Memorandum from the Parliamentary and
Health Service Ombudsman
1. I welcome the opportunity to give evidence
to the Public Administration Select Committee on my Annual Report
for 2007-08 and also on other matters related to the work of my
Office.
2. This memorandum draws attention to the
information contained in my Annual Report about our performance
and supplements that information by providing an update on various
ongoing casework issues of continuing interest to the Committee.
3. It also provides information to the Committee
about the future development of our work, related to the significant
new challenges that we face as a result of the forthcoming reform
of the complaints procedure within the National Health Service
in England.
4. Finally, the memorandum deals with our
major completed investigation and report into the prudential regulation
of Equitable Life, on which the Committee is taking evidence this
Autumn.
OUR PERFORMANCE:
ANNUAL REPORT
FOR 2007-08
5. As the Committee knows, I laid my Annual
Report for 2007-08 and the Resource Accounts for my Office before
Parliament on 6 October 2008. At the same time I published our
Strategic Plan for 2008-11 and the Annual Corporate Resources
Plan. This year's Annual Report includes statistics on enquiries
and investigations, with case studies from those departments and
health bodies on which we have reported. We have now spent a second
year counting casework figures in the same way, so direct comparisons
between years are now possible.
6. In summary, in 2007-08:
— We dealt with 11,698 enquiries during
the year. At the end of the year, we had 1,507 enquiries in hand,
against an opening position of 667.
— We concluded 959 investigations,
including 33 which were discontinued. At the end of the year,
we had 618 investigations in hand, against an opening figure of
617. The number of investigations over a year old stayed steady
at 73.
— 290 of the 926 investigation reports
issued related to government departments and a range of other
public bodies in the UK. 636 reports related to the NHS in England.
— We upheld or partially upheld complaints
in 55% of concluded investigations, reduced from 62% in 2006-07.
This represented around half (49%) of those complaints related
to the NHS in England, and approximately two thirds (68%) of those
related to government departments and other public bodies in the
UK.
7. Our aim during the year was to make significant
progress towards our goal of achieving our aspirational service
standards by 2008-09. As I reported to the Committee in October
2007, performance in the first half of the 2007-08 business year
was acceptable, particularly given the very significant reorganisation
that we had undertaken. However, performance in the second half
of that year fell significantly below our expectations and, at
the year-end, we met only 3 out of 8 of those standards.
8. I have taken a number of steps to recover
the strong position we held in March 2007 and to significantly
strengthen our performance management. Those have shown results
and by the end of September the position had improved substantially.
9. By the end of September 2008:
— We had dealt with 7,382 enquiries
during the half year. We now have 1,371 enquiries in hand, against
an opening position of 1,507.
— We had concluded 406 investigations,
including 14 which were discontinued. We had 438 investigations
in hand, against an opening figure of 618. The number of investigations
over a year rose to a peak of 115 during the first six months
of the year, but has now reduced to 100 from a starting position
of 73.
— 106 of the 392 investigation reports
issued related to government departments and other public bodies
in the UK. 286 reports related to the NHS in England.
10. Our focus in the rest of this business
year will be on doing what is necessary to continue to manage
our workload and to meet the targets and customer service standards
we have set out in our Corporate Business Plan for 2008-09.
ONGOING CASEWORK
ISSUES
11. There are three areas of casework of
continuing interest to the Committee on which I provide an update
below:
Trawlermen's Compensation Scheme
12. The first ongoing issue is the review
by the Department for Business, Enterprise and Regulatory Reform
of the ex-gratia compensation scheme for Icelandic waters
trawlermen, which they are conducting in the light of my February
2007 report, Put together in haste.
13. In my October 2007 memorandum to the
Committee, I reported that this review was still on-going. That
remains the case. Although I have kept in close contact with the
Department regarding the progress of their review, I am disappointed
that this review is taking longer than expected to complete.
14. However, this month the Department informed
me that they expect to make an announcement as to the way forward
within the next few weeks. I await the public announcement of
the Department's intentions with interest and my Office will maintain
regular contact with the Department on this matter. I will keep
the Committee informed of developments.
A Debt of Honour
15. The second ongoing issue is the follow-up
work on my July 2005 report A Debt of Honour, which concerned
the administration of the ex-gratia scheme for British
groups interned by the Japanese during the Second World War.
16. I reported to the Committee last October
that the Government had eventually complied with all of the recommendations
that I made in my report. However, we continue to receive enquiries
from those who are dissatisfied with their ongoing exclusion from
the revised scope of the scheme. We have also received a number
of enquiries in relation to the payments made by the Ministry
of Defence to recognise the injury to feelings caused by the indirect
race discrimination which the courts held had occurred in relation
to the scheme.
17. I remain in dialogue with the Ministry
of Defence over these enquiries and will inform the Committee
if anything arises from that dialogue which the Committee might
find it useful to know.
Continuing care
18. The third ongoing issue is our work
on retrospective continuing care reviews. As the Committee knows,
I have published three reports into NHS funding for long term
care: in February 2003, December 2004, and March 2007.
19. I welcomed the Department of Health's
publication in June 2007 of the National Framework for NHS Continuing
Care and NHS Funded Nursing Care in England, which came into effect
on 1 October 2007. As the Committee knows, I recommended the implementation
of such a national framework in my 2004 report on continuing care
funding.
20. Work in the NHS in England on the remaining
retrospective continuing care reviews (that is, where all or the
majority of the period for which funding is claimed is before
1 April 2004) has taken place, with a fall in the number of outstanding
cases from about 1,500 on 30 November 2007 to just over 100 cases
on 31 March 2008.
21. However, this meant that the target
date of 31 March 2008, set by the Department and by which time
Primary Care Trusts and Strategic Health Authorities should have
completed all such retrospective reviews, other than certain exceptional
cases, was not met.
22. The Department has kept my Office informed
of its work with the NHS to clear this backlog and has recently
told us that, as at 1 October 2008, there were over 50 non-exceptional
cases remaining. I will keep the Committee informed of developments.
A SIGNIFICANT CHALLENGE:
REFORM OF
THE NHS COMPLAINTS
PROCEDURE
23. The Committee knows that I first called
for a simpler system of NHS complaint handling in England in my
March 2005 report Making things better? The complaint handling
functions currently carried out by the Healthcare Commission will
cease on 31 March 2009 and the NHS complaint process will then
become two-stage, with the first stage being local resolution
and the second being referral to my Office.
24. We began planning for this very significant
change in January 2008, as soon as the Department of Health confirmed
that the successor body to the Healthcare Commission, the Care
Quality Commission, would be operational by 1 April 2009.
25. This change to the system represents
a welcome opportunity for my Office to bring its expertise in
complaints handling directly to the NHS, where I will expect to
see much improved local complaint handling. However, the change
will also mean significantly higher volumes of complaints, particularly
in the early stages while local resolution systems are developing.
26. The key challenges for my Office include:
— dealing with a significant increase
in the number of complaints against the NHS, with no reduction
in service or quality standards, and recruiting and deploying
a sufficient number of high calibre staff to deal with this increase;
— putting into place effective transitional
arrangements and conveying consistent messages about these arrangements
to complainants, NHS bodies, and other stakeholders; and
— building good working relationships
with the Care Quality Commission, so that good quality complaint
handling is expected and valued by the new regulator.
27. With five months left before the new
process begins, we have made significant progress:
— An NHS Complaints Transition Board
has been established, chaired by me, and with members from the
Healthcare Commission and the Department of Health. We have agreed
a way forward to ensure a smooth transition to 1 April, focusing
on casework, staffing and communications.
— Financial sanction has been received
from the Treasury for this year to meet additional costs for my
Office arising from work on the transitional arrangements; we
have also received "in principle" sanction for future
years in respect of the additional resources required to address
the increased workload arising from the new arrangements.
— We have acquired premises in Manchester
as a second site for my Office, enabling us to deal with the expected
increase in workload. This will open in early January 2009.
— We have conducted a major recruitment
exercise, which resulted in 4,500 applications, and we are planning
for new staff to join us from early January.
— We have reviewed our structures,
systems and processes to ensure that we have the flexibility and
resilience to meet successfully the volume and type of NHS complaint
work that will come to us.
28. This represents a significant challenge
for the work of the Office, which we are committed to meeting.
I have no doubt that the Committee will want to keep a close eye
on our progress in implementing our part in the new NHS complaints
procedure in England.
EQUITABLE LIFE
29. On 16 July 2008, I laid the report of
my investigation into the prudential regulation of The Equitable
Life Assurance Society before both Houses of Parliament. My report,
Equitable Life: A Decade of Regulatory Failure, was published
the following day.
30. The publication of that report—which
is the longest produced by my Office and is perhaps the most complex
report we have published—led to significant parliamentary,
public and press interest, all of which continues.
31. As the Committee knows, I made ten findings
of maladministration and determined that this maladministration
had led to injustice to those who had complained to me. That injustice
took the form of financial loss, where that has occurred, lost
opportunities to make informed savings and investment decisions,
and a justifiable sense of outrage.
32. Where injustice has resulted from maladministration
on the part of a body within my jurisdiction, my general practice—outlined
in our Principles for Remedy—is to seek to restore people
to the position they would have been in had no maladministration
occurred. Where that is not possible, my approach is to recommend
that appropriate compensation should be paid.
33. The Committee will know that I received
submissions from those bodies whose actions had been investigated
which sought to persuade me that I should not adopt my usual approach
on this occasion. Those submissions, and my assessment of the
rationale underlying them, are set out in full in Chapter 14 of
Part 1 of my report.
34. The Committee takes a general interest
in questions of remedy following our reports and in whether Ombudsmen
should approach such questions in the same way as the courts.
That Chapter of my report might therefore be of particular relevance
to its deliberations.
35. I was not persuaded by the submissions
of the public bodies and applied instead my usual approach to
questions of remedy. I made two recommendations to government,
namely:
(i) that, in recognition of the justifiable sense
of outrage felt by those who have complained to me about the serial
regulatory failure which my report identifies as maladministration,
the public bodies should apologise to those people for that failure;
and
(ii) that the Government should establish and
fund a compensation scheme, with a view to assessing individual
cases and, where appropriate, providing compensation.
36. In making these recommendations, I recognised
that it would not be appropriate for compensation to be paid merely
for losses associated with the stock market or where no injustice
had arisen from maladministration.
37. Whether, and in what form, injustice
has been sustained by a particular policyholder or annuitant could
only be determined on an individual basis, not least because much
depends on when, how, and how much an individual invested or saved
with Equitable Life. Accordingly, my recommendation was that the
aim of any such compensation scheme should be to restore anyone
who had suffered a greater loss, relative to that which they would
have suffered had they invested with another company, to the position
they would have been in had no maladministration occurred.
38. I also recognised that my recommendations
raise issues related to the public interest and to the potential
impact that acceptance of the recommendation to establish a compensation
scheme might have on the public purse. Decisions as to whether
such a scheme would be in the public interest and as to how public
resources should be spent are matters for Parliament and Government
and not for me. I therefore invited government and Parliament
to consider further the issues that were raised by my report and
by my recommendations.
39. However, I gave guidance within my report
as to the timescales within which I consider it would be reasonable
to expect any such scheme both to be established and to conclude
its work. I also set out some principles—independence, transparency,
and simplicity—that should guide the operation of such a
scheme.
40. The Government has said that it will
respond to my report in the Autumn. We have no further information
about when that response will be forthcoming.
41. The feedback we have received since
publication of the report has largely been positive. Despite the
time that it took to complete the investigation and to publish
the final report, it would appear from the letters we have received
that our general practice of involving complainants in all stages
of investigations and of keeping them informed of developments
as investigations progress was particularly welcomed on this occasion.
42. Other correspondence that we have received
has sought to make connections between the subject matter of our
report and the current position in world markets and with the
ongoing discussions that have arisen about the role of financial
regulation. We have had to explain that I have not investigated
events which took place on or after 1 December 2001, that on that
date the system of regulation changed fundamentally, that our
knowledge in this area is limited to the specific case of Equitable
Life in the earlier period, and that we have no basis on which
we could speculate about current events.
43. However, that is not to say that I do
not recognise the importance of the wider context in which the
subject matter of my report is placed. Indeed, I have accepted
an invitation to attend on 1 December 2008 a meeting of the Petitions
Committee of the European Parliament, at which that Committee
wishes to explore my report in the context of the report of that
Parliament's special committee of inquiry into the Equitable Life
affair.
October 2008
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