2 The Decision Making and Appeals
(DMA) System: 1998 reforms to present
DMA reforms since 1998
9. DWP's decision making and appeals (DMA) system
was established following the introduction of the Social Security
Act 1998. This legislation paved the way for a major overhaul
of the DMA process with the aim of improving the accuracy of decision
making and reducing error. There were four areas in which significant
changes were implemented: responsibility for decision making;
challenging decisions; responsibility for appeals; and monitoring
standards of decision making.
10. In its 2003 report, the NAO produced a flow-diagram
to illustrate the complex DMA process. We have reproduced this
diagram at Annex B to the report.[3]
RESPONSIBILITY FOR DECISION MAKING
11. Section 1 of the Social Security Act 1998
transferred responsibility for all decision making from adjudication
officers to the Secretary of State. Before the 1998 reforms,
decisions regarding legal entitlements to benefits or child support
were made by adjudication officers or child support officers,
under the authority of the statutorily independent Chief Adjudication
Officer, whereas administrative decisions (such as those concerned
with information collection) were taken under the authority of
the Secretary of State.
12. The consultation that preceded the introduction
of the Act found that respondents who were in favour of the creation
of a single status decision maker supported the proposal because
they believed it would help to create a simplified and efficient
system, which in turn, was expected to improve decision making
accuracy. Those who opposed the change, argued that the transfer
of responsibility for decisions from adjudication officers to
DWP decision makers would compromise the independence of the decision
making process.[4]
CHALLENGING DECISIONS
13. Prior to the 1998 reforms, claimants had
three months in which to appeal against a decision. For some
benefits, such as Disability Living Allowance, there was an in-built
formal review before an appeal, whereas for other benefits, such
as Income Support, adjudication officers could only review decisions
where there was an error of law, a mistake in material fact, or
a relevant change of circumstances.[5]
14. Following the reforms, the process of challenging
a decision changed in two fundamental ways. Firstly, Section
9 of the Social Security Act 1998 introduced the possibility for
decisions to be either revised, without needing to establish grounds
for a review, or to be superceded. A revision would replace the
original decision and take effect from the date that decision
was first made. A supersession would insert a new decision that
would take effect from a date later than the original decision.
Secondly, the time limit in which claimants were able to request
that their decision be either reviewed (reconsidered) or superceded
was reduced from three months to one month.
15. Again, the consultation elicited different
opinions on these proposals. Those in favour of the introduction
of new methods of reconsideration, particularly if, as the Green
Paper suggested, they could be conducted "by telephone or
interview", supported the extension of grounds on which a
review could be undertaken and argued that the changes could reduce
the number of "unnecessary" and "hopeless"
cases progressing to appeal.[6]
16. Respondents who opposed the introduction
of the new review procedures voiced their concern that claimants
who were unsuccessful at this stage may feel discouraged and decide
not to pursue an appeal they might win. Others argued that the
introduction of a formal reconsideration process would create
an additional tier that may increase the complexity of the DMA
process for the claimant. In order to address these concerns,
a number of respondents argued that the Benefits Agency (the body
then responsible) should produce a written record of the review
proceedings or a written, reasoned decision if appropriate.[7]
RESPONSIBILITY FOR APPEALS
17. Section 4 of the Social Security Act 1998
created a system of unified appeal tribunals, to replace the Independent
Tribunal Service, which was responsible for social security tribunals,
along with the Pensions Appeal Tribunal, the Industrial Tribunal,
the Independent Review Service, the Irish Social Welfare Appeals
and the Land Registry Tribunal. In its place, the Appeals Service
was established, which comprised the tribunals responsible for
the judicial functioning of appeals, headed by a President of
Appeal Tribunals and an executive agency responsible for the administration
of appeals.
18. The tribunal system was amended again in
2006, following the Leggatt review, which aimed to create a more
coherent and rationalised structure by creating the Tribunals
Service.[8] In its memorandum
to the Committee, the Tribunals Service explained that amendments
to the administrative structure meant that:
"Tribunals outside the Ministry of Justice and
its predecessors transferred into the new organisation, as well
as new jurisdictions being added. One of the most significant
impacts of the then Appeals Service (now SSCS) joining the Tribunals
Service was the separation from DWP and the visible independence
this brought by physically establishing the division between First
Tier Agency decision makers and those responsible for the administration
of appeals."
19. Further reforms, following the Tribunals,
Courts and Enforcement Act (2007), created a new judicial framework
by bringing all tribunals into a two-tier system made up of expert
judges, with total independence from Government.
MONITORING STANDARDS OF DECISION
MAKING
20. The Social Security Act 1998 brought in new
methods of evaluation for decision making. Prior to the Act's
implementation, standards of decision making were monitored by
the Chief Adjudication Officer (CAO), who reported annually to
the Secretary of State. When the role of CAO was abolished under
the Act, new duties were introduced for the Secretary of State
and the President of Appeal Tribunals. Section 8 of the Social
Security Act 1998 called upon the Secretary of State to:
"[…] prepare, either annually or at such
times or intervals as may be prescribed, a report on the standards
achieved by the Secretary of State in the making of decisions
against which an appeal lies to an appeal tribunal." [9]
21. Schedule 1, Section 10 of the Act stated
that:
"Each year the President shall make to the Secretary
of State a written report, based on the cases coming before appeal
tribunals, on the standards achieved by the Secretary of State
in the making of decisions against which an appeal lies to an
appeal tribunal; and the Secretary of State shall publish the
report."[10]
22. DWP also established a Decision Making Standards
Committee, which is a non-executive body, that provides advice
to the Chief Executives of Jobcentre Plus and the Disability and
Carer's Service. According to the Committee's website, it was
set up to "maintain an independent element within the decision
making reporting process."[11]
Impact of reforms to DMA
23. The reforms made following the 1998 Act have
now been in place for over a decade and DWP have told us that
the current system "is accessible, thorough and comprehensive".[12]
We have considered in turn the major changes since 1998 and
the ways in which their impact have been measured, including payment
accuracy, claim clearance and error rates and appeals statistics.
ABOLITION OF THE ROLES OF CHIEF ADJUDICATION
OFFICE (CAO) AND ADJUDICATION OFFICER (AO)
24. HH Judge Robert Martin, the President of
the Social Entitlement Chamber of the First-tier Tribunal, argued
that the abolition of the CAO and AO roles and the restructuring
of responsibility in the decision making process had compromised
objectivity by transferring responsibility from independent officers
to departmental officials. He suggested that the previous system
placed:
"[…] a premium on professional independent
decision making. After the change which vested decision making
in the Secretary of State and officers under the Minister there
was a loss of that independence and operational pressures focusing
on targets, which essentially were about the throughput of claims,
took pride of place. I believe there was a deterioration in the
quality of decision making through that internal reorganisation."[13]
25. The Administrative Justice and Tribunals
Council (AJTC) agreed that the post-1998 arrangements for DWP
Chief Executives to have ultimate responsibility for decision
making is "not generally perceived to be as independent as
the former Chief Adjudication Officer".[14]
26. We note the concerns of
some witnesses that the transfer of responsibility for decision
making to the Secretary of State for Work and Pensions from the
Chief Adjudication Officer has led to a reduction in the independence
of decision making and even a deterioration in the quality of
decision making. We ask DWP to set out how the existing system
safeguards objectivity in the decision making process.
MEASURES OF DECISION MAKING STANDARDS
27. The Department provided three alternative
measures of its decision making standards: payment accuracy, claim
clearance rates and official error.
Payment accuracy and clearance rates
28. In 2008-09, the Department had either reached
or exceeded all but one of its targets for payment accuracy and
claim clearance rates:
Figure 1 : DWP performance against payment accuracy
and claim clearance rates targets
| Benefit
| Payment accuracy
(%)
| Payment accuracy target (%)
| Average claim clearance rate
(days)
| Target for average claim clearance rate (days)
|
| Carer's Allowance
| 99.4 |
98.0 | 12.4
| 13.5 |
| Pension Credit |
92.1 | 92.0
| 15 |
15.0 |
| Housing Benefit / Council Tax Benefit
| 98 |
Not provided
| 26 |
Not provided
|
| Disability Living Allowance[15]
| 92.2 |
94.0 | 29.8
| 38.0 |
| Attendance Allowance[16]
| 94.1 |
94.0 | 12.3
| 16.0 |
Source: Ev 139 para. 5.3
29. The table above provides data on benefits
administered by the Pensions, Disability and Carers Service (PDCS)
and does not include data for Jobcentre Plus benefits. We asked
DWP for figures on payment accuracy and claim clearance rates
targets for Jobseeker's Allowance, Incapacity Benefit, Income
Support, Employment Support Allowance but were told this data
is not validated and is therefore not suitable for publication.[17]
Fraud and error
30. The DWP has seven Departmental Strategic
Objectives (DSOs) which underpin its contribution to achieving
the Government's cross-departmental Public Service Agreements
(PSAs). DSO 6 encompasses the DWP's decision making standards
and commits the Department to "pay […] customers the
right benefits at the right time."[18]
Progress against this objective is measured using the Office
for National Statistics Fraud and Error Report. The 2009 Departmental
Annual Report states that DWP has made "some progress"
on this DSO, as fraud and error levels and benefit processing
times had remained constant despite the increasing claimant count.[19]
31. Jeremy Groombridge, Jobcentre Plus' Director
of Transformation and Product Management, outlined some of the
initiatives that the agency had undertaken to tackle official
error:
"Very recently we have taken steps to appoint
what we call error reduction champions in each part of our business
in our contact centres, benefit processing areas and the customer
service directorate. We support them with error reduction teams
and generate important new products and checks to ensure that
particularly our newer staff—we have recruited very large
numbers of staff to cope with the recent downturn and consequent
rise in volumes—are both checked and trained effectively."[20]
32. Similarly, Vivian Hopkins, Chief Operating
Officer at the Pension, Disability and Carers Service (PDCS) explained
that the Agency has:
"[…] a whole programme of activities to
deal with new and repeat claims which include extra training for
decision making, pre-payment accuracy checks and some sophisticated
checking afterwards, highlighting the more complex cases or those
where it is easiest for the customer or us to get it wrong, or
where people are most likely to try to get it wrong."[21]
33. The latest fraud and error statistics were
published in November 2009. Those statistics showed that overpayments
due to fraud and error had come down from 3.2% of benefits paid
in 2000-01 to 2.2% in 2008-09. However, this figure masked an
increase in overpayments due to official error from £0.4
billion in 2000-01 (or 0.4% of benefits paid) to £0.8 billion
(or 0.6% of benefits paid) in 2008-09. Total underpayments resulting
from official error and customer error have also increased from
£0.8 billion (or 0.7% of benefits paid) in 2004-05 to £1.2
billion (or 0.9% of benefits paid) in 2008-09. Official error
resulting in underpayments was responsible for £0.4 billion
of these underpayments in 2004-05, rising to £0.5 billion
in 2008-09.
Figure 2: Estimated overpayments due to fraud
and error since 2000-01
Figure 3: Estimated underpayments due to fraud
and error since 2004-05
34. We commend the Department's
performance against its targets for payment accuracy and claim
clearance rates for a number of benefits. However, we were surprised
to learn that the equivalent data for Jobseeker's Allowance, Employment
Support Allowance, Incapacity Benefit or Income Support is not
validated and is therefore not suitable for publication. We ask
the Department to explain why it does not publish data on payment
accuracy and claim clearance rates for these major benefits and
recommend that it begins to do so as soon as possible.
35. We acknowledge the work
the Department's agencies are undertaking to address error, including
the appointment of "Error Champions" in Jobcentre Plus
and pre- and post-payment accuracy checks in the Pension, Disability
and Carers Service. We ask the Department to monitor the impact
of these measures and to ensure that agencies share information
about measures that are successful in reducing levels of official
error.
36. However, we believe that
the cost of official error due to overpayments of benefits is
still far too high at £800 million in 2008-09, and we are
concerned that this figure has risen significantly since 2000-01.
We are equally concerned by the increase in the total amount
of underpayments resulting from official error since 2004-05.
In light of the 1998 reforms of the decision making and appeals
system, which were designed to improve decision making, we ask
the Department to explain why levels of official error have risen
since 2000-01.
MONITORING STANDARDS OF DECISION
MAKING
Report by the Secretary of State
37. The Social Security Act 1998 formally introduced
reporting duties for the Secretary of State on standards of decision
making. Since then, the Secretary of State has produced three
reports on standards of decision making; the most recent was published
in 2006 and covered decisions made in Jobcentre Plus, The Pensions
Service and the Disability and Carers Service during the period
1 January 2002 to 31 December 2003 and in the Child Support Agency
for the period 1 April 2002-31 March 2004.
38. The infrequency of report publication runs
counter to assurances given in the House of Lords, during second
reading of the Social Security Bill. The then Parliamentary Under-Secretary
of State, Baroness Hollis of Heigham said:
"I can assure the House that it is our intention
to produce reports annually or as near to each year as possible."[22]
39. The most recent report included the Secretary
of State's percentage breakdowns of the accuracy of initial decisions;
the accuracy of reconsidered decisions; appeals statistics; and
overpayment recoverability decisions. It also outlined initiatives
that DWP's agencies were undertaking to improve decision making.
The document also included a report from the Comptroller and
Auditor General which concluded that the Secretary of State's
assessment of the percentages of decisions that were correct and
of the accuracy of both child support maintenance assessments
and appeal submissions presented "a reasonable representation
of the quality of decisions" made by DWP. However, he concluded
that he could not validate the majority of data provided in the
Secretary of State's report, particularly:
a) Information on the percentage of reconsiderations
found to be correct ;
b) Data on the applications for revisions and
their outcome;
c) Information on benefit appeals lodged, the
number of appeals heard and appeal success rates;
d) Percentage of appeal submissions meeting required
standards; and
e) Percentage of overpayment recoverability decisions
found to be correct.
40. The Comptroller and Auditor General concluded:
"I have been unable to confirm that a substantial
part of the information set out in the Secretary of State's report
is fair and balanced. The introduction of new material to the
report in line with recommendations I have made previously to
the Department is welcome. However, unless all such performance
data is subject to satisfactory quality assurance processes as
to its robustness, the resultant report will be of limited utility
as a measure of the Department's success in improving the accuracy
of decision making."[23]
41. It is unacceptable that,
despite the Government committing to publishing a report by the
Secretary of State on the Department's decision making standards
"annually or as near to each year as possible" the most
recent report was published in 2006 and only covered the 2002-03
period. The failure of the Secretary of State to provide an assessment
of decision making in the last six years means the Department
is not fulfilling promises made by the Government during the passage
of the Social Security Act 1998. We ask the Secretary of State
to explain why the Government's commitment to publishing an annual
report on decision making standards has not been fulfilled and
to announce when reports will be published for the six years since
2003.
42. We note with concern that
the Comptroller and Auditor General was unable to confirm that
a substantial part of the information set out in the last report
by the Secretary of State was "fair and balanced".
We are further dismayed by his conclusion that the information
within it would be of "limited utility as a measure of the
Department's success in improving the accuracy of decision making".
Reliable data are crucial to ensuring that decision making accuracy
is measured effectively and the Department's failure to collect
this information reduces the likelihood of appropriate improvements
being made to the system. We also ask the Secretary of State
to provide evidence to demonstrate that data collection on decision
making and appeals has improved since the last report was published.
President of Appeal Tribunals Report
43. The Social Security Act 1998 imposed a duty
on the President of Appeal Tribunals to make an annual report,
based on cases coming before tribunals, on the standards of decision
making achieved by the Secretary of State. The President's report
was based on a sample of cases coming before the tribunal. In
2007-08, the sample size was 1,886 and reflected the range of
appeals by benefit type.[24]
44. In 2008, the final President of Appeal Tribunals
annual report was published. The Tribunals, Courts and Enforcement
Act 2007 wound up the Appeal Tribunals from 3 November 2008, along
with the role of its President. The Act did, however, confer
a duty on the Senior President of the new tribunal to provide
systematic feedback to the Secretary of State on standards of
decision making.
45. The 2007-08 report summarised the key themes
that have emerged since publication began in 2001, as follows:
a) DWP should engage in more face-to-face contact
with claimants;
b) There was no consistent evidence of the effectiveness
of reconsiderations;
c) Some medical reports have underestimated the
severity of disability; and
d) Benefit claims and the appeals process could
be particularly difficult for people with specific disabilities
such as mental health issues or sensory impairments.[25]
46. The former President of Appeal Tribunals
(now the President of the Social Entitlement Chamber of the First-tier
Tribunal), Judge Robert Martin, told us that, despite raising
similar concerns each year, he believed "no one" within
DWP had listened to the conclusions and recommendations detailed
in the President's annual report.[26]
He explained that he had, in the past, asked for examples from
the Department, which could demonstrate how the President's report
had influenced or changed DWP decision making. He told us that,
despite his request, he had received no examples from DWP to illustrate
the report's value.[27]
47. We are surprised and disappointed
to learn that the President of the First-tier of the Social Entitlement
Chamber had seen no evidence that the Department has listened
to the feedback provided in the annual reports of the President
of Appeal Tribunals. We recommend that the new Senior President
of Tribunals should continue to produce an annual report on standards
of decision making and that the Secretary of State should undertake
to publish a response to it within two months of its publication.
DWP Decision Making Standards Committee
48. As part of the DMA reforms, the then Benefits
Agency set up a Decision Making Standards Committee, as an additional
means of reviewing DWP's decision making standards. In February
2003, the Benefits Agency Decision Making Standards Committee
was replaced by the DWP Decision Making Standards Committee.
Like its predecessor, this remained a non-executive body, which
monitors the standards of decision making in benefits across DWP
and reports to the Chief Executives of Jobcentre Plus, and the
Pension, Disability and Carers Service. In 2008, the Committee
dropped "Decision Making" from its title to become the
"DWP Standards Committee".
49. The Standards Committee's webpage outlines
its three key objectives:
a) to provide independent advice to senior executives
on whether reports on the standard of benefit decision making
are accurate;
b) to identify and make recommendations on the
areas where standards can be improved; and
c) to look at specific issues raised by the Agency
Chief Executives that may affect the standard of decision making.[28]
50. The Standards Committee is currently composed
of a Chair and three members, who are independent of DWP, and
provide objective advice on the decision making process.[29]
DWP explained that the Standards Committee agreed its programme
of work with Jobcentre Plus and PDCS, and focused on areas that
might require improvement.[30]
51. In 2005, the Standards Committee criticised
DWP for failing to give decision making a big enough priority.
In 2008, the Committee again expressed concern about decision
making standards, concluding that there was an over-reliance on
the medical model when making decisions on disability benefits
and that some staff had "entrenched views" which impacted
upon their approach to decision making.[31]
52. Lancashire County Council Welfare Rights
Service told us that one of their advisers participated in the
Standards Committee's Representatives Group and had reported that
the Committee "dealt mainly with general issues […]
and was somewhat removed from effecting change in the frontline
DWP decision making processes".[32]
The Administrative Justice and Tribunals Council (AJTC) argued
that the Standards Committee's reports are "perhaps not generally
perceived to be as independent as the former Chief Adjudication
Office".
53. The Standards Committee produced four annual
reports between 2003 and 2008, which have each identified areas
where decision making needs to be improved. The first three reports
included appendices which provided clearly presented updates on
the progress the Department has made towards the recommendations
made in the previous year's report. However, the style and format
of the most recent report, published in 2008, has changed. Rather
than providing a single written summary, tables of recommendations
are given for different executive agencies throughout the report,
whilst responses to those recommendations are given in a series
of different tables.
54. The Standards Committee
was established to monitor decision making within the Department
and we believe that this important role should be more formally
recognised. We recommend that "Decision Making" should
be reinstated in its title to ensure that its main purpose is
clear, both to internal and external stakeholders. We also recommend
that the Department publish a response to the Standards Committee's
recommendations within two months of the publication of a report
of the Committee.
55. The change in format of
the Standards Committee's annual report has resulted in an esoteric
document, which we found less accessible than previous reports.
It is important that the Standards Committee's conclusions and
recommendations are clear and readily understandable. We ask the
Standards Committee to reintroduce a summary of how the Department
has responded to the previous year's recommendations.
3 Adapted from National Audit Office (2003), Getting
it right, putting it right improving decision making and appeals
in social security benefits, HC 1142 Session 2002-03: 7 November
2003 Back
4
Department of Social Security (1997) Consultation on Improving
Decision Making and Appeals in Social Security: Analysis of responses
pp 24-25 Back
5
Department of Social Security (1997) Consultation on Improving
Decision Making and Appeals in Social Security: Analysis of responses
p 29 Back
6
Department of Social Security (1997) Consultation on Improving
Decision Making and Appeals in Social Security: Analysis of responses
pp. 31-32 Back
7
Department of Social Security (1997) Consultation on Improving
Decision Making and Appeals in Social Security: Analysis of responses
pp. 35 Back
8
Leggatt (2001) Tribunals for Users One System, One Service:
Report of the Review of Tribunals by Sir Andrew Leggatt, March
2001 Back
9
Social Security Act 1998, Part IV, Section 81 Back
10
Social Security Act 1998, Schedule, Section 10 Back
11
DWP Decision Making Standards Committee webpage: http://www.dwp.gov.uk/publications/specialist-guides/dwp-decision-making-standards/what-we-do/
Back
12
Ev 126, para 1.3 Back
13
Q69 Back
14
Ev 147, para 13 Back
15
For DLA and AA the accuracy is measured in terms of the quality
of the decision itself. Back
16
For DLA and AA the accuracy is measured in terms of the quality
of the decision itself. Back
17
Ev 164 Back
18
DWP (2008) The New Performance Framework Back
19
DWP (2009) Departmental Report 2009, Annex A, p 79 Back
20
Q93 Back
21
Q94 Back
22
Offical Report, 20 April 1998; Column 926 Back
23
Report by the Secretary of State for Work and Pensions on the
standards of decision making in Jobcentre Plus, The Pension Service,
Disability and Carers Service and the Child Support Agency 2002
and 2003, p 19 Back
24
Apart from child support maintenance appeals, which constitute
just 1% of appeals therefore are over-represented to allow meaningful
analysis. Back
25
Tribunals Service (2008) President's Report: Report by the
President of Appeal Tribunals on the standards of decision making
by the Secretary of State 2007-08, p 7 Back
26
Q71 Back
27
Q71 Back
28
http://www.dwp.gov.uk/publications/specialist-guides/dwp-decision-making-standards/standards-committee/ Back
29
Ev 132, paras 7.1-7.4 Back
30
Ev 132 Back
31
DWP Standards Committee (2008) Annual Report 2007-08 Back
32
Ev 124 Back
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