Article I. UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 331-iSection 1.01 House of COMMONSSection 1.02 MINUTES OF EVIDENCESection 1.03 TAKEN BEFORESection 1.04 PUBLIC ADMINISTRATION COMMITTEESection 1.05Section 1.06Section 1.07 defra's response to the ombudsman'sSection 1.08 report on the single payment schemeSection 1.09Section 1.10Section 1.11
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This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.
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Any public use of, or reference to, the contents should make clear that neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.
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Members who receive this for the purpose of correcting questions addressed by them to witnesses are asked to send corrections to the Committee Assistant.
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Prospective witnesses may receive this in preparation for any written or oral evidence they may in due course give to the Committee.
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Transcribed by the Official Shorthand Writers to the Houses of Parliament: W B Gurney & Sons LLP, Hope House, Telephone Number: 020 7233 1935
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Oral Evidence
Taken before the Public Administration Committee
on
Members present
Dr Tony Wright, in the Chair
David Heyes,
Kelvin
Mr Ian Liddell-Grainger
Julie Morgan
Mr Gordon Prentice
Mr Charles Walker
________________
Witnesses: Ms Ann Abraham, Parliamentary and Health Service Ombudsman, and Ms Gwen Harrison, Director of Investigations, Office of the Parliamentary and Health Service Ombudsman, gave evidence.
Q1 Chairman: Can I extend a warm welcome to Ann Abraham, Parliamentary and Health Service Ombudsman, and Gwen Harrison, Director of Investigations at the Ombudsman's office. I said last time you came here that that would probably be the last time we would see you.
Ms Abraham: You did.
Q2 Chairman: This is almost certainly the last time we shall see you and it gives me another opportunity to say how much we have enjoyed our association with you over the years and value the work you have done. You have given us another special report of unremedied injustice. I am now losing track of them. I believe this is the sixth one in the history of the office and the fourth on your watch.
Ms Abraham: That is right.
Q3 Chairman: We shall talk to the department in question, Defra, because the report is on the payment to farmers under the Single Payment Scheme administered by the Rural Payments Agency. We wanted to have a word with you before seeing the department. We have read your report assiduously and know it inside out and we understand the broad issues involved. Do you want to remind us why you felt the need to bring this to Parliament's attention?
Ms Abraham: I suppose the textbook answer is that I found injustice that was not going to be remedied. It has taken us a very long time to complete this investigation. I had hoped we would not get here, but in the summer of last year we reached the point where it appeared inevitable because we simply could not reach any meeting of minds on the subject-matter. Therefore, our findings of maladministration are challenged, not in their entirety but substantively, in Defra's response. That has implications for their view of injustice. Certainly, it also has implications for remedy. In addition to the unremedied injustice it seemed to me there were some fundamental principles about how questions of maladministration, injustice and remedy should be approached and I would very much welcome the Committee's and Parliament's view on that. Alongside publication of the report it has become clearer to me from other investigations currently under way about complaints related to RPA that there are systemic issues underlying the difficulties faced by complainants. I hope we may have an opportunity to talk about that this morning.
Q4 Chairman: One question relates to the number of people involved. You have taken two cases and dealt with them in detail. I believe there are 22 others of a similar kind on the stocks, as it were. We always have the "floodgates" issue with these sorts of things. What I am not clear about is whether that is the totality of cases that could ever be covered by your complaint mechanism because of the time-barring provisions, or would Defra be entitled to believe that if we went down this route there would be vast numbers of others that would pile in and say they were in the same position?
Ms Abraham: That is an important point and I would like to deal with it. In relation to the complaints covered by this report we received 24 and looked at them in a way that enabled us to take a view about which of them we should identify as lead complaints to ensure every one of the issues in all cases were covered. We took the two complaints from Mr W and Mr Y, as they are identified in the report, as covering issues around mapping, entitlement and payment for the 2005 scheme. As to how self-contained this is, there were 24 complaints, two lead cases, one investigation and 20 MPs from all parties making referrals. Therefore, we have here cross‑party referrals. In relation to this report and these issues at this time as I say in the foreword I think it unlikely that providing a fair remedy to the 24 individuals referred to in my report will result in a flood of complaints from others that will require a similar remedy. The way I see it is that if farmers did not contact their MPs in 2006 setting out what had happened to them and how dreadful it had been but came forward now and contacted their MPs they would be out of time in terms of referral of the complaint to my office. I would then have to think: what are the special circumstances that led to these people not telling their MPs what a dreadful time they had in 2006? It seems to me there is a proportionality issue in terms of resolving these complaints and this report. We are talking of a scheme worth £1.6 billion covering over 100,000 customers and recommendations for modest compensation to 23 people since one has since died.
Q5 Chairman: Are you saying you would not consider any further complaints if people came to you after this?
Ms Abraham: I am saying that by law I am obliged to consider them but they would be out of time and therefore to investigate them I would have to be satisfied there were special circumstances. I struggle to see what those special circumstances would be. If she were here my legal adviser would tell me I have to look at every case on its merits and I do so, but I struggle to see how somebody could persuade me to look into a complaint that he did not say a word about it in 2006 and did not communicate to his local MP.
Q6 Chairman: But not everybody contacts his MP; indeed, one complaint you make all the time is that the MP filter acts as a discouragement. It could be that people contacted Defra's Rural Payments Agency directly to complain about all this. Once farmers see that some will get several thousand pounds in compensation when they have suffered in exactly the same way of course they will pile in and say they want the same thing and they would be justified in doing so.
Ms Abraham: I have given a strong message in the report that I believe the matters I am talking about are remedies for the 24 complainants who went to their MPs and made known their concerns and those MPs were sufficiently concerned to refer those complaints to me. The law is quite tight here. I am not giving an absolute guarantee that I would never take on another case about the 2005 scheme, but I struggle to see the circumstances in which I would do so. I think there is something quite self-contained about these 24 cases.
Q7 Chairman: But if a farmer in a similar position to Mr W or Mr Y went to Defra and said he had read the Ombudsman's report and realised he was in just the same position as those individuals to whom recompense had been provided clearly by extension he should have it too. How on earth could they gainsay a claim like that?
Ms Abraham: What they and I could say is: what is the evidence that they were so seized of these events at the time that they made a complaint to the department and raised it with their MPs and the Ombudsman?
Q8 Chairman: They are probably too busy farming.
Ms Abraham: I am afraid the response to that is if they were not so seized about it such as to pursue those complaints through the system with the Ombudsman, as indeed the farmers in these cases did, I would find it very hard to see why I should consider their cases after all this time.
Q9 Chairman: I am asking why somebody coming to the department could not say that.
Ms Abraham: I think the department could say the same thing and I would not react to that by saying that would be unreasonable.
Q10 Julie Morgan: To me it seems illogical to say that this would involve only a limited number of people and the floodgates would not be opened, and that is not the key argument to make. It appears to be a weak one for the reasons the Chairman has given.
Ms Abraham: My genuine view is that the proof of the argument would arise only if it played itself out. I do not say there will never be any other complaints about the Rural Payments Agency; indeed, there are. I believe there are some systemic issues about the way the agency conducts its business, in particular the way it handles complaints, which will continue to generate complaints unless there is a shift in the way it approaches its business and deals with complaints. There is more to come on all of that. In relation to the 2005 scheme and these events and public pronouncements these are the cases in which people have had the tenacity to go through the system, bring the complaints to Defra and come to us. If people were not so seized about this in 2006 such as to bring it to the attention of Defra or their Members of Parliament it is not unreasonable to say they cannot pile in now. Each of these cases is an individual story; it is not about something that happened to everybody. Although Defra's response suggests we are taking an approach which implies that everybody was entitled to rely on public statements we have never said that. We are saying there were general findings of maladministration and some very specific findings in relation to these people. Therefore, I do not see this as the floodgates suddenly being opened. I have said that to Defra right the way through. I remember back in March 2008 talk about thousands of cases. I do not see it that way.
Q11 Mr Prentice: It is not all time-barred anyway so this is just academic?
Ms Abraham: It is time-barred but it is not an absolute bar. The 12 months runs in terms of bringing the concerns to the MP, but I have to exercise my discretion reasonably. I have been trying to give signals about the sort of approach and thinking I would apply, but again my legal adviser would tell me never to say never.
Q12 Kelvin
Ms Abraham: That is absolutely right. There are two considerations running here. In a way it comes down to the changing nature of Defra's responses to us over the months. Let me try to separate out issues about whether or not the floodgates will be opened by this from perhaps the more fundamental points that I hope would be in the Committee's mind. To summarise Defra's position as we understand what it has said to us in its letters and meetings with us and what it now says, the department has its own view of what constitutes maladministration. One thing it says is that unless it is unlawful it cannot be maladministration. That is not the Ombudsman's view of maladministration, nor do I believe it is the Committee's. Defra has its own view of injustice based on its view of maladministration. As to remedy it says it does not believe in providing compensation for financial loss in these cases because it might encourage others similarly affected to make claims. Is that an argument we buy? Defra does not believe in providing compensation for what it calls financial disappointment which I call loss of opportunity. Then it says it cannot devote resources to putting right past mistakes because it is too busy concentrating on the future. I do not buy any of those arguments. Whether or not the floodgates would be opened, is it legitimate to say one will constrain one's definition of maladministration and injustice because it might otherwise open the floodgates?
Q13 Chairman: Let us leave the floodgates to one side. You have taken us to the substantive issue. The Defra response in which you have engaged is to acknowledge that huge things went wrong in the administration of the scheme but the department did not break the law. It did things within the prescribed legal time limits. It failed to meet its targets for the delivery of the scheme, but its underlying point is that if it starts to move to a position where there is a claim for compensation and redress every time a target is missed that cannot be a direction in which it goes because targets serve many purposes and they are not guarantees to consumers or citizens that something will happen. Is it not confusing one kind of universe with another?
Ms Abraham: It would be if that was what I said, but I did not say there was maladministration in missing those targets. How many times have I sat before this Committee and said this is the classic lawyer's device of asserting that your opponent has said something he has not said and knocking it down on that basis? Here we are again. There are general findings of maladministration across the piece. RPA did not meet the legal obligation to determine entitlements. Nobody is arguing that. Defra and RPA failed to heed the warning information from their own systems and the Office of Government Commerce about the payment timetable and failed to alert farmers. Defra and RPA's public statements in early 2006 failed to recognise the internal concerns they had. In January they considered the position and knew the best case scenario was 70 % of payments by the end of March but decided to tell Parliament that they would make the bulk of payments by the end of March. We are not saying that they did not meet their targets and therefore it is maladministration. As to how this played out specifically in relation to Mr W and Mr Y, there is a specific finding of maladministration that RPA misdirected Mr W about the likely timing of his payment, not in terms of general announcements but in conversation with him. The suggestion that somehow I find that failure to meet a published target equals maladministration is not what the report says.
Q14 Kelvin
Ms Abraham: Precisely.
Kelvin
Q15 Chairman: Defra has said it is happy to give a consolatory payment of £500. As I understand it, the farmers are dissatisfied because they wanted many tens of thousands of pounds for the problems they say this caused them. You have said that they might have only £2,000 or £3,000. How did you work that out? We may be dealing with big issues here but we are not concerned with huge sums; we are talking of £500 and £2,500. Perhaps it is for Defra to say why we get into a bit of state over this, but why were your recommendations so modest?
Ms Abraham: Defra's response as I understand it is that there is only one type of compensation it is prepared to consider which is what it calls a consolatory payment for inconvenience and distress; that is, the botheration payments that we all recognised. The Committee is aware of the Ombudsman's principles for remedy. The Treasury has endorsed them; they have appeared in Managing Public Money and the Government understands and supports them. Those principles talk about different components of compensation: inconvenience and distress certainly, loss of opportunity and financial loss. As I understand it, Defra turned its back on anything other than the first component. The way we arrived at the figure we did was not a precise science; it was built up and then produced a figure in the round.
Ms Harrison: We started from the Ombudsman's principles for remedy, thinking particularly about the importance of providing a fair, reasonable and proportionate remedy for the circumstances of the individual. We looked very closely at the evidence with which the farmers provided us with three things in mind. We were looking for a connection between what we had identified as going wrong and the injustices they claimed, so we needed to satisfy ourselves that there was some linkage between those things and it was not purely coincidental. We thought about what other factors beyond the agency's maladministration might have played into the injustices that had taken place, because many of these decisions were quite complicated particularly around the loss of opportunity. We also thought very carefully about how the inability of farmers to get good and accurate information about what they might expect might have coloured decisions which with hindsight or in normal circumstances might be very straightforward. That led us to a sense of what we could reasonably link to the maladministration. We could not be precise so arguably it could have been a little more or less, but we arrived at what we thought were reasonable figures which took into account distress, botheration and the inconvenience that farmers had suffered, loss of opportunity to make proper plans - the foregoing of opportunities to do specific things they could point to that they might have done - and also the cost they incurred in terms of contact, photocopying and that sort of thing. We brought those together and made an assessment for each of them. For the record, we recommended for Mr Y £3,500 and for Mr W £5,500, significantly short of what they asked for.
Q16 Chairman: But they identify considerable losses caused by the failure to access certain schemes that would have got them a lot more money, failure to do deals with suppliers and so on. That takes them into sums far beyond those you have said. Either you accept what they say, in which case presumably you accept the financial implications of it, or you do not. If you do not accept what they say you cannot really pray them in aid in making your general case, can you?
Ms Abraham: I am not so sure about that. My colleague started with the link between maladministration and injustice and being able to be satisfied that decisions which were taken to do something or not do something flowed from the maladministration as we saw it. There may have been a whole raft of events in the course of that timescale but we pressed the farmers very hard to explain why it was this flowed from the maladministration we found. Making these kinds of judgments is not new to us. We did come down to what are described in the report as modest remedies. Again, it is a question for Defra. I do not believe it was the amounts about which they were so seized; it was the sort of compensation. They were saying there was only one kind of financial compensation they were prepared to countenance and they ruled out the other components. I am saying the Ombudsman's principles for remedy show that you need to look beyond that.
Q17 David Heyes: I wonder what all this means for the Ombudsman. You are a creature of Parliament; you hold your office by virtue of that. What damage does this do to your office? What damage does it do to Parliament, particularly in those cases where I often recommend people should take their complaints to the Ombudsman?
Ms Abraham: I come back to six cases in 40 and more years and only four in my seven and a bit years where we have this sort of conversation.
Q18 David Heyes: The frequency seems to be increasing.
Ms Abraham: Possibly; I do not know. If we do see each other again I will start
to worry. There are no more such reports in the immediate pipeline of which I
am aware. You will have seen the joint report with the Local Government
Ombudsman laid before Parliament last week where we got a very good result:
£95,000 was paid in compensation to a family that had been having a terrible
time in the
Q19 David Heyes: Your feeling about the department is quite alarming. Are you tackling that? Do you have plans to deal with it and confront it or is it just something you are thinking about?
Ms Abraham: We have a number of investigations under way at the moment which are not about the 2005 scheme or the specific issues around the information put into the public domain at that time; they are issues around entitlements, payments and decision-making and about complaint handling. I think the investigations under way are now in double figures. We are in the middle of those investigations but are coming up against the same sort of legalistic responses that suggest to me this is not a one-off. Until RPA and Defra can somehow shift their focus in relation to complaint handling we will see more and more of these cases.
Q20 Chairman: Essentially, what you have said to us is that you do not think Defra gets it in terms of what your job is?
Ms Abraham: Defra does not get it in terms of what customer service and complaint handling are about. You may think it is a cheap shot, but when the chief executive of an agency writes a letter of apology to one of these complainants he does not think it important to sign it himself.
Chairman: That is all very helpful and we shall now turn our attention to Defra. Although we tend to see you on occasions such as these when complaints are unremedied it is worth saying over and over again that day in day out you produce results that are not contested and are accepted. We should acknowledge that that is the mainstay of your work for which we are very grateful.
Witnesses: Dame Helen Ghosh DCB, Permanent Secretary, Department for Environment, Food and Rural Affairs, and Mr Tony Cooper, Chief Executive, Rural Payments Agency, gave evidence.
Q21 Chairman: We welcome Dame Helen Ghosh, Permanent Secretary of the Department for Environment, Food and Rural Affairs, and Mr Tony Cooper, Chief Executive of the Rural Payments Agency. Thank you very much for coming. You know why we have invited you and are you probably aware of the kinds of things we are to ask about. Do you want to say anything by way of introduction?
Dame Helen Ghosh: Yes. Looking at our memorandum and correspondence with the Ombudsman over the past couple of years on these cases, the department absolutely accepts her finding that there was maladministration in terms of getting right the service provided by the RPA. Having lived through many of these hearings since arriving in my department late in 2005 we have explained and apologised to farmers in particular for the poor service they have received and the reasons for that. No one could read the stories of Mr W and Mr Y without in one sense feeling enormous sympathy for them and deeply regretting that the service they received was so poor. There are however two areas where we disagree with the Ombudsman's findings. The first is the issue about whether or not the department and agency were open and accountable. There is slight ambiguity in various parts of the report. Based in part on personal observation in the early months of 2006 the agency and ministers genuinely believed up to the weekend around 14 to 16 March that it would be possible to make the bulk of payments to farmers by the end of that month. As the Ombudsman says somewhere in the report, no one was being dishonest or untruthful. To go back to the many hearings on this subject I have lived through, these reflect an essential lack of capacity in the agency, as it then was, to understand the scale of the task ahead of it. I am sure we shall return to that point later in the hearing. The point about financial redress is quite narrow though I know it is one that concerns the Ombudsman very much. For us the key issue is whether the aspirational target announced by ministers during 2005 and into 2006 about when the bulk of the payments would be made counts as an expectation and promise. We believe that it was not that but that it was an aspirational target. To make calculations of financial redress on the basis of that date rather than the statutory date at the end of June is wrong, would set a dangerous precedent and would not be consonant with our obligations. We treated the target very seriously in the sense that only six weeks later we paid out, at the risk of both disallowance and the successful completion of operations, partial manual payments including payments to Mr W and Mr Y, and only six weeks after the end of March we paid out effectively 80 % of the amount. When one looks at the calculations included in the report and the recommendations the Ombudsman makes for redress, although she says there was no legitimate legal expectation there was nonetheless a reasonable one. All of the calculations are around the question of delay. We say this is not a valid basis for making payments. We do and have made both consolatory payments, which we are proposing to make in these two cases, and ex gratia payments. We have not turned our back on making ex gratia payments where we can see that there has been a specific error or statutory failure on the part of the agency and a directly related financial loss. We are strongly committed to making consolatory payments where there is such a direct link or there is stress and worry as vividly described in these two cases, but for us the key issue is whether those aspirational targets to pay the bulk of payments by the end of March are ones against which one can calculate financial redress.
Q22 Chairman: What is the difference between an aspirational and non-aspirational target?
Dame Helen Ghosh: I use the adjective in the sense that, as you will be aware in the case of executive agencies and NDPBs, we set management targets for all our organisations. Sometimes they will be deliberately stretching, in which case there is an understanding of that when they are set; in other cases they will be ones that the agency and NDPB are likely to hit. When I use the term "aspirational" I mean that is our aim. To go back to the point about honesty and accountability, that was the belief of the RPA, Lord Bach and the Secretary of State at the time. They all believed, having said that was what they hoped to do and that was the management target they had been set, up to the 11th hour that it would prove possible.
Q23 Chairman: I do not believe that is an issue. Tony Blair believed there were WMDs, but I do not believe that is the point. The question is whether or not there were any. I do not believe the Ombudsman is challenging people's honesty or belief. If as you now tell us there are different kinds of targets which have different status and mean different things perhaps people should be told.
Dame Helen Ghosh: As you said that I thought that in a sense it did not matter. Any target that we give an agency or NDPB is effectively an operational target, not a legal or statutory one. In this case our argument does not really rest on whether or not it was an aspirational, stretching or management target but on the fact that in order to give the best customer service we could, which is perhaps a rather ironic way to put it, we wanted to urge the agency to aim to make the payments by the end of March. It was not a legal requirement. The distinction which I suppose is an issue of principle for the Committee and therefore one on which we stand is: should a management target, whether aspirational or not, trigger effectively a legal obligation to pay compensation, or should the legal target - you will know that the payment window closed at the end of June - trigger that? In a sense whether it was aspirational or not is a bit of a red herring.
Q24 Chairman: You can turn it on its head and look at it from the point of view of the people who are using the services of this agency. If they hear it being said that we expect the agency to deliver x per cent of payments by y date and people act upon it because that is what they have been told that is perfectly reasonable, is it not? If it turns out that that does not come to pass, not because people have been dishonest but because it just has not happened, they are entitled to say they have made all kinds of decisions on the basis of what they have been told which has turned out not to be the case.
Dame Helen Ghosh: I entirely agree that is highly regrettable. Therefore, one of the lessons one learns from this experience is that one needs to be extremely careful about how one expresses the kind of management target one sets an agency.
Q25 Chairman: Mr Cooper, one of the Ombudsman's recommendations was that you should send what she called a personal written letter to these people who had suffered at the hands of the agency. This does not have to be anonymous; a letter was sent to Mr Borthwick. You wrote to him saying you were sorry for what had happened, but the letter was not signed by you; it said "pp". Just to compound the whole episode, is it not appalling that you did not write him a personal letter and sign it?
Mr Cooper: If I may explain the situation that arose, I wanted to send the letter quickly and to sign the letter myself. Unfortunately, that letter was issued on either the 20 or 21 December and I was unable to travel to the office because of the wintry conditions. I considered very carefully whether I wanted to delay it and sign the letter personally or whether it should go and I concluded that I wanted it to go. That was why it was signed "pp" by my secretary.
Q26 Chairman: That is a plausible explanation, but you could have put a note at the bottom saying that you very much wanted to sign it personally and send it as quickly as possible but you were stuck in the snow and could not get to the office. That would have been all right, would it not?
Mr Cooper: I completely accept that.
Q27 Mr Walker: I am sorry to bang on about the March date, but why was the target date of March set? What were the department's internal imperatives that led you to set a target for the end of March as opposed to trying to meet just your legal obligations in June?
Dame Helen Ghosh: I was not in the department for the whole of 2005, but my understanding and research suggest that it was in order - again, it might sound slightly ironic in these circumstances - to provide a good service to customers. As the Ombudsman's report makes clear, there was a great deal of concern among the farming community that there would be a long gap between the last of the old-style payments and these ones. We made very clear at the beginning of 2005 that we would not begin payments until February which in terms of cash flow was late for many of the people involved, and on advice from the RPA ministers thought it reasonable having started only in February to say that payments should be made as rapidly as possible. That was the basis of it.
Q28 Mr Walker: Was a capability audit undertaken before dates were changed to help the department ascertain when it would be in a position to set these aspirational targets, or was it done just on the back of an envelope and you said you would try to do it?
Dame Helen Ghosh: The material in the report is very helpful on this. There was a whole series of reports by the Office of Government Commerce into the status of the project at the various gateway stages which made recommendations about the project. It was not without external scrutiny. One of the lessons government has learnt from the RPA experience and I certainly picked up with the Office of Government Commerce subsequently is that the power of the red flag on a gateway report has been significantly strengthened. In those days one could have a red flag which meant one had to deal with things before proceeding. Therefore, one could leap over the barrier and provide money and resources or resolve some policy issue and carry on, which was effectively what happened. Risks were highlighted and the agency believed that it had dealt with them. Now a red flag means one must stop and think; it is extremely serious. One of the lessons we have learned from the experience and fed into the government process is that when it is red it really is red.
Q29 Mr Walker: Why do you believe farmers remain so upset with the department and have a great sense of grievance about the way they have been treated?
Dame Helen Ghosh: I think farmers have long memories and the service they got in 2005/06 was extremely poor. There were policy/political issues about the changes the Government decided to make in terms of the nature of the payments. As opposed to the noise in the media and in representative groups, if one looks at customer satisfaction indices and the rate at which we have speeded up payments to farmers, since those dark days of 2005/06 80 % of farmers received their payments at the very beginning of December of this year and that is reflected in the payments to Mr W and Mr Borthwick. Every year we have increased the speed at which we pay. As has come out from the correspondence with the Ombudsman, we have put an enormous amount of resource into doing that. I believe that is why the farming community continues to feel uncertain and remember those difficult days.
Q30 Mr Walker: We issued a report into the use of official language and jargon. You talk of lessons learned. One of the lessons learned is that farmers do not speak civil service language. When is an aspiration an aspiration and when is it a promise? Are you running workshops with farmers so they can understand the language emanating from your department and do not have unrealistic expectations?
Dame Helen Ghosh: I shall ask my colleague to say a bit about those sorts of contacts and how we have made things simpler. The theme that runs through this - it comes back to the question whether or not the department is serious about customer service - is that this scheme, like so many others related to farmers, is very tightly controlled by European regulations. All the time we are walking along a very narrow path between the EU and potential disallowance on the one hand and service to farmers on the other, of which our partial payments in 2006 were an example. The classic instance for me is that whenever one meets a livestock farmer understandably he is upset when he is described as "negligent" if one of his cattle does not have its ear tag. That is a euro word. What we are trying to do is put the customer service and eurocratese in two boxes. Perhaps my colleague wants to say something about the progress we have made. There is more to do.
Mr Cooper: It is very much work in progress. It is in part a cultural thing. The starting point for the agency was to invite some farmers to talk to us and tell us what it was like being on the receiving end. We also went out and video-ed some farmers with that sort of explanation and applied that to the training we gave to staff. We have been looking steadily at some of the literature we send out. We send out a lot of literature. The guide is complex and difficult but we are trying to improve the language. The farming community has responded very positively to the RPA in some areas and offered to take some of our staff who had never been onto a farm to see exactly what it was like and why it mattered and why the payments made to farmers also mattered. There is a good relationship in some areas, not in all, and it is definitely having an influence. From my perspective of the customer focus there is still a long way to go and it is proving quite difficult to organise around the customer rather than our processes, but that is where we are trying to get to.
Q31 Mr Walker: So, on joining all your staff should be given a pair of green wellies and sent out?
Mr Cooper: Yes.
Dame Helen Ghosh: Whenever I visit the RPA I am amazed how many people who work there are farmers. I believe that a third of the RPA inspectorate is made up of farmers.
Q32 David Heyes: Following on from what Mr Cooper said, you describe the steps you have taken to try to improve things like customer relations. There is a huge contrast between that and what the Ombudsman told us in her evidence a short while ago. Correct me if I am wrong - she is sitting here - but the impression I gained was that she believed the problems in the RPA were symptomatic of systemic failures in Defra. There are deep-rooted problems: there is a failure to recognise the significance of customer service and properly understand what it is about and a failure to have a proper complaint-handling system and to learn from that. She gave us an undertaking to engage with the department to deal with it. These are very serious accusations about a major department of state and I have not picked up from anything either of you has said so far that you have any recognition of it.
Dame Helen Ghosh: Absolutely we have recognition of that. As I said in my opening remarks, we both accept that in terms of the service we provided to farmers we significantly fell below any reasonable explanation in 2005/06, and we have put an enormous amount of investment to focus on the customer through the RPA systems and across the rest of the department's activity. For example, an enormously significant part of our investment and the whole change in the process once Mr Cooper, and before him Mark Addison, took over was to change the IT system so that when a customer rang we could have a single customer view and deal with the particular complaint. I shall ask my colleague to say something about the complaints system in the RPA, but the Ombudsman's guidance is extremely clear and useful and is the principle on which we base our complaints-handling processes. I do not like to use the word "dispute". Our difference of view with the Ombudsman is not about customer service or how we handle complaints; it is about the essential issue of whether the targets produced a sufficient expectation to require the payments she proposes.
Q33 Chairman: It would help if I asked the Ombudsman whether that is an accurate description of the point at issue between you.
Ms Abraham: No. I do not know whether Dame Helen heard my previous evidence. One of the points I made was that we had not made a finding of maladministration in relation to the failure to meet the target of the end of March. Listening to the proceedings this morning I really wonder whether Defra is resisting my recommendations on the basis of a false understanding of the findings we have made.
Dame Helen Ghosh: No. This report has gone through a long history from a point where in early drafts the Ombudsman rested on an argument about a legitimate expectation. Indeed, she has not specifically found maladministration on the basis of a legitimate expectation to pay by the end of March. I absolutely understand that is not the case. I do not like to quibble about technical issues, but in terms of government and precedent I must do so. If one looks in paragraph 59 at what farmers and growers could reasonably expect and in particular the calculations of what redress and ex gratia payments she proposes they are implicitly about delay. That is the difference between us. We absolutely do not argue that the Ombudsman has specifically found maladministration around that. She has found general maladministration of which there is plenty in terms of the processing of applications and the information received by these two applicants. It is a very narrow point and I do not think that should mean Defra is not interested in customer service.
Q34 Chairman: I think we are getting in a bog here.
Dame Helen Ghosh: I suspect we are.
Q35 Chairman: It is generally accepted that it is the job of the Ombudsman to find out if there has been maladministration leading to injustice; that is her trade. She is the expert on whether there has been maladministration, whether it leads to injustice and then what the appropriate redress should be. She does it day in, day out.
Dame Helen Ghosh: Absolutely.
Q36 Chairman: In this case she has found maladministration and you do not dissent from that. She has established that it led to injustice and has applied her normal principle of redress which is generally accepted by government bodies and departments. You have not accepted it and we are trying to establish the grounds on which you do not accept it, because the acceptance of it is implicit in what the deal is in relation to the Ombudsman's office. You say in your reply that you have not breached a legal requirement. That is not what the Ombudsman is about. The question is not whether you have breached a legal requirement but whether you presided over maladministration leading to injustice which produced the demand for redress. You are talking in different territories, are you not?
Dame Helen Ghosh: I hasten to reassure the Committee that we have not gone into this
unthinkingly. What we have done is to look at comparable cases in both Defra
and across government where ex gratia payments, financial redress as well as
consolatory payments have been made. Our advice is that financial compensation
is paid by Defra in cases where there is a clear failure of a statutory
function or error by the authority which has led to a clearly definable
financial loss. The recent case in which the Environment Agency was involved in
waste in the
Mr Cooper: In the case of which I am aware the farmer had submitted an application and we had no record of receiving it but when we sought evidence of it being sent to us we accepted that it probably had been submitted and somehow there had been an error at the RPA end. There was no valid claim and therefore under the European legislation we could not pay that as a subsidy payment, but we have accepted it and for a number of years we are making a payment equivalent to the subsidy of an ex gratia amount.
Q37 Chairman: You know why you make certain payments for certain things but I am not sure you understand what the Ombudsman is about and why the system was set up by Parliament all those years ago. The Ombudsman has set out her principles and how she proceeds and nobody can fail to understand it. She believes that Defra just does not get it in terms of what she is about. She does not understand why what for her is a straight-down-the-line finding is not simply bought into when the assumption is that it will be.
Dame Helen Ghosh: Chairman. I would be happy to write to the Committee with more detailed technical analysis, but it comes back to the question: against what date in 2006 do you say there has been delay? Do you say the delay was effectively around the target or would the delay have been around the statutory date?
Q38 Chairman: I do not think we want to return to those technical matters. I know this has been endlessly raked over by the NAO and other committees. We will not go there. The difference in this case is that it has been meticulously examined in terms of the individual experience of particular farmers. If you read the report and see how it was dealt with you get an incontrovertible finding of maladministration. The Ombudsman then asks: has this led to injustice? She finds that it does, documents exactly how it has happened and then applies her redress principle. It is not a technical matter. I cannot understand why you want to dissent from the logic of that process.
Dame Helen Ghosh: We absolutely do not dissent from it, which is why we are offering what is by standards across other government departments a high consolatory payment for the worry and stress caused. Again, we have looked at parallels across other government departments. We accept we should pay for the worry, stress and anxiety. We absolutely accept this is not a finding of maladministration but it is implicit in the calculation. I am sure the Committee does not want to go into it word by word, but the idea is that farmers made choices because they did not have access to funds when they were expecting them or when they needed them. These are phrases about whether if we had paid at the end of March the situation would have been different from our interim payments six weeks later. That is the only issue between us. It is not about customer service; it is about what triggers a calculation of actual financial loss. Mr Cooper has described a situation where it is extremely clear cut. I think that looking across other government departments it is a very clear-cut issue.
Q39 Chairman: I am tempted to read the summary sections of the Ombudsman's report where she describes what she believes the maladministration is. It is not what you are describing. She describes all the ways in which this agency completely messed up which had these consequences for the individuals concerned, so the maladministration is established per adventure.
Dame Helen Ghosh: Absolutely, and I am not arguing about that at all.
Q40 Chairman: The Ombudsman quite rightly feels, as do I having read the report, that your description of what is at issue between you is not correct.
Dame Helen Ghosh: The only thing at issue between us is the question of paying financial redress as well as a consolatory payment on the basis of calculations of what would otherwise have happened.
Q41 Chairman: We asked her about that in the previous session. The Ombudsman does not accept the calculations of loss that the farmers have claimed.
Dame Helen Ghosh: It is a very complicated issue.
Q42 Chairman: They wanted tens of thousands of pounds and the Ombudsman came up
with £3,500 and £5,500. These are very modest sums relating to only two people
with another
Dame Helen Ghosh: I absolutely accept the point made by the Ombudsman that ultimately the fiscal and administrative factors should not be the subject of our consideration here. The question is whether if any government authority said it had a non-statutory target to do something by a non‑statutory date in any case where it failed to hit that target the financial clock would start to tick because x expected it to happen and therefore the public purse should pay out y against that non-statutory target. That is the only point. I am very happy to provide more material to the Committee or discuss it further with the Ombudsman. One issue is that although the Ombudsman over the period of her draft reports and then final report moved away from the concept that there was a legitimate legal expectation and maladministration and therefore loss could be calculated on that basis, in terms of practical calculation it is implicit in the estimate of financial compensation. That was why I said at the beginning it was a very narrow point.
Q43 Chairman: Did you take advice in government on this?
Dame Helen Ghosh: We took both legal advice and consulted. One of the reasons I was unable to get back to the Ombudsman as quickly as I had hoped late in 2009 was that we had to consider the views of other government departments on whether or not this was indeed a valid concern.
Q44 Chairman: Did you go to the Treasury and the Cabinet Office?
Dame Helen Ghosh: We did the normal clearance of issues around the appropriate Cabinet committee which would include both of those departments.
Q45 Chairman: You say that the general position you advance here reflects an agreed position in government?
Dame Helen Ghosh: Indeed.
Q46 Chairman: It is not consistent with Treasury guidance. For example, the manual with which you will be familiar says: "Where public sector organisations fail to meet their standards, or where they fall short of reasonable behaviour in relation to those they do business with, it may be appropriate to consider offering remedies"; and it goes on to say "in more serious cases financial payments beyond what the law or contract strictly requires.'
Dame Helen Ghosh: Indeed.
Q47 Chairman: I do not think you can appeal to legal entitlements, which is what you do in response to the Ombudsman, when the whole point of the system is that it is not legally based; it is what you do when very serious kinds of maladministration are found. The Ombudsman demonstrates that serious kinds of maladministration were found here and they had consequences which have to be remedied.
Dame Helen Ghosh: Indeed, and the system of consolatory payments used by departments and the system of ex gratia payments we would use are precisely in line with that. I am not familiar with the details of the case but one case we looked at involved the Department of Health. There a gentleman tragically died as a result of delays or errors in the ambulance service. In that instance the remedy was a £1,000 consolatory payment. What we thought in terms of the seriousness of the impact and the remedy was that in this case given our concern about the principle about whether it was a legal, statutory deadline or a target a high level of consolatory payment by cross-government standards was the appropriate thing to do, and the Treasury agreed that we could make that payment.
Q48 Chairman: Five hundred pounds is a high level of consolatory payment?
Dame Helen Ghosh: If you look across government it is a high level of consolatory payment as opposed to financial redress. There are two issues here: financial redress on the basis of calculation of actual loss against tests and consolatory payments that are for worry and distress, and the offer of £500 is for worry and distress.
Q49 Chairman: Did no sensible person say, "Do we really want to get into an argument about the difference between £500 and £3,000 on an issue that will be presented as a great conflict of principle when it is completely unnecessary"? Was there not a voice of sanity that could have prevailed?
Dame Helen Ghosh: We debated significantly and discussed with the secretary of state
at length what the response to this should be. I do not want to go into the
issue of whether we took into account broader fiscal and administrative
considerations because we wanted to look at the facts of these two cases, but
clearly in government you have to think of the wider ramifications. If you can
make a calculation of financial loss suffered by people who did not get a
partial payment in May
Q50 David Heyes: Our role as a committee is to focus on the legitimacy and credibility of the role of the Ombudsman and through that the legitimacy and credibility of Parliament because the Ombudsman is Parliament's officer. I have heard nothing in the past 20 minutes of discussion to convince me that you are hearing what the Ombudsman is saying to you. I thought, perhaps wrongly, that at one moment you interrupted the Ombudsman in full flow when she was trying to tell you why you really did not understand what she was saying. There is a need for a serious dialogue here with a parliamentary officer who says she believes there are systemic, deep-rooted problems in Defra, of which this is symptomatic, and a failure on the part of the department to understand the seriousness of the problems of its organisation. I am not persuaded by anything I have heard so far that you really are listening to that very important message from the Ombudsman and, through her, from Parliament.
Dame Helen Ghosh: I apologise if it appeared that I interrupted the Ombudsman. She and I clearly have had a number of written or in person discussions about this report as it has gone through its various stages. I would be more than happy to continue that dialogue. The charge has been made that the department does not take customer service or the role of the Ombudsman seriously. We are focusing on this particular example. I cited an example where recently through one of our NDPBs, the Environment Agency - part of the Defra network - we made a very large financial compensation payment on the back of a recommendation by the Ombudsman. I do think there is a fundamental, systemic issue; this is an issue about a particular report and particular set of circumstances, but I would be very happy to have further discussions with the Ombudsman and her team if the Committee thinks that would be helpful.
Q51 Chairman: What would the discussion be about?
Dame Helen Ghosh: If the Ombudsman is concerned that there are broad issues beyond the clear difference of opinion on this report then we need to talk about them. I would like to talk about the other instances. What are the other instances? Does it relate just to this or to other policy areas of Defra? How can we come closer together?
Q52 Mr Prentice: You have faced a lot of criticism. Do you feel hurt by it?
Dame Helen Ghosh: Personally?
Q53 Mr Prentice: Some of it is getting pretty close to personal criticism. I am talking about parliamentary committees, the Defra Select Committee and comments by colleagues on the Committee of Public Accounts. We have had reports from the National Audit Office. I am not an expert on these things but reading those references I get the impression that the department under your leadership is in many ways dysfunctional; you just do not have a grip on things.
Dame Helen Ghosh: To take the second point first, the department is absolutely not dysfunctional. If you look at the capability review under the new system in early 2007 and the further review early this year the department under my leadership - I do not normally talk about myself - was found to have made very significant progress across a whole area of organisational development. It now ranks well in the top half of effectiveness of government departments. We have dealt with some fundamental issues around financial management and other systemic issues. I and my leadership team are praised extremely strongly for what we have done.
Q54 Mr Prentice: It is not my intention to be personal; that is not me, but in December 2009 the Committee of Public Accounts said that the department and agency accounting officer - you are the accounting officer - failed to get to grips with issues resulting in a lack of any clear progress in addressing its concerns. The Committee went on to say that that was wholly unacceptable. Why would the Committee say that if the department was running like a well-oiled machine?
Dame Helen Ghosh: Although in this context it is potentially a slightly controversial
thing to say, the RPA is a small part of what Defra does. There are very many
other areas of activity in Defra on which I as permanent secretary must focus
attention, but even in relation to the RPA there is a significant group of
customers:
Q55 Mr Prentice: You have been there for four and a half years.
Dame Helen Ghosh: Most of the events to which this relates were before my time. I replaced the chief executive with Mr Addison and then Mr Cooper. As a board we have invested a great deal of money in a turnaround programme. We have changed the processes and significantly improved the speed with which we pay farmers and the levels of customer satisfaction. As I told Mr Leigh and members of the PAC, we concentrated on customer service. The issues that concerned the PAC in particular were whether while we were doing that we effectively put too much money into it and focused enough on sorting out some of the issues around overpayments in earlier years and recovering them for the taxpayer. Their message was almost that we had done too much and had been unthinking in the amount invested to solve the problems of the RPA. I shall be writing to Mr Leigh tomorrow to say that as part of our current review by the spring of this year we shall be absolutely sorting out those problems.
Q56 Mr Prentice: There is a parallel universe here. I hear what you say but I also have in front of me extracts from the most recent report of the National Audit Office of October 2009. The NAO says of the scheme that scheme payments show little sign of increased accuracy with estimated overpayments of £24 million and underpayments of £30 million in scheme year 2008 when you were there. The PAC talks about your department agreeing to provide it with a clear action plan by the end of this month.
Dame Helen Ghosh: Which I shall be doing tomorrow.
Q57 Mr Prentice: You have left it until the very last moment, have you not?
Dame Helen Ghosh: If I may go back to the NAO report, the concerns are about a very particular issue that derives in part from having made emergency interim payments in 2006 to help farmers, namely the extent to which we had overpaid farmers that year and we needed to get it back. It is extremely complicated because of the change in data year by year and the complexity of the system. The calculation of debt which is much less than £100 million is a proportion of the £1.5 billion that we pay out. That is the level of inaccuracy. By comparison with other parts of the government system that is quite a low level of inaccuracy in cash terms. What we have been doing over the period, and particularly since then, is to get Deloittes working with Mr Cooper's team to work through those overpayments and establish and recover as far as we can the outstanding amounts. It is an incredibly complicated thing to do because the system is incredibly complicated. We have now done that and that is why it has taken us a reasonable amount of time and why I shall be writing to Mr Leigh tomorrow. We shall make sure we recover the payments or write off the debt appropriately, but we are not sitting on our hands; it is just a function of the fact that the system we have to operate is extremely complicated. One thing that work has shown which emerges in the view that European auditors have taken of us is that processing has become significantly more accurate year after year. We are not as inaccurate as we were in the fateful year 2005/06; we have become progressively accurate in a very complex scheme.
Q58 Mr
Liddell-Grainger: I represent a lot of
farmers in
Dame Helen Ghosh: I absolutely understand the frustration of farmers when they do not
get good customer service. We have focused on speeding up payments to farmers
and the kind of increasing and very high levels of contact with them. Assuming
it is a representative customer sample, the fact is that 76 % of farmers
compared with 39 % in 2006 are now happy with the service. Although you say you
do not recognise the picture there is another picture here. I do not know
whether my colleague wants to comment on the
Mr Cooper: There is usually an explanation as to why somebody will receive different information and we struggle sometimes to explain that clearly to the farmer. It could have something to do with the language we use if we are still using civil service-speak rather than language that the farmer understands. Maybe the mapping exercise is a good example. We learned the lessons of what happened in 2005 and took a different approach. We do not send maps to farmers, wait for them to mark them up and send them back and then read it, understand it and send it back and find it is wrong. We telephone the farmer and offer a face-to-face meeting to go through it. We have done it with lots of farmers and agents. It is not perfect. The Ombudsman's report is very helpful in illuminating the sorts of difficulties that arose with people being passed from pillar to post and one office not knowing what the other was doing. That was a problem we had to resolve and that is why it will take 18 months or so to improve the IT system to gather information that is helpful to case workers so they can have a view of what is happening in a particular case. Those sorts of changes do not happen quickly. It took probably until about April 2008 to get it into a good state, and we have continued to build on that since. I fully accept there are further improvements to be made, but I suggest that all of my staff are committed to trying to do a good job. Approximately half of my staff are working on the Single Payment Scheme and all are very committed to trying to provide the best possible service they can.
Mr Liddell-Grainger: That is the flannel. I represent about 600 individual farmers. I have a quarterly farming meeting with farmers and they come and go as they want. I have yet to have a meeting since you started when your organisation is not top of the agenda. Maps are wrong; field numbers are wrong; they cannot get hold of anybody. I have yet to meet a farmer who has had a meeting with an RPA representative. I will check with my farmers, but I do not think I have ever come across a case where somebody has come to visit. That is so in the case of TB testing but that is different. I do not recognise anything you have just said. I have total sympathy for the Ombudsman. I do not think you get it; I do not think you are fit for purpose. Your computer system cost £130 million. It was said by the NAO politely to be very expensive and that "heavy customisation of the IT systems has resulted in very complex software which is expensive to modify and maintain, and has increased the risk of obsolescence . . .The involvement of Agency staff in the original implementation of the system blurred responsibilities with its contractors . . ." This is endemic failure. Very famously John Reid once said that the department was not fit for purpose. I have total sympathy for what we are talking about here. To be quite frank with you, I just do not think you are up to it.
Chairman: I do not want to go too wide.
Mr Liddell-Grainger: Chairman, the Ombudsman cannot get the message through. I am trying to get the message through from the consumer.
Q59 Chairman: You are right to say what you have said and I want to hear the answer, but I say to the Committee that generally we do not want to go too wide.
Dame Helen Ghosh: Mr Liddell-Grainger will have heard this. Over the past four years that I have been in the department we have worked incredibly hard to improve the service to farmers provided by the RPA, but as I have described in a number of Select Committees the starting point was a pretty low one. The SPS dynamic hybrid system was highly complex and made it extremely difficult to deliver and the agency that did not understand the delivery problems it faced. An IT system was then built which was not, to use your phrase, fit for purpose because it was designed to complete one set of tasks and then there was another lot of tasks. You could not identify a customer case. That led to all the problems described very well in the report. That is what we have been working to put right but because we started from that point we have had to spend a lot of money on the computer system. That is why it has taken an awfully long time to get the trust of farmers. We are absolutely sensitive to the continuing concerns of farmers, but the fact is that 80 % of them were paid on the first two days of the payment window in December of this year. As to maps, I do not want to go into too much detail but we have put off and put off a European requirement in order not to disrupt service to farmers. We piloted it and had initial problems, but I believe that now things are going pretty well.
Mr Cooper: Of the 23,000 confirming maps we have sent out we had had 250 come back with changes and not all of those changes are because of something the RPA has done but because, obviously, farmers' land changes and they need to report those differences to us. They know that and do it each year.
Q60 Mr
Liddell-Grainger: It now costs £1,743 to
administer a claim and it has gone up by 22 %. The cost per claim in
Dame Helen Ghosh: As I have discussed with the PAC on more than one occasion, the
fundamental reason why it costs us more to administer it is that we picked a
very complicated system. In
Q61 Kelvin
Dame Helen Ghosh: It is absolutely not the case that we have been instructed either by Number 10 or the Cabinet Office. I was simply answering the Chairman's point. Because it was a significant point of principle for a number of government departments we did what we obviously would have to do in these cases and took advice.
Q62 Kelvin
Dame Helen Ghosh: Again, I was not around at the time but my understanding having talked to officials in the department who were there at the time is that it was not something the Treasury forced upon us. It was a principled point. We needed to move away from the old world where subsidy was based on how much you produced and the days of the milk lake, wheat mountain and so on. We certainly did not want subsidies based on production. If we had carried on paying everybody on an historic basis essentially that would have been a production link. More importantly, we wanted to move people into a space where we paid subsidy to a broader group of people in relation to the land, that is, a so-called decoupled system. It was a fundamental principle of Defra and government policy. I do not think cheapness came into it; it was a matter of how to share out a particular cake.
Q63 Kelvin
Dame Helen Ghosh: As I have discussed with a number of previous committees, that is absolutely true, and setting a very tight timetable to bring it in and move through the dynamic process towards predominantly a land-based calculation and away from historic was also a factor. But we come back to the fact that at the time the agency on the advice it gave to ministers did not understand the complexity and challenge of that approach.
Q64 Kelvin
Dame Helen Ghosh: We have to move with the rest of
Q65 Mr Walker: Defra's name changes so often. Who is driving this?
Dame Helen Ghosh: It has not changed for eight or nine years.
Q66 Mr Walker: Are you or your minister driving this?
Dame Helen Ghosh: Do you mean our response to this report?
Q67 Mr Walker: Yes.
Dame Helen Ghosh: It is I hope absolutely textbook stuff in terms of the interests of this Committee. My team who had the day-to-day contact and Mr Cooper's team with the Ombudsman discussed it with lawyers and other departments and put up advice through me. Obviously, there are particular accounting officer issues here. I discussed them with the Secretary of State, Hilary Benn. We agreed what approach we would wish to take. He consulted his colleagues and the response you got was absolutely agreed. Nobody is driving anybody.
Q68 Mr Walker: Do you think it would have been helpful to have the minister here today? You have had quite a lot of flak not just today but during appearances before other Select Committees. Did we not invite the minister or did he not want to come?
Dame Helen Ghosh: I do not think you invited him.
Q69 Chairman: We thought the permanent secretary was the appropriate person to ask.
Dame Helen Ghosh: Hilary Benn would not say anything different from what I am saying. As is amply explained in the report, ministers have made all sorts of appearances before Select Committees, have made lots of public statements on the problems of the RPA and they are committed to improvement.
Q70 Chairman: To go back to the nuts and bolts of it, you say that the ex gratia
payment is generous in
Dame Helen Ghosh: No; the consolatory payment is generous.
Q71 Chairman: In the case of Mr W the payment you offer is less than what it has cost him even to pursue his complaint. Not only is that in defiance of all the instructions in this area but it does not make any sense, does it? The cost identified by him in just processing the complaint as identified by the Ombudsman is greater than the amount you offer.
Dame Helen Ghosh: A consolatory payment is for worry and distress; it is not an issue of financial redress. There is one case involving the failure by the Child Benefit Office to identify someone eligible for benefit. Several years' payments were missed. It was absolutely clear cut: there was a failure to identify the individual who lost the child benefit; there was a statutory obligation. The individual was given the sum of £34,000 for lost benefits including interest and a consolatory payment of £500 for delay and stress. The consolatory payment is not supposed to cover cost; it is about worry and stress.
Q72 Chairman: The implication of that is that you are not compensating for the cost of pursuing the complaint at all?
Dame Helen Ghosh: No; it is not one of the elements of the calculation.
Q73 Chairman: All the guidance to you about making payments says that you should compensate for the costs incurred by people who pursue complaints.
Dame Helen Ghosh: In that case there was a consolatory payment of £500 for delay and stress. There was a consolatory payment of £1,000 for distress and worry in resolving a complaint in relation to the gentleman who died. In a sense this is beyond our remit. I do not know the basis on which consolatory payments as opposed to financial redress are calculated.
Q74 Chairman: The Treasury guidance says: "Whether the process of making the complaint has imposed costs on the person complaining, eg lost earnings or costs of pursuing the complaint, is among the factors public bodies should take into account when deciding financial compensation." This illustrates the charge that the department is not quite getting it in relation to making payments.
Dame Helen Ghosh: If the charges is that consolatory payments are not high enough I would want to check with other departments why they pay similar or lower sums for worry and stress. That is quite a separate issue from financial redress.
Q75 Chairman: The argument is that you should really be offering an ex gratia payment here.
Dame Helen Ghosh: That is precisely the point. The issue is not about a consolatory payment but an ex gratia payment.
Q76 Chairman: That is what we would like you to reflect on further. You have already had enough grief on this issue.
Dame Helen Ghosh: That is my job.
Q77 Chairman: But our job is not just to give people more grief, although sometimes it feels that way. If I may speak for the Committee, we do not know much about Defra but we know quite a lot about the Ombudsman. We believe that you do not quite understand what the whole Ombudsman system and principles are; if you did you would not have got yourself into this difficulty. I think you should go away and have further discussions. It is clear from the exchanges today that there is a complete misunderstanding about what you think is at issue here. That at least should be resolved not just for this case but more generally. I would urge you to do that.
Dame Helen Ghosh: I would be very happy to do it. I think this particular case in the sense that it is confusing and confused has had an unfortunate conception and birth. We started in one place and have not quite moved away from it in the final report. I do not want the Committee to go away with the belief that this is representative of our relationships with the Ombudsman and this report as well as others. We have examples of good relationships and appropriate remedies as in the case I described earlier. We are at risk of focusing on just this one thing.
Q78 Chairman: I believe the Ombudsman would like a further word.
Ms Abraham: I shall try to keep it brief. To be honest, I have found the whole experience a bit surreal, even more so in the case of the last comment. I would welcome a very different dialogue from the one we have had and are having at the moment with Defra and RPA. I make one comment on the payment of £500 for stress and worry. The Committee will be aware that my principles do not use the language of government, but we all understand the terminology we have been using today. If one looks at what is acceptable in the circumstances I find it strange that what other government departments have done is the comparator rather than what the Ombudsman has done in similar circumstances. I have recently secured a compensation payment for stress and worry of £10,000 from another government department. That in itself is odd. What I find fundamentally bewildering is that for a long time I have been trying to understand why Defra has been digging in on something that seems to me to be completely disproportionate. Here there are 24 cases involving modest sums of money. What I take away from this morning is that all of this cross-government dialogue and taking of positions on principle is that they are digging in on a point of principle that is based on a misreading of the report. That is where I am at the moment. I think they do not get it. My thinking is that there has been all this dialogue with lawyers and other departments but if somebody had talked to me we might not be here.
Q79 Chairman: Before we lose the point, in a nutshell tell us again what you believe is the basis for saying they do not get it.
Ms Abraham: Chairman, I refer to the bit of my report that you said at one point you might read out, that is, the summary of the finding of maladministration in general terms and the maladministration in relation to the two individuals and the injustice to which it led. I do not take from that any suggestion that there is something predicated on the targets being met. That is not what the report says. I am beginning to wonder whether Defra has properly read the report because I do not believe you can get from this report to the place Dame Helen has reached, but the department has got there and is hanging in there. I do not see it in the way they do. It is important we start this dialogue because we have cases under investigation and fundamental concerns about what I described earlier as systemic issues. Maybe I should reiterate for clarity what I believe they are. I said I thought there were indications of problems of service design that got in the way of good customer service.
Dame Helen Ghosh: In the RPA?
Ms Abraham: I am talking about the RPA. That is evidenced by the fact that even some of our complainants say the staff are trying so hard but the systems will not let them do it. There is some problem about system design. There is something fundamental about complaint handling. The complaint systems in relation to RPA are not as far as we can see fit for purpose; they do not do the job which a good complaints system would do. They do not deliver good decisions or redress mechanisms. In there is the point about Defra not getting it. We want to talk about good administration, decision-making and customer service; the department wants to talk about points of law and issues of principle. We are at cross-purposes on this and we might get ourselves in a better place if we try to have conversation not through lawyers.
Dame Helen Ghosh: I am very happy to engage in that. I do not know what the formal processes are following this and what your report consists of, but I am very happy to commit to having precisely that dialogue with the Ombudsman.
Q80 Chairman: That would be a positive outcome of this morning's session. We might write to you as others have suggested there is some need for that.
Mr Cooper: On behalf of the RPA I am also very happy to meet whoever you would like us to meet on both areas and the complaints system. I say to Mr Liddell-Grainger that if he would like one of my people to come to one of the meetings of farmers to which he referred I would be very happy to organise it.
Chairman: On those more cheerful and reassuring notes, thank you very much for coming along to talk to us. We have concerns about this and I hope that as a result of the conversations you have some of them will be allayed.