Examination of Witnesses (Questions 1
- 19)
THURSDAY 20 OCTOBER 2005
MS ANN
ABRAHAM, MS
TRISH LONGDON
AND MR
BILL RICHARDSON
Q1 Chairman: Could I call the Committee
to order and welcome our witness this morning, Ann Abraham, the
Parliamentary and Health Service Ombudsman. She is accompanied
by her colleagues, Bill Richardson and Trish Longdon. We are very
happy to have you along to the Committee to talk about your Annual
Report and matters associated with it. You have given us a very
helpful memorandum. Do you want to say something briefly to get
us going?
Ms Abraham: Yes indeed. I would
like to make a few opening remarks. I have said in my memorandum
that I and my colleagues, Trish Longdon, my Deputy Ombudsman,
and Bill Richardson, my Deputy Chief Executive, very much welcome
the opportunity to give evidence to the Committee this morning.
It is particularly valuable to bring both "old"—if
I may call members of the Committee old—and new members
of the Committee up-to-date with our work. We look forward to
continuing the productive relationship that we have always had
with the Committee. My memorandum tries and, I hope, succeeds
in giving the Committee a concise but comprehensive overview of
our work over the past year and also to try and update you on
some of the work in hand and the issues that we think will be
of interest to you. You also have an Annual Report and Accounts
for 2004-05. I am particularly pleased that we were able to lay
both the Annual Report and the Accounts before Parliament before
the July recess for the first time. We have also produced a thin
volume, which is our three-year strategic plan, which we are very
pleased with as well, particularly as it has enabled us to obtain
for the first time—and obviously this is subject to parliamentary
approval—Treasury sanction for a three-year settlement of
our funding and that is very important to us in terms of forward
planning. What I did want to do was just spend a couple of minutes
giving the Committee some further information about our workload.
Recently one or two MPs have raised concerns with me and, I think,
with you, Chairman, about delays in allocating cases for investigation
in my office and I just wanted to explain why that is and also
tell you what we are doing about it to put things right. I wanted
to start by reminding you of our performance in the year that
we did report on Parliament in July, the 2004/05 financial year.
We did meet all of our targets and service standards with one
exception for that year and they were the targets which the Committee
will have seen last year in the business plan. So we dealt with
85% of parliamentary cases within six months and 95% within 12
months. With the health cases, which by their nature tend to take
a bit longer, we dealt with 62% within six months and 87% within
12 months. We met those targets. At the same time as dealing with
the casework we undertook a very substantial programme of change
to provide the basis for longer-term improvement. We introduced
a new business approach for handling complaints and we successfully
put in place a new computer system to help us manage our day's
work and we did that on time, within budget and it works. With
all that going on we still managed to complete 2,886 investigations
and that is just nine fewer than the 2,895 we completed in the
previous year. What made the difference was that during that year
we also had a very large increase in our incoming caseload. We
took on a total of 4,189 new cases, an increase of 30% on the
previous year and that meant we carried forward a substantial
caseload into 2005/06. Whereas we started the 2004-05 financial
year with just over 1,000 cases in hand, we started this financial
year with over 2,000. So that is why we have had some delays in
allocating cases for investigation. What are we doing about it?
We know that the Ombudsman's office is the last resort for many
complainants and we cannot compromise the quality of our decisions,
so we have had to gear up to deal with the increase and some of
that is about more resources but some of it is about working differently
and working better. As I have mentioned, we have completely overhauled
our approach to complaints, we have raised the skill levels of
staff, we have recruited and inducted new investigators, we have
also recruited and trained a body of part-time associate investigators
to help us handle the current backlog and to give us the flexibility
to respond quickly to any unexpected peaks in our future workload
to avoid a similar backlog building up again. We actively manage
the queue. We do what we call triage: we identify urgent complaints
that we need to give priority to and we make active enquiries
on others while they are queuing so that the complaint is ready
for analysis when it is allocated to an investigator. We had to
make sure we had the resources we needed and our discussions with
the Treasury have been constructive and productive and we now
have, as I have said, a three-year settlement which allows us
to plan not just for this year but the following two years as
well. So we have no complaints about resources. We are doing everything
we can to eliminate the backlog and I intend that it will be very
substantially reduced by the end of the financial year. Our service
standards mean that we should operate with a work-in-hand figure
of around 1,200 cases at any given time and we intend to be close
to that figure by the end of March 2006. Of course, this is a
demand-led business that we are in and it all depends on whether
we have got our assumptions right about the incoming workload
for the rest of the year. As you would expect, we monitor our
performance regularly as we go through the year and we will report
to you and Parliament on our overall performance for 2005-06 when
I lay my Annual Report next year. So, in summary, what I wanted
to say to the Committee is that I and all of my staff have been
as concerned about the delays in allocation as you and other Members
have been. We are taking action to remedy that situation and we
have the resources that we need to do that. I hope that is helpful,
Chairman. I and my team would be happy to answer any questions
on any aspect of our work.
Q2 Chairman: Thank you for that.
That really is helpful. Could I congratulate you on the report,
too, because I think it is helpful having the Parliamentary and
Health Service work brought together in one volume that is wonderfully
presented, nice to read and makes sense. You tell us that because
of the way that you are doing it now we cannot compare what is
happening now with what has happened previously because you have
re-engineered the whole complaints system. Could you say something
about how you are counting complaints now, how you are dealing
with them and, therefore, why it is not possible to compare but
why it will be a better system in the future?
Ms Abraham: Indeed. I think the
reason why it will be a better system in future is that we will
actually be reporting on all of our work in a way that I hope
will be simpler and clearer. We are following an approach that
certainly the Local Government Ombudsman took some years ago and
one that I have been used to in another context, which is that
when we look at a case, decide it is in jurisdiction and make
enquiries we call it an investigation. Under the previous system
of classification we drew a distinction between cases that we
looked at informally and ones that we called statutory investigations
where we produced statutory reports and there were very, very
small numbers of those because we only went into that statutory
investigation mode if our enquiries were not being productive.
Very often, particularly on health cases, we would do a huge amount
of work and make enquiries to discover that we felt that there
was not any substance of complaint in terms of what we could uphold
and we would take sometimes weeks and months to do that. Then
we would write to the complainant and say, "We're not going
to investigate your complaint". That caused a great deal
of distress because people would say "Why isn't my case worth
investigating? What have you been doing all this time?" when,
in fact, we had been making lots of enquiries and I think in any
kind of common sense, plain English understanding we had been
investigating. Every time we now accept a case and do some work
on it we call it an investigation. We are looking at the work
in the round. We are, hopefully, making it simpler to understand
for complainants and the parties but also for the wider audience
and yourselves.
Q3 Chairman: When we write to you
now about a case, the first thing we always want to know is whether
you are going to accept it for investigation. Are you saying now
that in fact you are going to accept far more things for investigation
because you are not making that formal rule about what an investigation
is and that you will take anything that is within jurisdiction,
is that right?
Ms Abraham: If it is within jurisdiction
and it is not premature. What is interesting for us is that if
the Regulatory Reform Order goes through and gives us explicit
powers around the whole early resolution area we may find that
there emerges from that a rather different category of what I
call—and we will have to find another term for this because
it is too long—"intervention short of an investigation".
If something is within jurisdiction and it is not premature in
the sense that it has not been to the Health Care Commission or
the Department has not had a chance to look at it, then once we
have made those preliminary checks, and they are considerable
checks sometimes, we will call that a case that is accepted for
investigation. Some of them will not take very long to investigate,
but we will then be in investigation mode and we will have all
our powers available to us once we have accepted something for
investigation.
Q4 Chairman: When we used to have
these conversations we always used to end up talking about a "Rolls
Royce" system that the Ombudsman offered because she would
do these very long and detailed investigations once you took a
case on. As I understand it you are still going to have some Rolls
Royce investigations but you are going to have a lot of Ford Fiesta
ones as well, are you not?
Ms Abraham: I am a Volkswagen
person as you know.
Q5 Chairman: The people's car! How
are we going to decide who gets the Rolls Royce treatment?
Ms Abraham: I am always worried
about this Rolls Royce analogy because there are so few of them
around and so few of us can afford them. The quality of our investigations,
which is why I make the analogy that I do, is something that we
cannot compromise on. Sometimes historically we have perhaps not
drawn the line at the point when actually taking the investigation
further does not add very much. The tension that every Ombudsman
has to address—and Trish and I have had lengthy conversations
about this—is the quality-quantity conundrum; there is a
tension there. Quality obviously is important. It is particularly
important when you are at the end of the line for many, many complainants,
but there are times when you can make an intervention which is
quicker and more effective without necessarily going into the
whole formal reporting type of mechanism. We are seeing a number
of themed investigations and I have reported a bit upon that in
my memorandum and there are certain investigations where, given
the nature of what we are looking at and the implications of our
findings well beyond the individual case, I think those sorts
of investigations will get the Rolls Royce treatment. I think
there is a very high standard of investigation that we can do
for a lot more cases. It is quite interesting to see how this
is playing through now in the way our work comes through the office.
For example, in our new approach we have put huge emphasis on
talking to the complainant very early in the investigation to
understand precisely what it is that is concerning them and to
make sure that we have got that understanding correct and that
we do continue to keep complainants and obviously Members informed
in the course of an investigation, but that we do not find ourselves
investigating a whole raft of things that are not the main beef
for the complainant, something else is. Interestingly, we are
already seeing quite a dramatic drop in what we call "post
decision correspondence" because we have thrashed out early
on what the issues are and therefore we are not getting letters
after we have issued a decision saying, "But I didn't really
want you to look at that".
Q6 David Heyes: You have said that
you have got a robust, adequately funded three-year plan in place
and you made the comment that it is demand led and therefore there
are some uncertainties about it. I want to ask you about the assumptions
you might have made about the removal of the MP filter in relation
to that because intuitively you expect that if that happens there
is going to be a huge increase in demand. What are the consequences
of that for your robust plan?
Ms Abraham: I think our growth
assumption in caseload going forward is 12% a year. We have made
no assumptions about the removal of the MP filter. Certainly where
we are at the moment, I do not detect any sign of change on that
front in the immediate or indeed perhaps foreseeable future. You
will be aware that we have made changes in the way we communicate
with complainants and we communicate with complainants and MPs
at the same time now. In terms of referrals, I think it is interesting,
there does seem to be a concern that suddenly if the filter were
to be removed we would be inundated. I do not believe that would
be so. It did not happen when the councillor filter was removed
for the Local Government Ombudsman, and Trish in fact has worked
for the Local Government Ombudsman so she can talk directly about
that. It would be something we would need to absorb. I really
do not believe, and never have done, that my office should be
in the volume complaints handling business. We are the end of
the line. We are hugely interested in ensuring that the NHS and
departments and agencies provide excellent complaint handling
but, more importantly, provide an excellent front-line service.
Therefore, with all of our work and our projections forward we
have said 12% over the next three years because we do not think
that the corner will be turned. If the work we are seeking to
do to see improvements in public service delivery, and complaint
handling as a part of that, is effective then we would expect
to see a downturn in complaints over time.
Q7 Chairman: The work that you are
doing is expanding. The number of cases taken on has increased
substantially.
Ms Abraham: It did last year,
but there has been nothing like the same increase in the first
six months of this year.
Q8 Chairman: You are carrying this
very substantial backlog of cases which you were talking about
earlier on. Just in a nutshell, when are you going to get rid
of it?
Ms Abraham: I think the figure
I said was anything over 1,200 cases we would see as a backlog.
We hope to be within spitting distance of the 1,200 by the end
of March and certainly in the course of next year.
Q9 Chairman: You have talked just
now about the MP filter. The Government is now proposing there
should be a Regulatory Reform Order which would do the thing which
you have argued for and others have argued for over time, which
is to enable the different Ombudsmen to work together more closely
in removing some of the legislative barriers to doing that. Does
the Regulatory Reform Order give you everything you want apart
from direct citizen access?
Ms Abraham: I suppose in a nutshell
I think I would say yes, for now. I am very much aware that the
public sector Ombudsman arrangements—and I go beyond my
office when I say that—will be 40 years old in 2007. The
Regulatory Reform Order is helpful, it goes a long way, it does
some very valuable things, but it does seem to me that 40 years
on from the establishment of the Parliamentary Ombudsman might
be the time to have a rather more comprehensive look across the
piece at what an Ombudsman fit for the 21st Century would look
like. I would say that post civil justice reform, post human rights
and post freedom of information, actually maybe we ought to be
starting that wider debate and thinking about where that might
take us for 2007 with perhaps a blueprint for the future.
Chairman: I think you are inviting us
to do some work on that.
Q10 Mr Burrowes: In the context of
many of your recommendations not being fully accepted, particularly
the Debt of Honour report and Tax Credits, and wanting to look
and change and become more efficient, where would you see the
problem? Is the problem the growing resistance from the Government
in terms of accepting these recommendations?
Ms Abraham: First of all, can
I say that I do not think that the Government has not accepted
many of my recommendations. I think the Debt of Honour report
is highly exceptional. That is one of the reasons I laid it before
Parliament. In my memorandum I have invited the Committee to reflect
on the Government's response because I think constitutionally
it is significant and it is highly exceptional. With Tax Credits,
I have read Mr Varney's evidence to the Treasury Sub-Committee
last week and I am still unclear about the Revenue's position
in terms of my findings in that report and we are in discussions.
There are some very clear and direct statements made, but, in
dialogue with the Revenue, I am not sure that the situation is
entirely clear. What I would say is that it is of huge concern
to me to see indications that the Government may be picking and
choosing which of the Parliamentary Ombudsman's recommendations
it wants to accept. That is a matter for this Committee and obviously
I look for and need the support of this Committee in that respect.
I will have been in post for three years next month. It is only
in very recent months that I have seen any indication of the Government's
reluctance to accept my recommendations. I have put the access
to official information cases to one side as being a particular
category, but these cases are significant and, I have to say,
it is not a habit I would like to see the Government getting into
and I am sure the Committee would not either.
Q11 Mr Burrowes: Would you say you
lack teeth as the Ombudsman? Would you give us your views on whether
there should be an additional power to enforce those recommendations?
Ms Abraham: I think you raise
a very important and very timely question. I have been asked by
this Committee before whether I felt that I needed something more
than a power to recommend. In response to that in the past I have
said that given the acceptance rate for recommendations is as
high as it is, 99.99%, then I do not see the need for that. If
that were different and started to change then I would take a
different view.
Q12 Mr Burrowes: This power does
not always have to be used.
Ms Abraham: Absolutely. In my
previous role as Legal Services Ombudsman I did have powers to
make recommendations and to make what were described in that context
as binding orders. I used the latter very infrequently, but I
did use it.
Q13 Julia Goldsworthy: I want to
ask you about tax credits and the discrepancies that there are
between the Ombudsman and the Inland Revenue in terms of what
counts as maladministration and what does not. I just wondered
if you had anything else to add on two specific cases. You said
that there was maladministration in the automatic recovery of
over-payments which is basically a bit like Little Britain
"The computer says no!" and payments stop automatically
in-year. Although it does not get the press attention that simple
overpayments and writing them off gets, obviously it is crucial
to people as they receive them. I just wondered if you had anything
to add about you being wrong to say it was maladministration.
Secondly, I just wondered if you had a view on the Revenue's justification
of automatic recovery. I have got a letter from the Paymaster
General to David Laws in June justifying it which says, "In
practice HMRC has found that in the vast majority of cases where
a claimant disputes, an overpayment recovery is actually the appropriate
outcome. In the light of the above, therefore, HMRC's legal advice
is that it is rational that it should operate a system that includes
a presumption of recovery. The introduction of the rule that each
and every case involving an unidentified overpayment should be
the subject of a detailed investigation would exacerbate delays
in processing claims throughout the system." That is quite
contradictory to your recommendation.
Ms Abraham: It is. What I would
say initially is to draw the distinction between what I think
the letter you are quoting is about and my report. There is the
possibility of a challenge on the lawfulness of automatic recovery
and that obviously is being discussed in another place and I am
not party to that, it is nothing to do with me. I think there
is a test of lawfulness which will presumably play itself out
in another place. The maladministration test is a different test.
We had similar discussions in a completely different arena with
the MoD in relation to the Debt of Honour report which describes
something important which I think we have called "maladministration
short of unlawfulness". My view about this is it is perfectly
possible for something to be lawful but still maladministration.
I think that is the important distinction to draw here first.
What my report says is that it is inherently unfair to move from
a position where an overpayment has been identified automatically
to recover that payment and it is a discretionary decision whether
or not to recover. There are issues of hardship to consider. Therefore,
to have a system which as soon as the overpayment is identified,
recovery is triggered, is unfair and can and does, as we have
seen, lead to hardship and injustice. When I have explored this
further in discussions with the Revenue I have not said that there
should be no automation in the recovery of overpayments. What
I have said is there needs to be some sort of gap/pause in between
the identification of an overpayment and starting to recover it
and an opportunity in that gap for the customer to say, "Excuse
me, I don't agree". That could be an automated gap if you
like. Presumably it is perfectly possible to trigger a letter
which says, "We think there is an overpayment. This is why
we think so. If we don't hear from you we will automatically trigger
recovery in `x' weeks' time." That seems to me to be a reasonable
thing to do and it can be automated. The injustice and hardship
here is proven. It is not a question of saying, "Well, actually
that's the way the tax system works and it would be terribly difficult
to do it another way." There is something about fettering
discretion around discretionary decisions and I think there is
a serious point. Our cases show the effect on the individuals
of hearing that they are going from having a tax credit being
paid at this level to immediate recovery with no opportunity to
say, "Just a minute. That doesn't make any sense." That
is the point I am making.
Q14 Jenny Willott: It has often proved
very difficult for MPs to get clear answers in response to Parliamentary
Questions and so on and to get information particularly about
tax credits, things like the estimates for overpayments and the
number of excess payments in-year. I was just wondering if you
thought this was a systemic problem in that particular area or
if you thought that it was wider and what you felt would be able
to be done to get the Treasury to be more accountable to Parliament.
Ms Abraham: I think I have to
be careful here.
Q15 Chairman: Don't be!
Ms Abraham: I was going to say
to be careful not to try and suggest that my office has a more
wide-ranging role or a role beyond its remit. Obviously my office
has a role in terms of accountability and openness and I think
the Ombudsman in the past has been described as helping Parliament
to hold the Executive to account. When it comes to the wider issues
around levels of overpayment there are other players, not least
the National Audit Office, and others committees, not least the
Public Accounts Committee, whose role is much more centre stage
than mine. We will continue, we have no choice, because we have
a substantial caseload of tax credits cases, to work in this area
and to work with the Revenue in giving continual feedback on what
the cases coming through are telling us and to give them our views
on the changes that they are putting in place to address those
issues on the administration of tax credits. I think your wider
point is a rather more difficult one for me to make any helpful
contribution to.
Q16 Jenny Willott: In your experience
is their reluctance to provide information to MPs in this particular
area a blip or have you come across other cases where it is also
difficult to get information? There does seem to have been almost
a putting up of the barricades to make sure people cannot quite
see what the problems are. I wondered if you had experienced that
in other areas as well or if it was quite specific to the Treasury
and tax credits.
Ms Abraham: I think I would say
in all honesty, with one or two notable and probably public exceptions,
that Government and the NHS provides my office with the information
it needs when it needs it.
Q17 Mr Liddell-Grainger: This whole
thing is a shambles. We are talking about overpayments of £2.2
billion. We do not know what the underpayments are. The system
is not capable of coping with what it was set up to do. Every
MP will have cases on their desks at the moment. It is not able
to do the job, is it? Be indiscrete here!
Ms Abraham: I am never indiscrete.
My report tells the story. When I was before the Committee last
year we talked then about tax credits and I said that we were
in the process of putting together a special report and we took
our time to do it because we wanted to ensure that we had covered
the ground, that we had got our facts right and that we had done
everything we could to tell the story of the hardship, but also
to give a comprehensive view of what we thought might be involved
in putting this right. I am not going to disagree with anything
you say about the description of it. I suppose what I would say
is that I do think, given the scale of the problem as described
in the report, there are no quick fixes here. I have always felt
that this was going to be something that my office would be involved
in for some time to come. I would also say in all seriousness
that one of the things that concerns me as an Ombudsman is seeing
changes, improvements, new systems brought in in impossible timescales
in order to fix problems, when actually they need longer than
that to fix and that trying to do things in impossible timescales
just makes it worse. I think there is something of a long haul
here. Certainly the recent discussions that we have been having
with the Revenue around this are constructive, they are open and
there have been some very frank and helpful exchanges between
us. I think we now understand each other better than we did probably
before this report came out. My office is in for the duration.
I hope that this will not be an area where there is the pressure
for quick fixes which we all know will only lead to compounding
problems.
Q18 Mr Liddell-Grainger: We are MPs
and we sit in the House. We have got the chance to say to Government,
"Right, what is your timescale? What is the long term? Is
it five years or 10 years?". Overpayments will still go up.
Underpayments we do not know about. All we know is that the workload
is getting bigger. What do you call a timescale?
Ms Abraham: I do not know the
answer to those questions.
Q19 Mr Liddell-Grainger: The problem
is we do not either. You are the Ombudsman. What would you suggest?
Can I write to you?
Ms Abraham: I hesitate to put
myself in your shoes. What I think is this is going to take some
time to put right and I think that is years rather than months.
What I do think is that it is important that all of us stay on
the case. The Committee could be back here in six months saying,
"Well, okay, we were being told the corner was going to be
turned and there will be improvements. Well, what have we seen
in six months? What have we seen in 12 months?" For me one
of the interesting areas is the difference in perspective perhaps
that we have around what is the major problem. The cases we are
dealing with primarily are about official error. When we talk
to the Revenue they seem to be talking about customer error. Making
that fit together I think is going to be quite interesting. There
is almost a sense that if customers can be supported in notifying
changes of circumstance and understanding the implications of
not doing so that somehow it will come right. I am not so sure
about that. I think there is a fundamental cultural shift around
seeing this from the point of view of people who need this money.
If they did not need the money there would not be a problem.
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