Examination of Witnesses (Questions 160-179)
MR PETER WRENCH, MR DOUG SMITH AND MR STEVE ORCHARD
THURSDAY 20 JUNE 2002
SIR MICHAEL BUCKLEY, Parliamentary Commissioner for Administration and MR ALAN WATSON, Deputy Parliamentary Commissioner for Administration, in attendance.
160. Staying with the Legal Services Commission for a moment, if I may. Before I came here last year I worked for a large city centre Citizens Advice Bureau and was involved in overseeing a contract. I was surprised when you said it was January 2001 before you discovered the computer systems and the information which flowed from them was not accurate. I could have told you and anybody who was involved in receiving any of your services could have told you long before that, that was a problem. What was going wrong inside that you did not know about it? 1998 these systems came in.
(Mr Orchard) Parts of the organisation were aware there was a problem. I was pinning down my own involvement in the solutions to the problem. You will be aware, also, from your experience, that certainly from 1997 there were major pressures on what was then the Legal Aid Boardwhich became the Commission in April 2000to reform the totality of the legal aid scheme. In practice, that was done from the beginning of 1999 through to the end of 2001, over a three year period, and that process is continuing but not with the same intensity. There is no doubt that the senior management in the organisation, because there was a manifesto commitment from the Labour Party in the 1997 election to create a community legal service, for example, was very heavily focused, if not entirely focused, on the reform programme. There is no doubt that there was not the same attention as there would otherwise have been by senior managers on the Board of the Commission on the core business, and I fully accept that.
161. I am conscious that we are examining the Ombudsman's relationship with your organisations and it is easy to get diverted into the detail of the problems which manifested themselves. I do think this issue of computers needs to be pursued a little further. You have each said there is a commonality there. Is there any commonality in the way you went about acquiring your computer systems? Could each of you explain perhaps if we are talking about in-house systems and in-house expertise that was inadequate? Are we talking about consultants who failed to deliver on the contracts you had? Is there one firm involved? I would like to know a little bit more about what commonality there is on the computer failures.
(Mr Orchard) Do you want me to start?
(Mr Orchard) As you will know from your experience legal aid is a very complex business, covering both civil and crime and the different bits of legal aid under those general headings. We had to replace the old historical systems anyway and we decided to go for comprehensive Corporation Information System (CIS). We did it with a mixture of contractor staff and in-house staff. The system itself consists of one and a half million lines of code, so it is quite a big and complex system, most of which has worked perfectly satisfactorily. The functionality that I am talking about around the statutory charge is 10,000 lines of code but it is by far the most complex part of the system, and that is the bit which has let us down. We could not say as a consequence of that the whole system is a failure. Since we have put it in, and you have mentioned already the date, of course we have moved on to contracting and we have had to develop new systems to manage contracts, both of which, the two main ones, are working perfectly satisfactory. On the whole our record in terms of implementation, and indeed changebecause there are always changes going on to legal aid, the latest being major changes in financial conditions, for example, from last December which have to be dealt with, also the introduction of Family Graduated Fees, all those sorts of thingsall of those things have gone to time and to budget. What we have got is a major problem in a relatively small area of the functionality.
163. Mr Smith?
(Mr Smith) A slightly different picture in the Child Support Agency. When the Agency was created effectively it bought a Child Support computer system off the shelf from, I believe, the State of Florida. It is a rather archaic system and qualifies for entry in a heritage museum at this stage. It is held together lovingly with chewing gum and string. When we legislated Child Support Reform in 2000 we reached a Private Finance Initiative agreement with EDS to build a new computer system from scratch to provide the support for the new legislation. It is that computer system which was due for delivery earlier this year which is currently delayed. Until we have the new IT system in place we are proceeding with the somewhat inflexible existing system.
(Mr Wrench) I alluded earlier to the contribution that IT difficulties made to the problems IND faced three or four years ago. The issue there was a move towards a very ambitious new case working system that would make a major shift from paper based systems to computer supported case working decisions. In support of that, and to help finance that, there was a planned run down in specialised skilled case workers because the computers were going to be doing more in the future. The system did not materialise, the case load was going up, we had fewer case workers to deal with it, so that was a combination of events which reinforced each other and drove the organisation to a very difficult situation. What we have done since then is to build up the manpower and the skills and ensured we can process cases on paper at least. And, rather than go for a big "all singing all dancing" IT approach we have built up incrementally interlocking blocks of IT which support areas of our operation. That has produced less dramatic benefits than might have been achieved by what was planned in the past but we have found it is much more reliable and secure to go fairly slowly in that way and build it up gradually.
164. Perhaps I did not hear all the answer but was that a contractor arrangement that was at the core of you being let down?
(Mr Wrench) Yes, we were working with a private sector contractor who we continue to work with.
165. That enhances our understanding of the commonality there. You were each let down in various ways by the private sector computer consultants or contractors. I guess, therefore, each of you has got some expensive litigation in place to recover the cost of the damage that has caused you, is that the case?
(Mr Wrench) We have settled with them now and have a continuing working relationship. I would not want simply to point the finger at the private sector organisation. I think in the past IND and the Home Office had an over-rosy expectation of what the system was capable of delivering and the timescale for doing it.
(Mr Smith) Ditto. We have a joint responsibility of delivery so we do not point the finger at our private sector partner. We have a contract yet to negotiate for the PFI price.
166. Okay. Can I change the subject slightly, Chairman. I think each of us as Members could give you graphic tales of bad experiences our constituents have had at the hands of each of your Agencies. I have two full-time members of staff who I would gladly reduce to one overnight if you did not exist, and the problems with you did not exist. We take comfort in knowing that if all else fails and we have not been able to get any redress for our constituents through the channels which are open to us, we can always assist with a reference to the Ombudsman, and we encourage that, sadly we have to encourage that very much more often than I would want to. I am really disappointed to discover in various ways, when the Ombudsman finds against you and says there has been maladministration my constituents are not getting the redress the Ombudsman thinks they should get. Perhaps we could start with the CSA, and each of you could answer the question, why not?
(Mr Smith) My understanding is, certainly on the Ombudsman cases that I have been involved in, that we have responded positively to Sir Michael's recommendations, and indeed from time to time stepped outside the agreed guidelines to deal pragmatically with areas of concern that Sir Michael has properly raised with us on cases, and reach agreement through him.
(Sir Michael Buckley) I think that is fair to say, I do not think there are many, indeed if any cases on which we failed to reach agreement with the Agency and other agencies concerned on redress. The problem is sometimes it takes too long. In particular we are finding some difficulty, since we are talking about the CSA, because it seems to us that there has been a tightening up in the interpretation of the rules. Yes, sometimes we need to persuade the CSA to go outside the rules, and usually we are successful in that but it takes time. What I would wish is there was a more flexible approach to redress. The starting point of all our cases, when we are talking about redress, is there has been maladministration. Therefore, the onus is very much on the Agency which is guilty of maladministration to take a reasonably flexible and generous view of what is most appropriate to put that right.
167. Yes. If there are maladministrative outcomes then the fact is that you might say "Oh, well we did not breach the rules" but if it produces maladministration and those consequences for individuals, is there not a prima facie case for redress of some kind?
(Mr Smith) If there is maladministration there is a clear case for redress to the means. The question is whether the case always falls within the rules which were properly agreed with Treasury and with Sir Michael's office around the payments of redress. Occasionally it can be a genuine disagreement on the judgment that is formed on an interpretation of such facts. It is appropriate at that stage that we do discuss those issues properly and fully with Sir Michael and his staff to make sure, firstly, that we are both deducing the same facts from a series of events and, secondly, that we are forming the same judgment on the application of those facts in terms of maladministration or no maladministration. At that stage I have responded I think sensibly and pragmatically to the suggestions which have been made about redress, whether or not they fall within our existing rules. I always reserve that right myself to step outside the rules where it is appropriate to step outside the rules because at the end of the day I am accountable to this Committee and the Public Accounts Committee for doing so and these decisions are taken. I just pick up one point that Sir Michael made. I do not think there has been a tightening up of rules in the Agency in relation to redress. What I have insisted in the Agency is that the rules are applied consistently in handling redress and in handling complaints and that where people choose to step outside the rules that is routed through me because I have the accountability at the end of the day to step outside the rules. I think it is inappropriate to give flexibility in this quite important area of sensitive expenditure too far down the line and therefore the tightening, I think, that Sir Michael has seen has not been trying to be constrictive in the rules, we have not done that at all, we have simply tried to ensure that rules are applied and applied consistently. Where we choose to step outside the rules that comes across my desk rather than somebody else's desk.
168. There is a general issue here, is there not? The Ombudsman is the expert on maladministration, or some people would say you are the expert on maladministration. The Ombudsman is tasked, his trade is to find where maladministration has occurred. Surely when he finds maladministration has occurred redress ought to kick in, it is as simple as that, is it not?
(Mr Smith) Yes, it is as simple as that, Sir, at that level. I think there may be a genuine discussion, and there is from time to time a genuine discussion between officials on whether, on the given facts of the case, this does amount to maladministration or does not amount to maladministration. At the end of the day, Sir Michael's view tends to be paramount. He will cut through it on his side and say "Hey, guys, we have looked at this, this is maladministration". At that stage I put my hands up and respond pragmatically and sensibly to that and pay the appropriate level of redress.
169. He is saying you are too inflexible.
(Mr Smith) I do not think we are inflexible. I think it is proper that if I am responsible for this area of Government expenditure that we do satisfy ourselves properly that maladministration has occurred and that redress at the level being suggested is appropriate in that situation. I accept fully it would be good if we could speed that process up. I am more than happy to engage with Sir Michael's office to see how we can speed that process up. I think there is a necessary tension there to ensure this area of sensitive public expenditure is properly controlled. I think that tension is a necessary tension.
170. Do you want to say a further word?
(Sir Michael Buckley) I think we may be getting into semantics, Chairman. Much of what has been said is impossible to disagree with. Of course there must be proper financial control and he is ultimately responsible for the expenditure of the Agency as its accounting officer. Without getting down to individual cases certainly there is evidence, we think, that the Agency could have been more flexible and more imaginative. For example, there are times when there is not an established payment pattern and the cause of that is maladministration. That is not in our view a valid argument for saying that there is an obstacle to paying redress. I think there is a good deal of common ground between us. I repeat, when there has been maladministration it seems to me that the onus is on the Agency guilty of maladministration to put that right. Secondly, I think that one can get into too much detailed argument over what are quite small sums of money and what we are concerned about is the spirit which is to put the citizen who has been the victim of maladministration into the position of what could reasonably have been assumed to have happened if that maladministration had not taken place.
171. Yes, that is what you assent to, is it not?
(Mr Smith) Yes, that is what we are in final agreement about and, indeed, in principle we have followed that consistently in dealing with complaints throughout the Agency in the 19 months that I have been Chief Executive. The key points I have drilled into my people consistently are where there is maladministration, where there is error, you apologise, you put things right, and you need to consider redress. That is a principle which is embedded. The only proviso to that is you consider redress strictly within the terms of the guidance given and if you feel it is appropriate to step outside that guidance then that issue is escalated and I decide whether we step outside the guidance or not.
Chairman: We will keep an eye on this.
172. I will just continue for a moment, Chairman, with the CSA, if I may. You were very clear, Mr Smith, about not bending the rules, the rules are there. You seem to have great confidence in the perfection of the rules that you have available. I have to contrast that with what you describe as an environment where you are dealing with vulnerable individuals in great complexity, every case being different because it is a different person in every case. I do not see how you can run a system that has got an assumed perfect set of rules without flexibility. Are you the only person who is allowed flexibility to bend those rules? That is what you seem to be saying to us. There ought to be surely a huge volume of cases which give you a library of precedent that your staff ought to be able to refer to around what you describe as bending the rules.
(Mr Smith) I am not so sure if we are talking about bending the rules in relation to redress or bending the rules more widely.
173. Are they not the same thing?
(Mr Smith) Well, partly. We do publish very clearly our guidance on redress, that is available to everybody. In a sense there is an irony developing in this because if we break published rules then effectively we are guilty of maladministration. There is almost an implicit expectation that we should publish the rules, and you follow the rules. That is why it is so difficult to embed too much inflexibility, which you are talking about here, into the general day by day approach to business. It is the fact that people have not followed the rules which often gives rise to the complaints we are handling.
174. Yes, but the Ombudsman gave you the case. The problem arises because there is no established payment pattern. There is no established payment pattern because your systems are maladministrative. It is a circular argument.
(Mr Smith) There is no established payment pattern sometimes because our systems have failed.
175. You are invoking rules to justify maladministration.
(Mr Smith) No, I am simply saying sometimes there is no established payment pattern because an individual chooses not to pay rather than because we have maladministered a case. There will be cases where there is no established payment pattern because we have maladministered and where that situation is the case we have offered redress.
Chairman: I am sure we will revisit this.
176. I wonder if the other two witnesses would like to comment on the point about inadequate redress or failure to respond adequately to the Ombudsman's finding on maladministration?
(Mr Wrench) I hope our relationship with the Ombudsman's office is pretty good. We have an agreed structure for occasions when we will give financial redress and I think that usually flows through quite properly. IND is perhaps slightly different from some other organisations in that redress is not necessarily financial. It is often a case of correcting a wrong decision, giving people status that they are properly entitled to. But I hope we are sufficiently flexible in recognising when people have had a particularly raw deal and giving them some compensation for that.
177. Does Sir Michael want to comment on that?
(Sir Michael Buckley) Yes, Chairman. I think it is fair to say we do have good working relationships with IND and, on the whole, we find they respond well to our enquiries. When we have identified maladministration they usually provide redress. There are obviouslyas one would expect occasionallyareas of disagreement and discussion between us but we manage to reach a satisfactory outcome.
178. Is that true of the LSC, Sir Michael?
(Sir Michael Buckley) Again I think we have managed usually to reach the right outcome in the end but we have had some lengthy discussions. A typical case will be when, for example, the opponent in a case has received legal aid which should not have been given or the certificate has not been revoked or discharged as it should have been, one then gets into interesting counter factual discussions about what would have happened if the right thing had been done. I would accept that those cases can be complicated. All I would say is cases may be complicated, they may raise important issues but they still need to be got on with in good time. I think that is the issue between us. We need to resolve these cases as quickly as we can whilst recognising there are complexities and there are significant issues of principle to be addressed sometimes.
Chairman: Let us move on. Sir Sydney.
Sir Sydney Chapman
179. Chairman, like Mr Heyes I realise that we want to focus on the relationship between your organisations and the Ombudsman and the complaints about maladministration. In the maze of cases over the years that I have had to deal with as a Member of Parliament, yesteryear the main ones were under the categories of housing, social security, pension problems and possibly planning and in recent years, there is no question about it, immigration and asylum has gone right to the top. It is not an exaggeration to say that last weekend at my advice centre of the 20 cases over a dozen were to do with immigration and asylum. Of course there are just as many housing cases, planning cases and social security problems. Incidentally there has been an increase in complaints about the Health Service as well. Easily immigration and asylum tops the list. Of course the CSA is a new phenomenon, generally, which was brought in in the late 1980s. The one thing which strikes me is the utter complexity of these cases and, if I may say so, the longevity of them. It is not just a question of resolving a case. Let us just take an immigration case. The status is refused. The right of appeal is dismissed, let us say. You think that is the end of it, oh, no, the solicitor for someone will come in and say "They did not have all the information" or "They misunderstood the information, we will have to write again" and so on and so forth. The purpose of all this is to sympathise with the problems you have got but it is how we overcome those problems which I am interested in and teasing out of you certain things. First of all, whether you are running the LSC, the CSA or the IND, you have built up great experience, you are technocrats full stop. You are human beings. You must want to pour out to ministers suggestions that they should make to change the system of dealing with immigration, child monitored children and so on, is that so? Do you have a good relationship with ministers where off the record you can, say, not exact justice, you do not necessarily always get that in magistrates courts, I imagineI am not speaking from experience, yetdo you think there could be more rough justice to get more expedition into the process? Would you all like to comment on that?
(Mr Orchard) Yes, I would love to. Immigration and asylum in particular is difficult because it is spread across two ministers and two departments. IND, the Home Office, deals with initial decisions; appeals are dealt with under the Lord Chancellor who has control of the court service, the removals are dealt with by the Home Office again. The fact is that this whole area is politically so emotive that the process and the optimum working of the process sometimes takes second place. It is compounded by the fact that legal aid is a big issue and a big growing issue in asylum, because of the appellate process, and legal aid is seen as money for lawyers rather than help for clients. There is quite a lot of baggage to be overcome before you can devise a workable and sensible process which optimises the efficiency of it. The overriding issue for me is that final decisions on individuals' rights, particularly as sensitive as asylum, cannot be left to relatively junior civil servants. There has to be a judicial and court oversight. The challenge I think for all of us involved in the system is to arrange things so that the initial decision is as robust as possible, that any appeal that flows from it is dealt with as rapidly as possible, with proper legal advice and representation, and that appeals after that are only granted in quite exceptional cases, and that removals in appropriate cases flow as quickly as possible from the appeal. It is about designing an end to end process recognising that it will never be as smooth and simple and as straight forward as the Daily Mail or others might wish it.