Examination of Witnesses (Questions 1
- 19)
WEDNESDAY 4 FEBRUARY 1998
MR CHRIS
THOMPSON AND
MR GERRY
KEENAN
1. This morning we are here to take evidence
on the Comptroller and Auditor General's Northern Ireland Report
on the Administration of Disability Living Allowance by the Social
Security Agency. We welcome Mr Chris Thompson, Chief Executive
and Accounting Officer of the Northern Ireland Social Security
Agency. Good morning, Mr Thompson. Would you care to introduce
your colleague to the Committee?
(Mr Thompson) Yes. My colleague is Mr Gerry Keenan,
who is the Operations Director in the Social Security Agency with
responsibility for the provision of the benefit service which
includes Disability Living Allowance.
2. Thank you very much. We will go straight
into questions. We will start with paragraph 2.8 in the Report
which tells us that in the first year of Disability Living Allowance
the Agency had 6,000 fewer claims to deal with than was expected.
We also learn from paragraph 2.17 that the staffing level was
expected to reduce significantly during the course of 1992/93.
In fact, paragraph 2.19 shows it increased sharply from 146 to
230 staff. How did the Agency get its staffing projections so
wrong, particularly when less work was received than expected?
(Mr Thompson) Can I start by saying in response
to that question that I accept the Audit Office's broad conclusion
that the implementation of DLA could have been planned and implemented
much more effectively. However, I am glad that the Report also
acknowledges the difficulties there were in the benefit itself
and the difficulties the Agency particularly faced at this time
and that those difficulties, in addition to being for the Agency,
were national problems that were the case in the whole of the
UK. However, we could and should have done better. I think there
were three major problems. First of all, although the number of
cases that we had to deal with in the first year was round about
what we had estimated, perhaps even a little bit less, the mix
of cases was quite different and some of the cases that we got
that we had not planned for were much more difficult to deal with.
I think the second problem was the explosion of claims that we
received round about the beginning of 1993 and really I am not
sure that anybody could have forecast that. The claims at the
beginning of 1993 increased quite dramatically. Thirdly, I think
that in dealing with the claims we found that the benefit was
much more difficult to administer than we had thought in the planning
process. All of this meant that we were falling behind during
the first year and that is a self-perpetuating thing. As you fall
behind so you get more phone calls, more letters and you fall
further behind and it goes on like that. My feeling is that the
major problem was the lack of a proper management planning methodology
which would have included risk assessment and contingency planning
and I can assure the Committee that the lessons of that have been
learnt and with any major exercise, major new benefit or other
change that we would be introducing now, we would be using a proper
management planning methodology.
3. Thank you, Mr Thompson, that is helpful.
I am sure other members of the Committee will want to pursue that
point later. The disappointing findings of the Chief Adjudication
Officer shown in table 3.6 suggest that the Agency has not been
taking the findings of the Officer seriously enough. In 1996/97
the Chief Adjudication Officer urged adjudication officers to
take "more time at all stages" and said that "this
will produce dividends". Have his findings received sufficient
attention and what is the position now?
(Mr Thompson) Again I would accept that the standard
of adjudication is not good enough. However, I am encouraged to
see that table 3.5 on page 36 of the Report showing the standard
of adjudication throughout the period since the introduction of
the benefit shows a steadily improving picture and although in
the last year, 1996/97, that moved back a bit, I think that the
major improvements from 1992/93 to date have been noteworthy and
I think show that we have taken those comments seriously. Of course,
Disability Living Allowance is a difficult benefit to adjudicate
on and that is one of the problems. It has taken a lot of training
and seminars and all of those things to try and get our own people
up to speed on it. We have been doing a lot on adjudication and
can I say that we have found the Report itself to be quite catalytic
in allowing us within the branch to start to bring together a
lot of things that perhaps were at the back of our minds in any
case and which, in fact, have allowed us to start a whole programme
of improvements and I could talk about that later in more detail.
4. I find it interesting that in paragraph
3.25 it says the Medical Referee Service found that in 1996/97
more than 20 per cent of claims were exaggerated by more than
25 per cent. What is alarming to me, however, is that the Agency
was unaware of these findings. Should you not be interested in
obtaining such information, and what action are you taking to
detect such exaggerated claims?
(Mr Thompson) We were not aware of the specific
formal findings of the Medical Referee Service and I find that
difficult to understand and we have now put in place arrangements
to ensure that that is the case. When I have spoken to adjudication
officers they have told me that in fact they are aware of the
possibility of exaggeration of claims and, indeed, they are able
to spot it pretty quickly. It becomes obvious. They were able
to show me cases, for example, where when you add up the number
of hours that somebody says it takes them to do things during
the day you come to more than 24 hours and you can see that there
is exaggeration there. So these are experienced people and they
pick that up. They also tell me that there are cases where there
are under- estimates as well and that is important not to miss.
For instance, in their discussions with the Medical Referee Service
the medical officers have told them to be very careful about multiple
sclerosis. People with multiple sclerosis apparently tend to under-state
their problems and so they have got to be aware of both of those
things. They have got to treat each case on its merits in making
the adjudication. I think it is important to point out that in
more than two-thirds of new claims we get further medical advice
and that shows that we are alive to the problems and that we are
dealing with that.
5. That is interesting because I note from
table 5.1 that the Agency has achieved its target for processing
new claims in the last couple of years. Is it possible the staff
may be clearing cases at the expense of accuracy?
(Mr Thompson) The job of an adjudication officer
is always that balance because on the one hand the adjudication
officer has the duty to deal with claims in a reasonable length
of time and that is important and that cannot be lost sight of
and, on the other hand, he has a responsibility to ensure that
there is all the evidence that is required and that is a balancing
act which adjudication officers have to try to achieve in their
business.
Chairman: Thank you. I think I will
address my next question to the Treasury. I see from paragraph
4.20 that the percentage of claimants in Northern Ireland is more
than twice that in Great Britain. Are you satisfied that the higher
level of disability is the main cause of the significant difference
and what steps have you taken to look at this issue with the Social
Security Agency?
Mr Thomson: There is a study, Mr
Chairman, with the Social Security Agency and the Whitehall counterparts,
the Treasury and the Benefits Agency, looking at this. It is something
which does concern us, but it seems to be across a whole range
of benefits that the Northern Ireland take up does appear to be
higher than in GB.
Chairman: We will widen the questioning
now and bring in the rest of the Committee.
Mr Leslie
6. Mr Thompson, in reading through the Report
I am concerned about the management of the administration of the
Disability Living Allowance. You have just said in answer to one
of the Chairman's previous questions that adjudication officers
have to balance speed and accuracy together in assessments. I
would suggest that you actually need a bit more of both. One of
the interesting things that comes out in the Report is the amount
of over-payments. When you assess an application sometimes you
pay more than you should have done and you actually have a very
low rate of recovery in getting this money back. When you pay
that out it is only about five per cent. You have only recovered
about £23,000 out of more than £½ million overpaid.
What are you going to do to tighten that up? What is all this
business about paying out giros and orders and not being able
to trace them after the fact? Can you tell me that there is going
to be more attention to this matter?
(Mr Thompson) I can certainly tell you that. What
happened initially in the Agency was that the emphasis was very
much on dealing with claims as they came in and so for a period
over-payments were just registered but then they were stockpiled
because they just did not have the time or the people in the branch
to deal with it. So for a period up until August 1995 those cases
of over-payment had just been noted and they were going to be
picked up later. When they started to be picked up there was a
difficulty in enforcing over-payment recovery. Not all over- payments
are recoverable. If it is the Agency that has made the error in
the first place then we cannot recover those over- payments and
that is where we have got to start in tackling this.
7. So up until very recently when you overpaid
people you did not actually take any action to recover that money?
(Mr Thompson) We set up a special section in August
1995 to start the process of looking back over those. Since August
1995 we have been dealing with the over-payments as they have
come along and indeed, I can tell you that in the current year
the Report notes that we were only recovering five per cent up
to March 1996 and in the current year that has gone up to 26 per
cent. So we have already made major in-roads into that and we
would certainly regard that as a priority.
8. Are you setting targets for achieving
these amounts of clawback of payments?
(Mr Thompson) Yes. What we have done is we have
set up a central debt recovery unit within the Agency and set
it some very demanding targets for the recovery of over-payments
in general and DLA is part of that. We have set a target this
year of recovering over £4 million against last year when
we recovered over £2 million, so we are already starting
to try and increase our efforts on that.
9. I am glad to hear that. The other concern
that I have about the whole management of your organisation is
to do with the backlog of cases outstanding. Actually, out of
more than 8,700 applications your backlog has increased in the
most recent year to over 12,000 cases. What are you doing to address
that?
(Mr Thompson) The term backlog I do not think
is the term which I think is appropriate. If it takes six weeks
to deal with a new claim then one would expect that at any point
in time one would have six weeks worth of claims sitting not quite
dealt with at various stages.
10. It is worrying to people who are applying
if their case has not been assessed, is it not? You want to make
sure that they have their applications assessed quickly.
(Mr Thompson) The important thing is that we are
meeting our Minister's target for dealing with these new claims.
These targets are set nationally and in the last two years we
have met those targets. So we are dealing with claims within the
time limit that has been set by Ministers.
11. But there are some people who are experiencing
delays of quite a ridiculous length of time. In fact, is it not
true you have had to pay out over £98,000 in compensation
to claimants who experienced unacceptable delays before accepting
their benefit payment?
(Mr Thompson) We certainly have had to pay out
quite a sum of money in compensation and that largely relates
to the period of the early implementation of the benefit. The
on- going number of claims that we would have to pay compensation
on are very small in number.
12. I am wondering how you square up with
the mainland Benefits Agency because in terms of your service
quality, looking at how you compare in performance targets, you
have consistently fallen short in all four areas and you compare
quite favourably with the Benefits Agency performance in Great
Britain. Similarly, if you look at the actual costs of your administration,
the actual amount of money you spend on dealing with all these
applications, you are considerably more expensive over here than
in Great Britain. Why is this? No matter how much money seems
to be spent on your administration, why is it you have not been
able to compare favourably with the mainland?
(Mr Thompson) In fact, if you look at table 5.1
on page 47 you will see that in the last two years, in relation
to the Minister's targets, our performance has been better than
the Benefits Agency in Great Britain. I agree that is marginal
but that is the case. Now, in some of the lower level targets
we have not been as good and I would admit that and in some areas
we need to improve and are improving. I think our main emphasis
is on these high level Minister's targets. In relation to the
cost of administration, we need to benchmark ourselves much better
against the Benefits Agency and we are making arrangements to
do that. I think over the last few years the gap between the cost
that is set out-and you can see that on page 54, figure 4-is starting
to narrow quite well and we would hope that that process will
continue and indeed, we have the figures for 1996/97 and they
have narrowed even further.
Mr Leslie: The gap is narrowing,
but the amount that you actually ask the Treasury for at the beginning
of the year is more is than sometimes you actually spend. I am
very concerned that you are letting the costs of your organisation
slip a little bit. I wanted to ask the Treasury about the estimated
error when the assessment teams go to the Treasury and ask for
money. It is not an accurate figure that they are asking for in
the end. Do you think this is the case?
Mr Thomson: The estimate can only
be as accurate as the information given by the Agency. We are
pleased that as the years progress, since the introduction of
the benefit, the estimates have got considerably more accurate.
I think on overall performance with the Benefits Agency, if you
take admin costs as a percentage of programme costs across all
the benefits, Northern Ireland is actually slightly better than
the Benefits Agency by several percentage points.
Mr Page
13. Mr Thompson, this is a most unhappy
tale stretching over six years. It has cost literally millions
and millions of pounds to the taxpayer. Has anyone been disciplined,
dismissed, reprimanded? Has there been any sanction taken against
anybody for this catalogue of woe?
(Mr Thompson) No, nobody has been disciplined
to my knowledge. As the period of implementation has proceeded
we have put a lot of effort into trying to get it right and I
think that we are seeing the results now of all of that work and
while we accept that mistakes were made and that we could have
done better in the early years, I think that we have done better
and we now believe that we have a much better handle on the whole
administration of Disability Living Allowance.
14. Mr Thompson, you say that but I wonder
what would have happened if there had not been a national audit
investigation highlighting this catalogue of woe.
(Mr Thompson) We had already taken some steps
before the Audit Office Report started and the success of those--
15. Mr Thompson, this is six years on and
there are highlighted items in this Report that I believe would
not have been acted on if it had not been produced for us today.
(Mr Thompson) I have already acknowledged that
the Report has been catalytic in terms of enabling us to make
the improvements that we need.
16. Millions have been lost. It has taken
six years so far and no one has had any formal reprimand.
(Mr Thompson) There has been no formal reprimand.
17. Would you agree that one of the root
causes, if not the root cause, of all the trouble has been the
failure to actually estimate the demand and what was going to
happen?
(Mr Thompson) That certainly put us under pressure
from the start, that is clear and I think it is good that in the
last couple of years we have started to get our estimates much
better, but certainly that is one of the root causes at the start
of the whole process. If our estimating had been better we would
have been in a much better position to administer it more effectively.
18. When did the Agency spot that the rate
of DLA at six per cent was double that of Great Britain?
(Mr Thompson) That is something that has built
up over the period since the introduction of the benefit.
19. When did you get a clue that maybe in
Northern Ireland you were running just a little ahead of the game?
(Mr Thompson) I think that we would have known
that from quite early on because we work with the Government Actuary
Department and that would have shown quite early.
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