Kirkwood: Encouraging caution

MPs have warned ministers to tread carefully before cutting jobs in the Pension Service.

Their comments came despite a successful switchover of payment systems.

A report from the Commons work and pensions select committee found that the introduction of the Pension Credit in 2003 had gone well.

But the cross-party committee concluded that the changeover from the Minimum Income Guarantee should not be used as a pretext for running down the Pension Service.

The government wants to reduce the workforce in the department by 60 per cent by 2012 through its Pensions Transformation Programme.

However, the MPs warned that staff, particularly in local offices, had been crucial to implementing Pension Credit and that cuts should not come at the expense of service quality.

"We found much to praise in the work of the Pension Service and the introduction of Pension Credit, but the good news could turn bad unless the Pension Transformation Programme is successful," committee chairman Sir Archy Kirkwood said.

"The Pension Service faces a significant challenge if it is to reduce staff by more than half in the next seven years. 

"There is still much to do on take-up so front-line staff in the local service must be protected."

Take-up

The committee also warned that the government's target of 3.2 million pensioner households claiming the new means-tested benefit by 2008 would still leave one million missing out.

The report recommended that take-up targets should be raised if the goal of tackling pensioner poverty is to be achieved.

Commenting on the report, shadow work and pensions secretary David Willetts said older people found the system too difficult to navigate.

"Because benefits for pensioners are now so complicated, many older people don't get the help they're entitled to," he said.

"The government says it is acceptable for one million pensioner households never to receive their money. 

"While ministers think this performance should earn them a pat on the back, even Labour MPs say it isn’t good enough."

Liberal Democrat pensions spokesman Steve Webb said it had "come to something when all the select committee can congratulate the government for is a launch which doesn’t create mass chaos".

"By the government's own estimates, there are 1.6 million poor pensioners not claiming the pension credit money to which they are entitled," he added.

"Cutting staffing levels by 60 per cent will only make this worse."