General update from the Committee for Employment & Social Security
Sir, I would like to use this speech as an opportunity to provide an update on some of the Committee for Employment & Social Security's responsibilities and work streams that we've undertaken over the past year. I'll focus particularly on work streams that have progressed significantly since my most recent update to the States. I will not cover Longer Working Lives as you already have our policy document.
Disability and Inclusion Strategy
One of the main updates that Members may be keen to hear about is how we're progressing with the Disability and Inclusion Strategy.
On the disability discrimination legislation work stream, it became clear that there was a need to inject more pace and that the only way we would be able to do that was to find a subject matter expert who could help the Committee select legislation from another jurisdiction on which to model our own disability discrimination legislation. We've met with representatives of the Policy & Resources Committee to discuss the extra funding needed to recruit this expert, and we're in the process of finalising a business case for P&R's consideration. Following a competitive procurement process, we're now very close to appointing a leading academic in the field to undertake this work during the first quarter of 2018. I am personally really excited about the caliber of candidates that we have attracted to apply for this position.
The Committee's work towards developing an Equality and Rights Organisation (an ERO) that would be suited to Guernsey's needs is also moving forward at a good pace. Some initial meetings with stakeholders have taken place on aspects of the work stream, including some project team meetings. In December, we hosted a workshop to engage stakeholders and begin mapping out the principles of the ERO. It will be a statutory body, designed to foster fairness and inclusion for all islanders. Our work on this project includes close consultation with members of the Equality Working Group, which includes a wide range of stakeholders.
Earlier this month, another workshop took place on raising awareness of disability matters, and this also involved a range of stakeholders. During the last Quarter of 2017, Dementia Friendly Guernsey ran a campaign to raise awareness of dementia, and over 1,200 new dementia friends have signed up, following awareness training sessions. Autism awareness training has also been arranged for frontline staff at Wheadon House, and there have been many other activities to provide information and raise awareness of disability issues in recent months. Many more are planned for 2018.
Further discussions on progress with the Disability and Inclusion Strategy will be had at the Scrutiny Management Committee's public hearing on 31 January. We're keen to engage with this hearing, and to address any concerns.
Secondary Pensions
The next topic I would like to update on is progress with Secondary Pensions. Since April last year, actuarial consultants BWCI have been working on the scheme projections and an economic impact assessment for the forthcoming new Secondary Pension Scheme. This is a very important piece of work to support the Committee's progress with the introduction of the scheme. The results of BWCI's actuarial modelling were presented to the Committee in November, and have also been discussed at a joint meeting with the Policy & Resources Committee. The report was published to the media yesterday.
It is estimated that, in 2020, around 9,000 working age people will be contributing to a private pension. When the scheme is launched, it is expected that an additional 16,000 people will start contributing to a second pillar pension.
The Old Age Pension was only ever intended to provide a basic platform level of retirement income which, at a full level represents an income replacement rate of 40% for a lower quartile earner. The projections show that, with the introduction of the proposed auto-enrolment system, an income replacement rate of about 80% can be achieved. We are pleased to see that this exceeds the target income replacement rate recommended by the UK's Pension Commission.
BWCI's economic impact assessment illustrates how the introduction of the Secondary Pension Scheme could potentially have implications for individuals and households, employers, the government, and on the economy.
The projections show that the impact on individuals is overwhelmingly positive and that the drag on the economy is far smaller than might be feared. However, we recognise that there are circumstances where people would prefer not to be a member of the scheme. As such, it won't be compulsory, and everyone will retain the option to opt out, albeit with regular reminders to opt back in.
While some employers might find the prospect of an additional cost worrying, we are committed to developing a low-cost scheme with minimal administration burden to limit the impact on employers. It is also worth mentioning that the UK has recently been getting very positive feedback on their Secondary Pension scheme. In particular, from small businesses who had found it easier than anticipated to set up a pension scheme for their employees,. The next phase of work is to go out to tender for a provider of the new scheme.
Income Support
Turning now to Income Support. The implementation of the 2016 SWBIC proposals has been one of the Committee's top priorities since the start of this term. We're pleased to say that the Policy Letter on the implementation of Income Support, including transitional arrangements, is being finalised for submission next Monday. And we're hoping that it will be considered by the States on 28 February, so that the new Income Support Scheme can commence on our target date of 6 July.
Social welfare is one of the States' agreed top 23 priorities in the Policy and Resource Plan. It is encouraging that the States has recognised the importance of ensuring that everyone in society has enough money to live on, and is able to fully participate in society. This has been demonstrated by the increase in the Committee's cash limit for 2018, to account for the implementation of the welfare reform proposals.
Off-Island Travel Medical Insurance
The final topic I'd like to address in this statement is that of off-island travel medical insurance. The Committee have been in discussions with an insurance provider following the completion of the tendering process during 2017. The outcome of this is that we'll be bringing a recommendation to the States in the next few months to implement a new form of insurance scheme, which will protect islanders from large medical bills should they fall ill while travelling in the UK. The intention of the scheme will be to target those who would struggle to obtain medical insurance for travel in the UK, due to prohibitively high costs. This is not a direct replacement for the former Reciprocal Health Agreement. More information will be provided on this, and the other options considered, in the Policy Letter, which we're aiming to publish during March.
The Committee have, in conjunction with the insurance provider, designed a scheme that is fair and reasonable for both the taxpayer and the individual who may need to make a claim. The scheme would be funded through the Guernsey Health Service Fund, initially on a trial basis, and more details will be available when the Policy Letter is published at the end of March. The Committee hopes that the scheme can be launched later this year, subject to approval by the States.
Sir that completes this update and I am happy to take questions on any matters within the Committee's mandate.
