Memorandum by the Independent Review Service
1. I have seen your consultation document
and am responding to the invitation to submit views on the issue
of patronage and public appointments.
2. I was appointed as the Social Fund Commissioner
in December 2000 and head an organisation known as the Independent
Review Service (IRS). The views expressed here are my own although
I have discussed them with Senior Managers.
3. The IRS provides an independent final
review of Benefits Agency decisions on the discretionary Social
Fund (Community Care Grants, Budgeting and Crisis Loans) for dissatisfied
applicants. We handle about 30,000 cases each year, clear 97 %
of cases within 12 days and change Benefit Agency decisions in
about 50% of these cases.
4. The discretionary Social Fund was created
by the Social Security Act 1986 and came into being on 11 April
1988. The current relevant legislation is the Social Security
Act 1998. The legislation created a review system in which applicants
could have recourse to an independent review after the Benefits
Agency had conducted an internal review of its first decision.
5. The independent reviews are carried out
by Social Fund Inspectors and the legislation created the role
of Social Fund Commissioner whose statutory duties are described
in section 37 of the 1998 Act as follows:
|37.(1)||There shall continue to be an officer known as "the social fund Commissioner".
|(2)||The social fund Commissioner shall be appointed by the Secretary of State.
|(3)||The social fund Commissioner
| (a)||shall appoint such social fund inspectors; and
|(b)||may appoint such officers and staff for himself and for social fund inspectors as he thinks fit, but with the consent of the Secretary of State as to numbers.
| (4)||Appointments under subsection (3) above shall be made from persons made available to the social fund Commissioner by the Secretary of State.
|(5)||It shall be the duty of the social fund Commissioner
| (a)||to monitor the quality of decisions of social fund inspectors and give them such advice and assistance as he thinks fit to improve the standards of their decisions;
|(b)||to arrange such training of social fund inspectors as he considers appropriate; and
|(c)||to carry out such other functions in connection with the work of social fund inspectors as the Secretary of State may direct.
| (6)||The social fund Commissioner shall report annually in writing to the Secretary of State on the standards of reviews by social fund inspectors, and the Secretary of State shall publish his report.
6. The Social Fund Commissioner is therefore appointed
by the Secretary of State for Work and Pensions. In my case this
was by open advertisement and competition and, as far as I was
aware as a candidate, the process was fully compliant with Nolan
7. The Department for Work and Pensions describes the
IRS as one of its independent statutory bodies. It is not clear
to me whether we are formally classified as a Non-Departmental
Public Body but certainly we have many similar features in terms
of our arms-length operation from Ministers and in the way in
which we are funded and account for our use of resources. We do
not however clearly fit into one of the Committee's classification
of four types of NDPB, although we are probably closest to a tribunal
8. My main purpose is submitting this memorandum is to
argue for a change in the way the Commissioner is appointed. I
would prefer a process in which the Secretary of State of the
Department, whose work I am, in effect, scrutinising, was not
responsible for the appointment.
9. The primary legislation confers the power to issue
Directions and Guidance on the Secretary of State. In effect the
Directions are subordinate legislation (and courts have accepted
this). The Decision Makers and Reviewing Officers in the Benefits
Agency, whose decisions have to be made in accordance with Secretary
of State rules make that decisions on behalf of the Secretary
of State. My Inspectors provide the independent review of the
decisions made in the Agency, which is part of the DWP.
Given that the Commissioner is also appointed by the Secretary
of State it is questionable whether the degree of demonstrable
independence envisioned by Parliament is now evident to the community
10. Inspector's decisions must be impartial and fair
and must be demonstrably so. I monitor their work and find that,
in its delivery, the review meets these requirements. Nevertheless
the institutional link with the Department whose decisions we
review, cast a shadow over the acceptance of truly independent
decision making by Inspectors.
11. I should say immediately that this view has not been
formed because of experience of actual difficulties in operating
independently or of coming under political pressure. The Secretary
of State and the present Minister have been entirely supportive
of the independent role and the work that we do.
12. What does concern me though is the perception of
our customers and the organisations that represent them who, not
surprisingly, tend to draw the conclusion that we must be part
of the Department because of my appointment and the way in which
we are funded. This position is further reinforced by the requirement
for applicants to request a review through the Benefits Agency
rather than directly to the IRS.
13. A further important consideration is the Human Rights
Act of 1998 incorporating the articles of the European Convention
of which Article 6providing for the right to a fair hearing
by an independent and impartial tribunal - is especially relevant
in this context. The relevant body should present an appearance
of impartiality and independence as well as actually having the
qualities. The fact that our review process is subject to judicial
review may be sufficient guarantee of the citizen ultimately having
access to an independent hearing but our independence in this
context would be greatly strengthened if the Commissioner was
appointed by someone else other than the Secretary of State for
Work and Pensions.
14. The following passage from the judgement of the European
Court of Human Rights in Findlay (1997) 24 EHRR 221 at
paragraph 73 makes interesting reading in this context:
". . . in order to establish whether a tribunal can be considered
"independent", regard must be had inter alia to
the manner of appointment of its members and their term of office,
the existence of guarantees against outside pressures and the
question whether the body presents an appearance of impartiality.
. . As to the question of "impartiality", there are
two aspects to this requirement. First, the tribunal must be subjectively
free of personal prejudice or bias. Secondly, it must also be
impartial from an objective viewpoint, that is, it must offer
sufficient guarantees to exclude any legitimate doubt in this
respect. The concepts of independence and impartiality are closely
linked. . . "
15. All of this inevitably begs the question of who should
appoint. I have some knowledge of the changes in the NHS system
where it seems to me that the creation of an independent appointments
commission is a significant improvement although the Chair of
the Independent Commission is still appointed by the Secretary
16. It seems to me that many appointments like mine where
scrutiny of the operation of a Government Department is involved
could be made by an independent appointments commission. The commission
itself could be appointed by the Lord Chancellor (except for appointments
involving scrutiny by the LCD) but it might be better to establish
the independence more clearly of the appointment, if a Select
Committee of the House was involved at the final stage.
17. I have not tackled the question of election rather
than appointment because it seems to me that it would not be appropriate
for the post of the Social Fund Commissioner. Even if you could
find some candidates with the necessary range of skills who were
prepared to stand it is difficult to see how a realistic electorate
could be identified and mobilised. There may well be other roles
however for which election is appropriate.
18. My comments relate very much to the particular role
I occupy and my recommendation that the Social Fund Commissioner
should not be appointed by the Secretary of State for Work and
Pensions is based on two issues:
(a) the need for public confidence in, and perception
of, independence; and
(b) the need to ensure compliance with Article 6 of ECHR.
Using the select committee's classification of NDPB's the
same arguments would not necessarily apply across all four types.
For example there may well be a good case for the Chairs of advisory
NDPB's to be appointed by the relevant Secretary of State. The
distinction here is related to advice as opposed to scrutiny.