent to which they had ‘due regard’ to the equality duties in place at the time of the Spending Review (gender, race and disability).

• The Assessment provided a formal route to continue this ongoing dialogue and enabled us to gain access to all the necessary information.

• It was an opportunity to work constructively with HM Treasury.

Aims of the assessment

The aim of the assessment was to:

• Work constructively with HM Treasury to evaluate its decision-making process and the steps taken to comply with the legislation.

• Identify any potential opportunities for improvement.

• Enable lessons to be learnt across government to improve outcomes for protected groups by putting fairness and transparency at the heart of difficult decisions.

The Assessment process & evidence base• Assessment process began in November

2010

• Evidence base included:

– representations from stakeholders.

– over 100 pieces of documentary evidence from HM Treasury and other government departments.

– transcripts of oral evidence sessions from HM Treasury and other relevant government departments.

S31 Assessment process

• Initial preliminary assessment of all measures in the Spending Review.

• Criteria developed for selecting measures to be assessed in greater detail.

• Forensic examination of the complex process followed by HM Treasury, including its interaction with other government departments.

Spending Review process

• HM Treasury

– Issued Spending Review guidance.– Requested data from spending departments on

distributional impact and equalities impact.– Sent emails reminding departments of their

obligations and the government’s approach to meeting the duty.

– Established an independent challenge group.– Developed a screening tool for certain measures,

which was provided to decision-makers.– Provided decision-making bodies with papers

setting out equality implications prior to decisions being taken.

– Organised an equality roundtable for stakeholders with the Chief Secretary.

HM Treasury’s process

• GEO– Equality Ministers wrote to

departments reminding them of their responsibilities under the equality duties.

– Provided guidance on ‘Reducing the deficit fairly’.

– Held a workshop with HM Treasury and departments relating to the duties.

Decision-making process

• Decisions were taken by the key ministerial decision-making bodies: – The Public Expenditure Committee (PEX), chaired by

the Chancellor - once a department settled, its Secretary of State was invited to join PEX.

– Quad (Quadrilateral – Prime Minister, Deputy Prime Minister, Chief Secretary to the Treasury and the Chancellor of the Exchequer).

• The evidence shows that these bodies were provided with equality information prior to key decision points, based on the information collected from departments.

• However, there was no read out from the final decision-making meeting of Quad, and minutes from PEX were very high level.

Key findings

• Out of nine detailed case studies, six were fully in accord with the PSEDs:– Removing Child Benefit from households with a

higher rate taxpayer.– Reform of Legal Aid.– A £2.5 billion pupil premium for disadvantaged

children.– Removal of mobility component of Disability Living

Allowance from claimants in residential care homes.– Council Tax Benefit: 10% reduction in expenditure,

and localisation.– Time-limiting the contributory Employment and

Support Allowance to one year for those in the Work Related Activity Group.

Key findings

In three cases the Commission was unable to establish whether or not the decisions were in full accord with the requirements of the duty because of a lack of clarity as to:

a)where the true site of the decisions lay and

b)whether or not some decisions were the responsibility of other government departments or the government as a whole.

Key findings

• These were:– Introduction of a household benefits cap

- no evidence of any gender analysis or equality screening of the measure provided to HM Treasury ministers prior to the announcement of the measure on 4 October.

– Bus Service Operators Grant (BSOG) - the potential impact on people with disabilities was not included in the advice provided to HM Treasury ministers.

– Replacing Education Maintenance Allowance (EMA) with local discretionary funds - there was no reference to ethnicity, disability or gender in information provided to HM Treasury ministers.

Key findings

• In addition to these three cases, for future exercises, improvements could be made to the early stages of the decision making processes in order to meet the requirements of the PSED more completely:

– Tests, such as whether a department provides a ‘public good’ (see notes), should not pre-empt whether consideration should be given to the impact on equality.

– Formulating a small number of defined equality objectives at the start of the process could have helped Ministers by making the decision-making process more transparent and manageable.

Case Studies

•Child Benefit.•Education Maintenance Allowance.•Disability Living Allowance – mobility.

Child Benefit (CB) measure

• ‘withdrawing Child Benefit from families with a higher rate taxpayer from January 2013 so that people on lower incomes are not subsidising those who are better off, saving £2.5 billion a year by 2014-15’.

How the policy was developed

• 24 August 2010 - The first documentary evidence that mentions Child Benefit (CB) was the Independent Challenge Group (ICG) sub group report, submitted to Chief Secretary (CST).

• 16 September – Submission from HMT to Chancellor (Chx) and CST outlined two options for removing CB from higher rate tax payers.

• 28 September – Submission from HMT to Chx and CST highlighted the need for an equality impact assessment before any changes were made to CB.

How the policy was developed cont.

• 1 October – Screening document on Child Benefit went to Chancellor, covered final policy and delivery advice on 2 proposals relating to CB.

• It identified: Women more likely to claim Child Benefit than men; are more likely to be lone parents; and lone parent households where the parent is a higher rate taxpayer are likely to be disproportionately disadvantaged by the policy compared to two earner households.

How the policy was developed cont

• The final decision was made by Quad and the Work and Pensions Secretary on the welfare package on 18 October 2010.

• HMT decided not to go ahead with the 16-19 year-old policy option, partly on the basis that the ‘cumulative impact of doing that and reforming EMA would have had a disproportionate impact on that group of young people and their families at a stage when a number of people are at a particularly vulnerable part of their lives – care leavers, disabled young people’.

Commission’s conclusion

• Documents show that policy options on Child Benefit were provided to Treasury Ministers, with reference to equality.

• Officials highlighted that no changes could be made without an equality impact assessment, which was provided prior to this policy being announced, and included information on the three equality groups.

• The Commission received confirmation from a Treasury official at an oral evidence session that the Chancellor took account of that information.

How could policy making have been improved?

Impact of changes to Child Benefit on children

• The screening document provided to HMT decision-makers includes no consideration of the potential impact on children by equality group, this could have been done by using HMRC data on households where Disability Living Allowance is claimed for a child.

How could policy making have been improved?

Family size • Child Benefit is paid per child and the removal

of it will have a differential impact on households with more children, in terms of the percentage of their total household income.

• For example, the Office for National Statistics finds that ‘Asian households are larger than households of any other ethnic group’ and ‘74% of Bangladeshi households contained at least one dependent child compared to 28% of White British households’.

Education Maintenance Allowance (EMA) measure

• Replacing EMA with local discretionary funds to target support.

EMA background

• Aimed at encouraging more young people to participate and progress in age 16-19 education, paid directly to the young person and not affected by any other benefits the family received.

• New government believed it was badly targeted and did not impact on participation rates.

How the policy was developed

• 10 September - DfE provided HMT with spreadsheets, covered distributional analysis and equality impacts for all areas of education.

• 24 September - a submission was sent to the Chancellor and Chief Secretary which did not contain specific reference to equality groups.

• 15 October - DfE provide further information to HMT setting out proportion of EMA recipients by equality group.

• 17 October – Education settlement agreed by Quad who were provided with a paper “Equality implications of the Spending review”. This paper included no reference to EMA.

Commission’s conclusion

• The Commission was not provided with documents demonstrating that information on the potential impact of the measure on equality groups was provided to Treasury Ministers prior to the decision being taken to withdraw EMA.

• Because of a lack of clarity regarding where the true site of the decisions lay, and whether or not some decisions were the responsibility of other government departments or the government as a whole, the Commission was unable to establish whether or not this decision was in full accord with the requirements of the Race, Gender or Disability Equality Duties.

How could policy making have been improved?

• More detailed interrogation of the equality evidence around recipients of EMA from the Dept for Education may have provided government with a stronger argument regarding poor targeting of funds and may also have helped them to better target the replacement bursaries for young people in protected groups.

Decision? or Planning assumption?

• In an oral evidence session with the EHRC DfE officials stated that the final decision on EMA was not taken until Spring 2011 and that its inclusion in the Spending Review was more of a “planning assumption”.

However several things contradict this:• The language used, i.e. The Spending Review

“replaces EMAs with locally managed discretionary funds to target support” – SR 2010.

• The support currently provided by EMA will be focused on the most disadvantaged children, saving around £0.5 billion. – SR 2010.

Decision? or Planning assumption?

• December 2010, in answer to a Parliamentary Question, Education Minister Nick Gibbs stated, ‘The Government took the decision to end EMA on the basis of evaluation and other research evidence which indicates that the scheme does not effectively target those young people who need financial support to enable them to participate in education and training.’

• The EMA scheme closed to new applicants on 1 January 2011.

• A full EIA for the 16-19 Bursary was published in March 2011.

DLA measure

• Remove 'the mobility component of Disability Living Allowance (DLA) for people in residential care, where such costs are already met from public funds'.

How this policy was developed

• Policy proposed by DWP due to evidence of ‘dual provision’.

• HM Treasury decision makers received information relating to the potential impact on the three protected groups before a decision was taken:– Screening tool.– Paper on equality implications of welfare

package.– Outstanding decision note.

• Mitigating actions were not thought to be possible without undermining the policy aim.

How this policy was developed (cont)

Activity post-Spending Review:

• 6 December 2010 - 18 February 2011: government ran a consultation on DLA reform.

• April 2011: government response stated that the measure would be subject to further review.

• December 2011: Press release announced that the policy would not be implemented, and referred to ‘months of consultation with disabled people and disability organisations’.

Commission’s conclusion

• Equality analysis was conducted and information on the three equality strands was provided to the decision maker prior to the final decision point.

• Commission concludes that due regard was paid throughout the process and that this decision was therefore fully in accord with the duties.

How could policy making have been improved?

• This example demonstrates the importance of consultation in making better decisions, as it was after consultation that the announcement was made to reverse the policy.

• Where the evidence is not clear, consultation and involvement helps to ensure that the potential impact is understood.

• It would be helpful to make the status of policy announcements clearer (e.g. as being subject to further consultation, rather than as a final decision).

Recommendations

• Future compliance and good practice in Spending Reviews could be better assured by: – Greater transparency, including clear HM Treasury

guidance on data and analytical requirements for the whole of government.

– Common rules to allow easier sharing of equality data within government, such as standardised data collection rules.

– Authoritative sources of advice and support for government departments on equality impact analysis.

– The development of a common model of analysis to predict the likely equality effects of policy.

Recommendations

• The government should also consider:– a single point of government responsible for

monitoring and assessing the cumulative impact of future Spending Reviews and budgets

– independent and authoritative equality analysis of public spending policies. Since this task would conflict with the Commission's statutory role as a monitor and assessor of non-compliance with the PSED, this role might be undertaken by a body such as the Social Mobility and Child Poverty Commission

Further recommendations

• All departmental functions or services under consideration for change under future Spending Reviews should be subject to an initial screening for their relevance to equality and potential impact.

• Consider extending the use of the screening tool for all measures.

• The distributional impact analysis should be extended to consider impact on equality groups.

• Assessment of potential impact should include both indirect and direct aspects of equality.

• Where the evidence base is not available or robust, measures could be announced in a different way, for example as policy proposals.

Going forward

• Dissemination of findings and recommendations.

• Working with government departments to monitor the impact of measures in the Spending Review once they are implemented.

• Work with HM Treasury, other government departments and other bodies to develop models of analysis that address issues raised in the assessment.

What does this mean for NGOs?

• Enables a better understanding of the obligations on public authorities and what the duty means in practice, so that you can support them to make better policies and decisions.

• This better understanding and clearer idea of what is expected under the duties will also help hold public authorities to account.

• Through highlighting and addressing areas of concern in relation to the duties, public authorities should be better supported in meeting their obligations and implementing best practice. This should mean better outcomes for the protected groups.