ANNEX
Letter from the Secretary of State, Department
of Social Security, to the Chairman
I attach the Government's response to the Committee's
report on the inherited SERPS issue. This problem arose when people
were given wrong, misleading or incomplete information about rule
changes introduced by the previous Government in 1986.
It is clear that the Department failed to ensure
that the policy changes were properly implemented or that information
provided to the public was accurate and complete. I said in March
that as a matter of principle when someone loses out because they
were given the wrong information by a Department they are entitled
to expect the Government to put it right. And I announced the
Government's proposals for doing this on 29 November.
We have already deferred the change to the inheritance
rules until 6 October 2002 so no one will be affected by the policy
change before this date. The measures that I announced on the
29 November 2000 will give full protection to everyone who has
reached state pension age by then. We also propose transitional
arrangements for those approaching retirement age. My officials
have sent you a draft of the regulations to give effect to our
proposals.
To prevent this problem from happening again we have
set about changing the Department. I mentioned this in my evidence
to your Committee. For the future we want to ensure that people
are told about changes to pension policy so that they can plan
for their retirement in full knowledge of their position.
The very serious mistakes made following the 1986
inherited SERPS changes should have been sorted out 14 years ago.
The measures we have put in place and are proposing will sort
out the mess and prevent it from happening again. A detailed response
to the Committee's conclusions and recommendations is attached.
Clearly some of the matters you raise concern the Government as
a whole and the response therefore reflects a cross Government
view.
Alastair Darling
9 February 2001
Government Response to the Fifth Report
by the Select Committee on Public Administration 1999-2000 (HC
433)
Administrative Failure: Inherited SERPS
(a) We conclude that the failure to amend leaflet
NP32 initially was due to human error, but an error made possible
by a wider failure of administration systems. (Paragraph 12)
1. The Government agrees with the Committee that
a failure of administrativesystems led to the Department of Social
Security (DSS) giving wrong information from 1987. As the Committee
is aware, steps are being taken to strengthen the systems for
ensuring accuracy in future. All benefit leaflets have been reviewed
and a new process introduced to ensure all DSS leaflets are written
in plain English and that they reflect what the law is at the
moment. The Social Security Advisory Committee is scrutinising
a selection of the Department's information products, looking
at the assurance processes and considering how information and
advice is provided. Within the Department audit provisions will
be set up to ensure checks are completed systematically.
(b) We record our astonishment that even after
the Bill team intervention in 1995, those politically and administratively
accountable for the operation of the Department were not aware,
or made aware, of a problem that cost billions of pounds to correct.
(Paragraph 16)
2. The DSS has taken action to prevent such administrative
failure happening again. The new dedicated Pensions Organisation
and Working Age Agency will bring together all the services currently
provided by DSS for key client groups; including in particular
the establishment of end-to-end accountability from policy decision
to implementation. The Pensions Organisation is intended to achieve
a fundamental improvement in attitudes towards customer service.
Pensioners are a distinct and important client group with their
own needs and preferences, and DSS is developing a new service
to meet their individual needs.
(c) We believe the failure of the Department between
1996 and 1999 to take adequate action to inform their staff and
the public perpetuated an already unsatisfactory situation. (Paragraph
17)
3. The planned extension of the DSS's computer systems
to give frontline staff access to rules and guidance via the DSS's
Intranet and the new process introduced to strengthen the systems
for ensuring accuracy of leaflets and involvement of external
parties will help to prevent such unsatisfactory situations happening
again.
(d) We welcome the Government's commitment to
improving the antiquated and unreliable IT systems within the
welfare system, which clearly contributed to administrative failure.
(Paragraph 18)
4. The Government agrees with the need to replace
the IT systems and welcomes the Committee's acknowledgement of
their commitment to replacing the DSS's antiquated systems. Replacing
the DSS IT system is a massive task which is now underway.
(e) The fact that virtually every witness who
appeared before us offered apologies for what happened is a testament
to the extent of this failure. (Paragraph 19)
5. The Government has always acknowledged that there
was no excuse for the DSS giving wrong information from 1987.
(f) We welcome the moves to reorganise the DSS
while noting that the return of operational matters to the Department
might be thought to be at odds with the original purpose of the
agency system. (Paragraph 20)
6. The Government is pleased that the Committee has
welcomed the reorganisation of the DSS. The redrawing of its organisational
boundaries has given the Department a much sharper focus on the
effective delivery of outcomes for Pensioners and other client
groups. It has clarified the role of the Benefits Agency as a
service delivery agency and has established clear responsibilities
for end-to-end management of services from design to delivery.
The new structure remains consistent with the original agency
concept of executive day-to-day delivery of services within an
effective framework of Ministerial control and Parliamentary accountability
(g) If Benefits Agency staff are to provide the
public with more advice, they need both training and the technology
to enable them effectively to implement initiatives such as the
'one stop shops'. Communication will have to improve if the joining-up
of Government is to work. (Paragraph 21)
7. DSS has suffered from a lack of investment over
the last 20 years. As the Committee has said, action is needed
to improve the communication of information to DSS's 90,000 staff.
Funding is now available (in SR2000) for modernising much of DSS's
computer systems, and for extending those systems to give frontline
staff access to rules and guidance via DSS's Intranet.
(h) It is our opinion, certainly in cases such
as this, that if Select Committees are unable to question those
directly involved, then their investigatory function is severely
curtailed. It is clearly important that when retired officials
are asked to appear before Select Committee they are provided
by Departments not only with the access to papers, to which they
are entitled, but also with any further support they might need.
(Paragraph 28)
8. The Government acknowledges the right of Select
Committees to call whomsoever they wish, and it recognises that
there may be exceptional cases where, without a former Minister's
or retired civil servant's personal recollection, a Committee's
knowledge and understanding may be incomplete.
9. The Government believes however that such cases
will not be common. The basic principle of accountability to the
House remains that it is the current Minister who is directly
accountable to Parliament both for their own policies and for
the actions of their Department. A former Minister clearly cannot
give evidence on behalf of the Government, which must be the responsibility
of current Ministers. Officials who give evidence to Select Committees
do so only on behalf of their Ministers and under their direction;
the evidence of retired officials cannot therefore form part of
a Minister's accountability to the House since they are no longer
representing him or her. It can only be an occasional supplement
to the formal account offered by Ministers and their serving officials.
10. There are sound reasons for the convention that
the current Ministerial or official post-holder gives evidence
on behalf of the Government. Only the current holder has full
access to the full analytical resources of the Department in question,
both to provide a thorough briefing to the Committee and to represent
the views of Ministers of the day. The life span of any piece
of work very rarely coincides with one office holder, and only
the current incumbent can give a Select Committee the whole story
from a single source. The incumbent is also in a position to put
matters right where errors have occurred. Conversely, retired
officials are unable to provide evidence on developments since
their retirement, and they do not necessarily have the time available
to serving civil servants to prepare for such hearings. Nor does
the Government believe that it would be right effectively to invite
retired officials to break the obligation of confidentiality owed
under common law to their past employers, for instance, by giving
evidence about policy advice which they or others have offered.
11. In the event of their being called to give evidence,
former officials may have access to papers, and Departments stand
ready to provide them with support if they request it. However,
it should be recognised that an appearance before a Select Committee
is a considerable burden requiring a great deal of work for a
private individual, regardless of any assistance that they receive.
12. The Government therefore remains of the view
that, except for the unusual case where an individual's personal
involvement and recollection is critical to an issue, it should
be for current Ministers, or officials on their behalf, to consider
the relevant papers and account to Select Committees.
(i) Doctrines of accountability and responsibility
are central to parliamentary Government in Britain but the case
of inherited SERPS illustrates the gap that exists between theory
and practice. We believe that one of the lessons from this case
is that steps should be taken to ensure that this gap is filled.
(Paragraph 29)
13. The Government believes it is important to distinguish
between the inherent difficulty in establishing the course of
events, many of which took place more than a decade ago, which
unfolded over a period of years and which were overseen by a previous
administration, and issues about the system of accountability.
14. It has long been recognised that the chain of
accountability is broken when events come to light after a change
in the political party in power. Current Ministers cannot be held
responsible for the actions of Ministers of a different Government.
Equally, there may be obvious difficulties about seeking to hold
former Ministers to account. The Government believes that the
proper course is to hold the present Minister and serving officials
liable to give an account of what happened, within the conventions
including those relating to the papers of a previous Government.
15. In the SERPS case, despite the accepted difficulty
in investigating events, which took place a long time ago under
a previous administration, the Government notes that:
- ministers
and officials alike have accepted responsibility for wider administrative
failures;
- the
DSS has set about putting the situation right;
- individuals
affected will of course have redress.
(j) We believe that the failure to inform the
public was a systematic failure of the Department. We therefore
concur with the Ombudsman that the obligation for redress is with
the Department and that redress should be on a global, rather
than an individual basis. (Paragraph 31)
16. The Government's proposal for redress was announced
by the Secretary of State on 29 November 2000. Regulations will
be laid before Parliament in due course.
(k) We welcome the Secretary of State's commitment
to this Committee that we will be consulted on the draft regulations
governing redress and be invited to respond to them. (Paragraph
36)
17. The draft regulations relating to the new proposals
have been sent to the Committee.
(l) Our fear is that the original maladministration
in this case may well now be compounded by a redress scheme that
has all the makings of an administrative disaster. (Paragraph
39)
18. On 29 November 2000, following consultation on
the protected rights scheme, the Secretary of State announced
new proposals that replace the scheme to which the Committee referred.
(m) We welcome the Secretary of State's assertion
that in future the public will be given more information about
their entitlements and his commitment to introduce individual
pension statements. (Paragraph 40)
19. For many years DSS has offered a service to individuals
who wanted to know about their likely state pension entitlement.
In 1987 a more comprehensive, dedicated, centralised forecasting
service was introduced. A new service is planned for October 2001;
working in partnership with employers and pension providers, the
DSS will provide customers of participating schemes with a statement
of their current and projected entitlement to state pension with
their existing annual statements. This will also provide the opportunity
for the Government to give people more information than it has
done in the past about pensions and the choices they can make.
The DSS is considering what further information it can provide
for people both with these statements and through other means.
For example, the Department is writing to all pensioner households
to inform them of the plans announced on 29 November 2000 for
the amount of State Earnings-Related Pension Scheme (SERPS) that
widows or widowers can inherit from their spouse. The letter is
designed to ensure that all pensioners are aware of these new
arrangements and that the change will be effected automatically.
Further steps to ensure that others are aware of the proposals
will be taken.
(n) We agree with the Liaison Committee that pre-legislative
scrutiny is a valuable addition to Parliament's range of tools
for holding the Executive to account and for improving the quality
of legislation. (Paragraph 41)
20. The Government is pleased that both the Liaison
Committee and the Select Committee on Public Administration agree
that pre-legislative scrutiny is valuable. The Government explained
the constraints on the preparation of bills for such scrutiny
in its response to the Liaison Committee Report (CM4737). Nonetheless,
the Government is committed to publishing bills in draft where
this is appropriate.
(o) We should like to see Select Committees, or
special committees constructed for the purpose, undertaking regular
post-legislative scrutiny. (Paragraph 43)
21. The Government notes that Select Committees already
have the power to conduct post-legislative scrutiny, if they choose
to do so, and some have held such inquiries. The Government has
already indicated its willingness to consider the case for particular
ad hoc committees on crosscutting subjects, if the Liaison Committee
so requests.
(p) We recommend that Ministers, when introducing
legislation, provide the House with a timetable showing how they
intend to implement it. (Paragraph 43)
(q) We recommend they should also be required
to publish Post-Legislative Reports (PLRs) on the implementation
and effects of particular pieces of legislation. The timetable
for PLRs should be contained within the implementation plan as
part of the original Bill. (Paragraph 43)
22. The Government is committed to providing information
about the implementation of legislation as soon as possible. But
implementation planning often involves consultation with interests
outside Whitehall, and requires regulations to be laid before
Parliament; these may impact on any timetable for post-legislative
scrutiny. Departments are already encouraged to evaluate their
policy implementation and these evaluations are often published.
(r) We therefore recommend that each Department
should institute a programme to review each piece of legislation
to check departmental literature and internal procedures are consistent
with the legislation and Ministerial statements. (Paragraph 44)
23. The Government recognises the importance of ensuring
that supporting documentation is consistent with legislation,
and will draw the Committee's concern to the attention of all
Departments. The good practices of the DSS described in paragraphs
1 & 2 will be shared with other Departments. The Government
does not however consider, on cost effective grounds, that the
case for a formal Government-wide review of the kind that the
Committee envisages has been made.
(s) This is certainly an extraordinary case. It
represents a political and administrative failure that will cost
the public purse many billions of pounds. It also represents a
story of injustice to individuals. It reveals the gap between
policy-making and its effective implementation. It underlines
the long-term costs of not investing in proper infrastructure
and keeping IT systems up to date. The present Government inherited
the problem from its predecessors and has taken steps both to
improve administrative systems within the DSS and to establish
a redress scheme. We welcome these steps while warning about a
redress scheme that is fraught with administrative difficulties
and suggesting that alternative - and simpler - approaches should
be examined. It is important that one administrative failure,
of astonishing proportions, is not compounded by another. (Paragraph
45)
24. The Government welcomes the Committee's recognition
of the steps it has taken to improve administrative systems. In
the Secretary of State's announcement of 29 November 2000, he
announced alternative proposals to provide transitional arrangements
for those approaching state pension age and full protection for
all pensioners.
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