Examination of Witnesses (Questions 188 - 199)
WEDNESDAY 1 APRIL 1998
MR JOHN
LUTTON, MS
URSULA BRENNAN
and MR BILL
FARRELL
Chairman
188. Good morning, ladies and gentlemen. Can I call the
public session to order and welcome our guests from the Department
of Social Security? We are very grateful for Mr Lutton and his
two colleagues joining us this morning. We are also grateful that
we are going to have the opportunity to speak to Baroness Hollis
on Tuesday. I think the original plan was that we would have her
in conjunction with officials but in fact it is better for us
in terms of the way the inquiry has turned out. I know it was
for her convenience but we were delighted to be able to accommodate
her and we are looking forward to seeing her next Tuesday. Mr
Lutton, I wonder if you could just introduce your two colleagues
for the record and explain a bit about what their roles are in
relation to Disability Living Allowance. Then we have some areas
that we want to cover and we can start the questions after you
have introduced the subject as you best feel appropriate.
(Mr Lutton) Thank you. My name is John Lutton.
I am the director of field operations in the Benefits Agency for
Scotland and the northern half of England, which includes disability
benefit operations over the whole country. On my right is Ursula
Brennan, who is the policy director for disability benefits, working
in DSS headquarters. On my left is Bill Farrell, who is a project
manager for the Benefit Integrity Project, working in the disability
benefits directorate at Blackpool. I thought it might be helpful
if I opened up by saying something about the nature of DLA and
the special changes that it presents in administering the benefit
from an operational perspective?
189. Please.
(Mr Lutton) It may be worth recalling firstly
the purpose of DLA, which is to provide help towards the extra
costs of disability with reference to care and mobility needs
in particular. Of course, there is a wide spectrum of disabling
conditions and a much wider range of the effects of those disabling
conditions and individual needs. As a result, unlike most of the
social security benefits that we deal with, which tend to be factually
based in the main, awards of DLA can be variable and quite subjective,
often involving a ratcheting up of subjectivity which starts with
the claimant's perspective of individual needs against the disabling
condition, continues with further evidence perhaps provided by
the carer or medical evidence and then goes on to the adjudication
officer's decision which is a further interpretation of that evidence.
The sufficiency of the evidence can be a subjective issue in itself,
one of the reasons why the benefit was created. We introduced
a second tier review which gives the claimants an opportunity
to provide further evidence to support the claim. That can of
course lead to the award being made without necessarily meaning
that the decision was wrong initially. Similar considerations
can apply at later stages—at the appeal stage, for example—and
of course there are further interpretations of case law or legislative
changes, all of which can have quite a dramatic effect on how
subsequent claims are dealt with and how operations across the
disability benefits directorate continue. All of this means a
highly complex benefit for staff to administer and for customers
to understand, with apparently inexplicable reasons for awards
being allowed or refused at times because decisions turn on those
individual circumstances and the evidence given to support the
impact of the disabling condition on individual needs. The challenges
for my organisation are to be as consistent as possible with the
decisions that we take on new claims or indeed review of existing
cases, and to deal with customers as carefully and as sensitively
as we possibly can when we come into contact with them, because
we are well aware that, when an adverse decision is made or when
a difficult inquiry has to be made, either due to the nature of
the benefit itself or because frankly we simply got it wrong at
some stage in the process, the implications for the disabled person
and for the carer can be devastating. We are very conscious of
that. From an operational perspective, it is an inherently difficult
benefit for our staff and for our customers and one that they
continually have to work at, both in terms of refining the policy
and the process and in terms of improving performance in the Benefits
Agency. The background to the Benefit Integrity Project touches
on several of the issues which are mentioned and you will no doubt
want to develop that further. I think that is probably all I want
to say by way of opening remarks.
190. Thank you very much. That is very helpful. I am
particularly interested in the provenance of the Integrity Project
and I want to start by asking you one or two questions about the
chronology of that. It is quite complicated. Basically, I want
to get to the bottom of how it was that the Department came to
bring this Integrity Project into being in the overlap of the
prorogation of Parliament. I want to try and get clear in my mind
what steps were taken to engage in what I would consider to be
necessary consultation with the relevant parties and pressure
groups involved. Correct me if I am wrong but around March or
April 1996 there was a benefits review carried out on DLA under
the anti-fraud initiative. Indeed, the November 1996 Budget announced
social security measures in the course of the Chancellor's statement
so there was an expectation built up at that time and it was all
at that stage focused really, as far as I can see, on anti-fraud.
The key sentence that I want to focus on that was uttered by the
then minister, Alistair Burt, on 23 January 1997 in the Social
Security Fraud Bill, Committee stage, is: "We will be involving
disability groups and the Disability Living Allowance Advisory
Board in discussions on the findings and as we consider what action
needs to be taken." That is on the record. We have been told,
because we asked them, both by the Disability Benefits Consortium
and the DLA Advisory Board, that neither of them was consulted
at any stage about anything in the Integrity Project, if I understood
their evidence, and I would want your comments on that. There
is a more fundamental point that I want to address. We then go
on to 12 February which was the publication of the benefits review
of the DLA and that was in a parliamentary answer. By 12 February,
we are approaching the election at this stage, and we are getting
more detail about what the benefits review of the DLA is going
to look at. Then, in March 1997, as is always the case, the Cabinet
Office produced general action guidance as to how ministers should
conduct themselves in the course of the hiatus between the prorogation
and the state opening of the next Parliament which says, amongst
other things, "While essential business must continue, by
custom Ministers should observe discretion as regards the initiative
of any new action of a continuing or long term character."
That was in the public domain in March 1997 and presumably was
known to the Department. On 21 March, Parliament was prorogued.
On 8 April, Parliament was dissolved. On 28 April, while Parliament
was dissolved, a selection and preview of first postal cases was
sent out. That is according to a parliamentary answer given on
9 March. We then have the election on 1 May. Ministers were appointed
on 5/6 May and the first postal questionnaires were issued on
6 May. The question I have for you is a complicated, almost constitutional,
one: what authority did officials have to promote this scheme
the way they did against the background of what Mr Burt said,
giving assurances about consultation, when there was no ministerial
oversight of the programme? The Benefit Integrity Project was
nevertheless rolled out with some allegedly disastrous consequences
as a result, some of which we are picking up by way of amendments
as we go along. What was going on in the Department and to what
extent was this programme overseen by ministers at all in the
period between the publication of the benefits review of the DLA
on 12 February and when ministers were then reappointed on 6 May
in the new government?
(Ms Brennan) Can I take you through the chronology?
I think mostly what I want to say is the same as what you have
said but there are some slight differences, as we see it. First
of all, it is important to make clear where BIP came from. It
was not simply the result of the benefit review that caused us
to introduce BIP. BIP was something that emerged out of a number
of strands of activity within the Department, the first of which
was simply our continuing experience of administering DLA and
AA since the introduction of DLA in 1992. We had started to accumulate
information about what was working and what was not working from
a whole variety of sources, including some research that we had
undertaken. In the mid-1990s, we did some special work which we
called safeguarding, when we looked at the quality of decisions
at initial decision stage and at review stage, (what happened
to cases after they had been adjudicated,) because we were concerned
about whether cases were drifting out of accuracy, if you like,
after the initial award had been made. We did make some changes
as a result of that work. In 1996, we decided that we would not
make awards of the higher rate of mobility component unless we
had clear medical evidence, which was something we had not had
in all cases before. We were engaging in a variety of activities
to try and improve the quality of the decision making. We had
looked at first tier decision making, when we made a first decision.
BIP was about what we do about cases where an award has been made
and there might be concern that the case was either wrongly awarded
in the first place or might have drifted into being incorrect,
through a variety of reasons over time. Then we had the DLA benefit
review. The benefit review was one of a number of reviews that
we had been undertaking across all benefits as part of the security
and control programme. That was carried out in 1996 and was published
in February 1997, but by then we were already working up the Benefit
Integrity Project so it was not completely sequential here, (ie,
not—something happened, then we thought about it and then
created something else). Indeed, it had been our intention to
consult and to talk to disability organisations about the BIP.
I do not think it had been our intention to consult them about
the design of the BIP, but it had certainly been our intention
to take them through the results of the benefit review and to
talk to them about the BIP project. Indeed, we wrote out to them
with copies of the benefit review and said, "We would like
you to come to a meeting on 25 March". Unfortunately, that
meeting had to be cancelled as part of that sort of election purdah
period. There had been an intention to have that meeting and discussion
and that is indeed why Alistair Burt, in his speech on the Fraud
Bill, said that we would be involving disability groups in the
discussions on the findings of the benefit review. Then, the general
election was called and we had to cancel that meeting. We rearranged
it for what I understand was the first available date which was
29 May. Then there was the general election itself. New ministers
came in. They were committed to the spending totals that they
had inherited from the previous government and they had to look
at a number of inheritance measures which made up our spending
line within the Department. The Benefit Integrity Project was
known as a spend to save measure under the security and control
programme, by which we mean that administrative costs for doing
the reviews and doing the visiting and so on were funded on the
basis that there was an expectation of savings because of the
incorrectness which we believed was apparent in the system. That
BIP project was part of our funding expectations for the future.
I think it is fair to say that when we came to actually launching
the BIP, which we did not do until 6 May, which was when we started
issuing the questionnaires, there was a question of should we
have waited until we had had the meeting with the disability organisations
on 29 May. I think it is fair to say that we completely underestimated
the controversy that the BIP would entail because what we were
doing was sending out postal questionnaires to people and the
questionnaires were built around the actual claim form for DLA.
We quite often send people questionnaires who are on benefit.
We do it for the other benefits quite a lot. In the security and
control programme, we have a range of ways of going out to claimants
of income support, for example, and checking that their entitlement
is still correct. In DLA, we use questionnaires for people who
have got renewal claims. If they have had a limited period award,
we send them out a questionnaire. It is a way of determining their
entitlement for the future. I think it is fair to say that we
felt that the postal questionnaires, which were the first phase
of BIP, were not and should not be seen as a hugely controversial
activity. We were not changing any rules; we were simply saying,
"You applied for DLA. Here is a questionnaire similar to
the original claim form. Could you fill that in and send it back?"
It was on that basis that we decided to go ahead and launch the
thing on 6 May. As it happened, no sooner had we launched it than
a House of Lords judgment in the cases of Halliday and
Cockburn caused us to suspend everything. In fact, we had
not done any adjudication on those BIP cases at the point a fortnight
later when we actually stopped the whole process. It was while
it was stopped that we then had the meeting with the disability
organisations and took it further from there.
191. What worries me is you say—I think I wrote
it down accurately—"We underestimated the controversy".
Who is the "we" in that context? As far as I understand
it, there is no ministerial control of this of any kind.
(Ms Brennan) When I said we underestimated the
controversy, I meant that officials underestimated it in informing
ministers as to what we were doing. I think it is fair to say
that what we said was, "What we are doing here is sending
out postal questionnaires". This is something that we do
across a range of benefits and we did not appreciate that it would
cause the controversy that it did.
192. Was any active consideration given to the Cabinet
Office general election guide about any new actions of a continuing
or long term character in the execution of that policy in the
hiatus while Parliament was prorogued?
(Ms Brennan) We were simply designing the project
in that period. We were completing the design. We were not actually
doing anything. We did not send out any questionnaires until 6
May.
193. A selection and preview of first postal cases occurred
on 28 April. A parliamentary answer on 9 March 1998 suggests that
there was a lot of quite high level political activity going on
and I am just trying to work out what the ministerial authority
was for the launch of this Integrity Project.
(Ms Brennan) My understanding is clearly that,
at the point of the general election being called, we did not
launch the BIP. We clearly could not launch the BIP until after
the election. That is why we did not start it until 6 May. We
carried on the design process. We did not just put all the files
in the cupboard and sit on our hands, as it were. We carried on
refining and I believe that we carried on working on the forms
and so on but we did not actually do anything with it. In other
words, what we did was to get ourselves ready to say, when a new
government comes in, "Here is this thing called BIP".
194. On the same day that the first ministerial responsibilities
were announced on 6 May, the first postal questionnaires were
issued, presumably before DSS ministers like Baroness Hollis were
ever anywhere near the first day at their desk.
(Ms Brennan) I do not want to get into advice
that was given to ministers. I think this might be a more appropriate
subject for us to discuss when Baroness Hollis comes next time,
to the next session, but I can assure you that we did not launch
the BIP. We worked on the BIP in the run up to the election. We
were going to have a discussion with the lobby. We cancelled that.
We had not started any actual activity in doing the BIP. We continued
the development work. After the election, we did restart it and
we restarted it on 6 May.
Chairman: There are just two quick factual questions
and then we will move on. I agree with you. I think it is something
we may want to raise with the Baroness.
Mr Pond
195. I am still a little puzzled. We had a commitment
from a minister to consult the various organisations and the Advisory
Board on it and therefore that was an indication that ministers
themselves considered this a sufficiently important and perhaps
controversial project to go through a process of consultation
on. Then you are telling us that, despite the hiatus during the
election when you decided—and I think most of us here would
accept it was appropriate—not to go ahead with a consultation
meeting which would have been in the middle of a general election.
You nevertheless decided—and I think the Chair is putting
his finger on it—to undertake very considerable activity
towards that move on 6 May when the project really got underway,
even before ministers had any opportunity to get their teeth into
this. Why was it that you felt that it was appropriate to cancel
that consultation meeting because of the election hiatus, but
you considered it appropriate to continue with much of the preparatory
work for this project during that period and then to go ahead
without the consultation which ministers had given a commitment
would take place? I do not understand that.
(Ms Brennan) The invitation to the lobby groups
was to come to the meeting on 25 March. We sent them a copy of
the benefit review and the intention had been to present them
with the BIP project. It was already well worked up by then. It
was not the intention to say, "Here is the benefit review.
Let us discuss what we are going to do about it", because
the BIP did not simply emerge from the benefit review; it was
something that we had been working on over previous months. The
intention had been to have that meeting and to say, "Here
is the benefit review and we can talk about that. Here also is
a project that we are proposing to undertake". Precisely
what was done between 25 March and 1 May—the BIP was pretty
much ready to be rolled out. I think we probably would have rolled
it out from the beginning of the financial year but obviously
we deferred it because of the election and rolled it out thereafter.
196. What was the hurry to roll it out then before any
consultation process? What was the great hurry to make sure that
6 May was the critical date for this? I still do not understand
that. If you had waited that long, why could you not have waited
a little longer to fulfil that commitment for consultation and
to allow ministers really to get their teeth into this and work
out what they wanted to do in policy terms?
(Ms Brennan) I think there are two things to say
about that. In terms of why we wanted to proceed in rolling it
out, we were concerned that, from a variety of pieces of evidence,
we knew that there was a significant level of incorrectness in
this benefit. The BIP was an important measure for us in actually
tackling that. We were anxious not to delay that longer than was
strictly necessary. We took a judgment in advising ministers that
the issuing of questionnaires of this sort was something that
we did across a range of benefits and that therefore, while we
had intended and would have liked to have had that meeting with
the lobby and to have explained to them what we were going to
do, that need not prevent us from getting on with something which
was designed to safeguard the integrity of the benefit.
Mr Wicks
197. Does this not give us a useful insight into how
Whitehall regards consultation, because you postponed the consultation
for political reasons, which we understand, but you nevertheless
continued with the project. At one stage you used the word "consultation"
but at the next stage you talk about it as a meeting where you
were going to tell the disability groups what you were going to
do, which is a funny definition of "consultation". For
reasons which we understand, you could not have the consultation
but you fully intended to go ahead with it anyway and go ahead
you did.
(Ms Brennan) Actually, the Minister himself used
the word "discussions" rather than "consultation".
198. Does not "discussion" suggest a two way
process?
(Ms Brennan) I think, in relation to the Benefit
Integrity Project, what we were talking about here was something
where, as managers of this benefit and the integrity of the spending
on it, we had information which suggested that we had a significant
level of incorrectness from the benefit review. We had evidence
from our own safeguarding work and from our experience of administering
the claims and from other research evidence that there was this
significant level of incorrectness. I think we believed that it
was our responsibility actually to tackle that. The management
of claims post award is a straightforward affair in every other
benefit and is not regarded generally as a controversial issue.
What I come back to really is that, from our perspective, the
BIP was simply a concerted piece of work around looking at claims
after they had been awarded. We did not regard it as a kind of
project about which, at the time when we launched it, we would
have engaged in extensive consultation about how we did it. We
saw this very much as a matter of good business practice and good
management of the benefit.
199. Have you done anything more recently to strengthen
the Department's understanding of the needs of people with disabilities
and their possible sensitivities about this, given that you had
admitted to this Committee that you got this one very badly wrong?
(Ms Brennan) Indeed. Since we launched the BIP,
we have had a variety of sessions of consultation with organisations,
of and for disabled people, and have worked extensively through
the BIP material and amended how we are actually handling it.
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