To be published as HC 692 i

House of COMMONS



Communities and Local Government Committee

The Work of the housing ombudsman

WEDNESDAY 7 November 2012

David Orr and gavin smart

dr mike biles

Evidence heard in Public Questions 1101



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Oral Evidence

Taken before the Communities and Local Government Committee

on Wednesday 7 November 2012

Members present:

Mr Clive Betts (Chair)

Bob Blackman

Bill Esterson

David Heyes

James Morris

Mark Pawsey

John Stevenson


Examination of Witnesses

Witnesses: David Orr, Chief Executive, National Housing Federation, and Gavin Smart, Director of Policy and Practice, Chartered Institute of Housing, gave evidence.

Q1 Chair: We will start our proceedings and welcome you both to the start of the inquiry into the Housing Ombudsman Service. Thank you both for coming. For the sake of our records, if you could just introduce yourself and say which organisation you represent, that would be helpful.

David Orr: I am David Orr, Chief Executive of the National Housing Federation.

Gavin Smart: I am Gavin Smart, Director of Policy and Practice at the Chartered Institute of Housing.

Chair: Thank you both for coming and I apologise for keeping you. Unfortunately, we had a couple of votes that came at exactly the wrong time, as they tend to, but thank you for bearing with us. David Orr, you are quite a regular visitor to our sessions.

David Orr: Indeed.

Q2 Chair: It is good to have you with us again.

I just wonder whether you could say a little bit about your members, and typically what sort of arrangements they have in place to deal with complaints and how that relates to your work with the Housing Ombudsman. What sort of relationships generally do your members have with the Housing Ombudsman Service?

David Orr: It is a requirement of registration if you are a housing association that you have a functional complaints procedure in place. There is no standard format for them, but typically they are the kind of procedures where you make your complaint, it is heard and if you are not satisfied with the outcome it gets pushed up the line a little bit-there is a process within the housing association. Some of these procedures have been, perhaps, a bit lengthy and have too many layers in them, and there is some evidence that the processes are becoming a little bit sharper.

Housing associations, I think, like the fact that the Ombudsman Service generally requires evidence that a complainant has been through the organisation’s own complaints procedure before it can be referred to the Ombudsman. I think that is right. It is always important that proper internal procedures and processes are carried out before it gets referred outside the organisation.

More generally, I think the Ombudsman Service is held in pretty high regard. There is a good relationship between the service and housing associations and a good record of housing associations taking the action that the Ombudsman proposes. It was not always the case, but certainly over the last few years there has been a good deal of respect among our members for the way the Ombudsman Service is carried out.

Q3 Chair: Would that be your view as well?

Gavin Smart: It would absolutely be, yes. Our members, who are individuals rather than corporate members, tell us that they regard the Ombudsman as doing a very good and valuable job. It is not just about the complaintsreceiving function the Ombudsman executes; it is also about the work the Ombudsman has done in terms of training and development, increasing people’s ability to engage with complaints procedures and, as David said, helping associations to improve the way in which they handle complaints. So we would say, yes, the Ombudsman has done a very good job.

Q4 Mark Pawsey: I wonder if I could ask some questions about the volume of work that is involved. Mr Orr, you have just said that the Ombudsman needs evidence that complaints have gone through an internal body’s procedure first. According to the stats we have, there were 5,844 cases in 2011-12, which was an 84% increase on 2007-08, which is a pretty substantial increase. Those 5,844 cases come from a housing stock of 2.9 million, which I calculate to be 0.2% of the stock giving rise to a complaint going to the Ombudsman every year, which equates to one complaint per 500 residential units. Do you think that is too many? What does that say about your members?

David Orr: That is an interesting way to phrase the question. Is it too many? I think it is what it is. I think the growth in the number of complaints that reach the Ombudsman is partly due to a slow and incremental growth in the size of our sector. It is partly also due to there being greater confidence in the Ombudsman Service, so some issues are referred that might not have previously been referred because there is confidence in the whole process and in the way that that process is managed. Is it too many? I suppose the answer I ought to give is that one is too many, if it is an unresolved complaint.

Q5 Mark Pawsey: We are very conscious that these are cases that have already gone through an internal procedure within a body.

David Orr: Yes.

Q6 Mark Pawsey: The statistic I do not think we have is what proportion of complaints that are raised to your members work their way to the Ombudsman. Do you know that stat?

David Orr: No. We do not keep statistics about complaints separately. It would be possible to find out, because-

Q7 Mark Pawsey: These are only the cases that are not able to be resolved through the internal mechanisms of your members.

David Orr: That is right. These are the cases that are not able to be resolved. There are all kinds of complaints that happen and it is not really surprising that some of them need a degree of external consideration. If a housing association is managing a repairs programme and says, "We are going to do X over this period of time," and an individual tenant says, "I want something to happen to a different timetable," they may have a legitimate complaint because they think they need that service more rapidly. That complaint would normally be dealt with through the internal complaints process and usually satisfactorily resolved. But from time to time, the complainant will say, "Well, we have got to the end of the process; I am still not happy and want to have an external view taken of this."

Q8 Mark Pawsey: Mr Smart, have you got a view about the volume of complaints that are finding their way to the Ombudsman? One in 500 properties per year strikes me as rather a lot.

Gavin Smart: I do, but I would echo quite a lot of the things that David has said. A degree of it is to do with the success of the Ombudsman scheme. It is to do with the fact that people believe it is a real scheme that works properly, so it is something you would want to engage with. Having said that, I also agree with David that we would want to be in a world where there are no complaints, but organisations, landlords and their tenants may not always agree on priorities and they may not always agree on the way that something was done. It is important that there is the opportunity for people to complain about the service they have received and, just as you might complain to any other organisation providing you with a service, it is important that if they are not satisfied with the result they have got from the internal process, they can take it somewhere else. I do not think that necessarily means that there is a major problem here.

Q9 Mark Pawsey: So between you, you are saying there are more cases because the Housing Ombudsman deals with them more effectively. What are your concerns moving forward if the volume of work continues to increase at the rate that it has over the past two or three years?

David Orr: Given the changed arrangements, the volume of work is going to increase, partly because of that and partly because of the new responsibilities that the Ombudsman has. The service will be valuable only if it is resourced in such a way as to allow it to meet that demand. Is it probable that in real terms the number of complaints will increase? It is certainly possible. Some individual tenants are under pressure-let us say because of antisocial behaviour of some kind-in a way that is very difficult for the landlord to resolve. Generally speaking, people are getting much better at doing this, but there are occasions where the only sensible resolution is for the perpetrator of the antisocial behaviour to be moved out. It is still incredibly difficult to get possession orders in those circumstances. It may take a very long time. Neighbours may have legitimate complaints. If, over the next few years, the volume of complaints increases because of a greater degree of unrest or because the pressure on the delivery of the housing service grows, both of which are quite possible, I think it is possible that we will see a real-terms increase in the number of complaints that go to the Ombudsman. But I do think that the critical thing here is to ensure that landlord organisations have robust and functional complaints procedures so that as many of them can be dealt with internally as possible.

Q10 Mark Pawsey: So do you think the landlords could be doing more to resolve these matters and preventing them from becoming Ombudsman cases?

David Orr: Again, in an ideal world you would prevent there being a complaint at all. If there was a complaint, you would deal with it rapidly.

Q11 Mark Pawsey: Could landlords do more to prevent them?

David Orr: They could always do more, but over the last few years the efficiency and effectiveness of complaints management has increased and improved, partly because housing associations are talking to the Ombudsman about how to manage complaints.

Q12 Bill Esterson: I would like to turn to the types of complaints. In particular, repairs accounted for 46% of complaints in 2011-12. The Ombudsman made a similar comment to the one you made just now, David, about the increase and the expectation that a lack of investment in repairs could be driven by lack of funding. What impact on the Ombudsman’s workload do you foresee as a result of that pressure?

David Orr: I hope that the impact on the Ombudsman’s workload will be negligible, but this is an increasingly challenging environment for landlord organisations. They have to ensure that they have the income stream and the funding that they need to ensure not only responsive, reactive maintenance, but the longerterm cyclical investment in ensuring the quality of the housing stock. These are things that landlords plan for. If you have a plan that says, "We will be replacing the glazing in this block next year," and an individual household has a draught through a window, the individual householder may say, "I have a complaint because you are not fixing this." The housing association may say that by far the most costeffective way to do this is to go in and do the whole block in one go. If that ends up getting to the Ombudsman, is that a failure? Yes, it is. Is it entirely surprising that one or two of them will end up at the Ombudsman? No, it is not, because what will inevitably happen is that just occasionally it will be impossible to get everyone to agree. That is why it is important that there is an external, objective assessment of the kind that the Ombudsman can carry out.

Q13 Bill Esterson: Gavin, do you have anything to add?

Gavin Smart: I would agree with that. In a sense, it is not surprising that repairs are the single biggest source of complaints, because we know that they are the most contested part of housing and housing management. Any landlord will tell you, if you want to improve your net resident satisfaction, you engage in improving your repairs function, because it is the thing that people engage with most often. As David says, quite often landlords and their residents are able to reach agreement about a repair where they have not initially agreed, but sometimes it is a matter of the need of an individual household versus a proper, planned approach to longterm maintenance and refurbishment. Sometimes it can be a disagreement about prioritisation: what is an urgent repair that needs doing within 24 hours or less, and what is something that can be managed and dealt with on a longer time frame? Residents always, of course, want their property dealt with as soon as possible.

Q14 Bill Esterson: You both seem to be saying that better planning and preparation by landlords are going to head off any dramatic increase in repairs, whereas the Ombudsman is expecting an increase due to the fall in funding. If there is an increase, do you think the Ombudsman is in a position to deal with an increase in complaints?

Gavin Smart: The Ombudsman is better placed to answer that than I am, but looking at the Ombudsman’s evidence, you can see that they are already feeling the increasing pressure of an increasing caseload. Having seen a long period of improvement in performance in things like bringing down the average amount of time to deal with a complaint-I think from 27 weeks to 15 weeks-it has gone back up to about 17 weeks, which seems to be an indication of the system coming under pressure. I do not think we would conclude from that that the efficiency of the Ombudsman’s operation has changed, but the amount of work they are having to deal with is now greater than it was before.

Q15 Bill Esterson: Anything to add?

David Orr: I am just thinking about the context here. If you talk to housing associations at the moment, they will say that they are planning for a reduction in real terms in income of between 1% and 5%-it varies-because of a whole series of changes that are taking place as a result of benefit policy and other changes. If you have £1 million less in your organisation, you have to make decisions about what goes. The starting point for any housing association is to ensure that its housing stock is well managed and maintained. That is exactly where you start from, but there are very substantial pressures on all kinds of other services that they provide. Realistically, it is possible that we will see greater tension in that relationship between landlord and tenant in respect of repairs. It is possible.

Gavin Smart: Can I add to that? I think what is also happening is that you are seeing landlords saying, in an era of constrained resource, as David was describing, "Do we need to revisit the quality standards or the way in which we currently provide our services and do we, in some cases, need to do things in a different way?" Change is always an uncomfortable process and some tenants and residents will not necessarily like it and they should have the right to appeal about that.

Q16 Bill Esterson: If there is that tension, is there anything that should be done differently in the reforms to the Ombudsman, because the pressure will fall on the Ombudsman at some stage?

Gavin Smart: Our concern mostly is about the resourcing for the Ombudsman. We feel that the Ombudsman does a good job. It is an efficient service; it resolves complaints. The question is: will it be sufficiently resourced to take on the additional workload that comes from looking after local authority complaints as well?

David Orr: I would also say that, as an organisation, we are very sceptical of the proposed benefit of having to go through a designated person. I think one of the reasons why the Ombudsman Service has worked is that landlords trust the service and tenants trust the service and you go through the process in your organisation, and if you do not get satisfactory redress you have the opportunity to go to the Ombudsman. Inserting another stage into that might reduce some of the pressure on the Ombudsman Service, but I am not at all convinced that it will increase the quality of the service, particularly to individual tenants.

Q17 James Morris: Clearly, there are external demands on the Ombudsman. There are big changes in the external environment: welfare reform, changes to legal aid and changes to housing law. To what extent do you think those external pressures will increase the workload of the Ombudsman? What pressure will they place on other providers, such as social landlords?

David Orr: When you bring in the kind of systemic change that we are seeing at present, there is always a period of transition and resettling until you get to what becomes the new norm. During that period, it is likely to be the case that there will be an increase in the number of complaints. Let’s say, for example, that a housing association offers a fixed-term tenancy and the tenant concerned is not happy with that. There is not much redress to the Ombudsman there, but the tenant may not be happy about it and there will be a complaintbased discussion that takes place within that organisation. Until you get to whatever the new equilibrium looks like, the transition period is bound to raise things that have not been the subject of complaint previously, but might be now. Some of those will go through the internal process and may be referred to the Ombudsman. It is possible that the Ombudsman will say, "These are outside my jurisdiction," but it is possible that they will get there. So, with the scale of change that is happening, it is probable that just that transition period in itself will create circumstances that are likely to lead to more complaints.

Gavin Smart: There is another important transition as well, which is the whole move to the designated person architecture.

Q18 James Morris: The evidence that was submitted by the Housing Ombudsman said that some things, such as the impact of designated persons and improving the quality of dispute resolution, would have the impact of reducing demand.

Gavin Smart: It may over the longer term, but there is a question about what happens as that new system beds down. There are questions about the degree to which all councillors or tenant representative organisations are aware of this new responsibility that they will have and about their ability to deal with that in the shorter term.

Q19 James Morris: The Ombudsman also said that "the impact of coregulation causing landlords and tenants to work better together" will have an impact of reducing demand. Do you agree with that? What impact is that going to have on your members?

Gavin Smart: I think that is a fair observation. Coregulation encourages landlords, tenants and residents to work together to get a better understanding of each other. That process is in train-it is happening-and it is something that both local authorities and housing associations set great store by. I would not disagree with that.

Q20 James Morris: The other factor was that, clearly, lower availability of housing is a reality. The Ombudsman argues in his submission that that is also going to reduce demand, or it could have a perverse effect. What do you think about that?

Gavin Smart: It is a hard one to judge, isn’t it? There is the argument that people will accept where they are because there is not the opportunity to move and I can see how that could reduce demand. I suppose the alternative explanation is that if you realise you cannot escape something you are unhappy with by moving, you might decide to take it on.

David Orr: I think partly it depends on how you define increased demands on the Ombudsman. One of the things that I think might happen is that there will be a lot of enquiries to the Ombudsman where the Ombudsman will say, "You have not spoken to a designated person. Go and take this to a designated person." That does not become a case, but it is activity; work will be required in farming those requests. The whole allocations process is likely to be under strain. Will that lead to an increased demand on the Ombudsman? Quite possibly.

Gavin Smart: I think David makes a good point. If you look at the Ombudsman’s evidence, it shows the number of initial enquiries that are already ruled to not be legitimate for the Ombudsman to look at. You might expect that to increase, simply through a lack of understanding of how the Ombudsman functions and what the Ombudsman is for.

Q21 Chair: I want to move on to the funding arrangements. With the transfer of responsibilities from the Local Government Ombudsman, there is going to be a need to identify extra funding to go with that. Have you got concerns that that, at least in the short term, may result in inadequate funding for the service? Have discussions begun with yourself, David, about the arrangements from 2014 onwards as to how the local authority sector is going to make a contribution?

David Orr: We have not had very specific conversations yet with the LGA, which is our counterpart for this conversation. To be perfectly frank, from the Federation’s point of view, under the present mechanism of charging fees, I have not yet come across a housing association that likes paying fees-and I know something about people paying fees for a service. But people understand and accept the legitimacy of the Ombudsman Service and value the quality of that service and they are, therefore, prepared to pay for it. What I think will be difficult, certainly for our members, is if the service suffers because the additional workload has not brought additional fees or additional income with it, so that the Ombudsman is not able to deal with the increased demand and, therefore, there is a poorer service for everyone. So, if the fee that housing associations pay remains the same but, relatively speaking, the volume of resource that is able to deliver the service is diminished because of the increase of activity from elsewhere, that would be an unfortunate outcome. I think the Local Government Association has to be deeply involved in this conversation and we are very happy to talk to them about the extent to which the fee basis works well at present. But given the pressures on local government, I would not be at all surprised if they felt that additional fee demands were a bit of a stretch.

Gavin Smart: I do not have a particularly dissimilar view to David. You would have a concern that, with an increased workload and without some similar funding arrangement for the local authority sector, you might get a reduced service. That is not good for anybody. I think that CLG have said that they are exploring a feebased structure for local authority landlords, and I can see a lot of merit in that, but, like David, I understand local authorities’ budgets are under enormous pressure and a new fee would not be welcome. Having said that, for every 10,000 homes the fee is something like £15,000, so it would not be a major item of expenditure. Nonetheless, no landlord wants to pick up the expenditure if they can avoid it.

Q22 Chair: Do you think it would be more transparent if the local authorities had a fee basis as well rather than a grant coming from CLG for that bit and a fee coming from your members?

David Orr: I think it changes the nature of the relationship between the people who are participants in that whole process. If you are paying for a service, you have a different view about it from a service that is being paid for somewhere else and imposed or provided. It is not always comfortable, but certainly from our point of view, we, as a Federation on behalf of our members, are not seeking a change in the present funding arrangements for the Ombudsman Service. We are just a little bit anxious that the growth in demand, if it does not come with a growth in resourcing, will have an adverse impact on the quality of the service.

Q23 David Heyes: We have probably covered this to some extent already. You have expressed your concerns about this designated person being dropped into the process. One argument in favour of it, of course, is that that brings a local dimension to it-local people with some more local knowledge. Does that not outweigh your concerns?

David Orr: I am strongly in favour of there being mechanisms by which people who are tenants who are receiving any kind of service have the opportunity to speak to their local councillors, their elected representatives or others. I think the question is whether this is something that should be an opportunity or an obligation and I am not at all convinced of the value of it being an obligation, not least because we have spoken to a good number of elected representatives who are not entirely enthusiastic about this additional demand being made on them. If you are a busy local councillor-

David Heyes: Or MP.

David Orr: -or MP, the idea that you are required to be an integral part of the process before a tenant can take a complaint to the Ombudsman is potentially quite a considerable demand.

Q24 David Heyes: Do you share that view?

Gavin Smart: Yes, we share that view. We accept that that is now the structure the Government have chosen to put in place. Is it the one that we would have chosen? No, for the reasons that David has set out. We think that there should be plenty of opportunities for local dispute resolution and, in fact, we would encourage it and that is what good complaints handling looks like. Should it be a requirement that you cannot go to the Ombudsman without having somebody else to come with you and hold your hand? That seems quite odd and maybe adds a burden to the councillor or MP who has to do it, and there is not a great awareness out there either, so I think I am concerned about the transition as well.

Q25 David Heyes: I think you have answered the questions I have put, but I feel under pressure to defend the MPs’ position here. Perhaps we all do. We have had this same debate with the Parliamentary Ombudsman, who wants to remove the MP filter for, arguably, good reasons. My counter to that is that the MP, with their local knowledge, is able very often to head off complaints that would have found their way deeper into the Ombudsman system. Most of the complaints that come to me where somebody says, "I want to take my complaint to the Ombudsman" are capable of being settled by me or by my team and I am sure that is true for all of us. That is not a question.

David Orr: No, but I think that is quite right. There is no doubt at all that elected representatives have a really important role to play in being available for people as a source of information, advice and all these other things. The thing that we are anxious about is it being a requirement rather than an opportunity, not least because one of the things that may happen as the process becomes longer is that the complainant may be frustrated at the number of different steps they have to go through to get their complaint lodged, so they become more entrenched in their complaint because of the length of the process.

Q26 Mark Pawsey: May I follow up that point on the designated person? I share my colleague’s view that in many cases this may prevent some cases getting to the Ombudsman. I think it is a function that MPs pursue in respect of other ombudsmantype services, so I am a bit at a loss as to understand why you feel this is such a bad thing.

David Orr: Perhaps I will give a very quick summary. Our basic starting point in regard to housing associations and the Ombudsman is that the system presently works; it adds value.

Q27 Mark Pawsey: It doesn’t, because the number of cases is increasing massively and any process that reduces the number of cases going to the Ombudsman presumably is a good thing. Having other people look at it, whether they are MPs or councillors, would make them aware of the activity of some of the social housing providers, which they might not otherwise become aware of. Is that not a good thing?

David Orr: If that is the way it happens, fine.

Q28 Mark Pawsey: But you do not think it is a good thing.

David Orr: For us, the question is: is it helpful to take away from a tenant who is a potential complainant the opportunity to go directly to the Ombudsman? The system that is being created may well reduce pressure on the Ombudsman, because it creates an alternative mechanism for dispute resolution, but is it the best way of doing it? I think that remains to be seen. We have been quite happy with the way the service has operated and the closeness of the relationship. Landlord organisations and housing associations understand that if the Ombudsman tells them off, that is a proper telling off and they do what they are told, if I can put it as bluntly as that.

Q29 Mark Pawsey: But that can happen currently without elected representatives being aware of it. This additional step means that elected representatives, whether they are councillors, MPs or whoever, are in the loop and aware of what is going on.

David Orr: That is absolutely true.

Q30 Mark Pawsey: I wonder if I might talk about the overlap that exists with the Local Government Ombudsman with effect from the arrangements from 2013. I think it is Harrow Council that has identified for us areas of overlap, such as how to deal with antisocial behaviour. Have you got concerns about this overlap that will exist between the Housing Ombudsman and the Local Government Ombudsman post 2013?

Gavin Smart: Not massive concerns, no, because the Ombudsmen themselves are aware that there is the potential for complaints that might span both of their remits. They are capable of carrying out joint investigations, of working together and of dealing with the bits of the complaint that they need to deal with while allowing their colleagues to deal with the other part of the complaint.

Q31 Mark Pawsey: But to pick up David’s point earlier that there was confusion about who to go to and how to get to a resolution quickly, this overlap is going to make life harder for tenants, is it not?

Gavin Smart: There is no overlap, is there? They have different jurisdictions. There may sometimes be confusion with the complainant about whose jurisdiction the complaint falls into and it may be that different elements of it cover different jurisdictions.

David Orr: Is this not just redefining where the boundaries lie rather than creating a completely different problem? In the arrangement that has been in place up until now, for someone who had applied for housing through a local authority and was not happy with the process, it would not be clear whether it was the housing association and the Housing Ombudsman who would deal with that, or the Local Government Ombudsman, so there is always an area of negotiation at the point where the areas of jurisdiction come together. I do not think that that has changed. What has changed is the nature of that boundary. But, as Gavin says, there has always been negotiation, not just between the Housing Ombudsman and the Local Government Ombudsman, but with others too.

Gavin Smart: There is also a very good principle here, which is that if, as a tenant, you have a complaint, you go to the Housing Ombudsman, whereas currently, depending on who your landlord is, you may go to one place or another.

Q32 Mark Pawsey: That is the point. People often do not know who their landlord is, because lots of authorities have a common list and they take accommodation and if you say to many people, "Are you in local authority housing or are you in residential social landlord housing?" they are not sure.

David Orr: They do not know.

Q33 Mark Pawsey: That is going to make it very difficult for them to know where they should go when there is a complaint.

David Orr: Can I suggest that it will make it a lot easier for them? What they will know is, whether they are housed by a local authority or a housing association, they will go to the Housing Ombudsman.

Gavin Smart: That is the point that I was making as well. There is now a Housing Ombudsman that you go to if you have a housing complaint.

Q34 John Stevenson: The Ombudsman details a range of initiatives that he will introduce to raise awareness of the changes to the complaints handling process and then goes on to acknowledge that it has been suspended at this moment in time, which is rather worrying. Has this suspension had any impact on your members?

Gavin Smart: I am not sure I have seen an impact yet, but it is a cause for concern because we think that the work that the Ombudsman did in terms of raising awareness and helping to drive improvements in standards of dealing with complaints was very, very valuable. The fact that they have had to suspend it is a cause for concern.

David Orr: In truth, when I speak to members this is not something that they are raising with me. It is not something about which people have been saying, "We are really anxious about this." But I do think, as Gavin says, the role that the Ombudsman has had until now has been a very helpful one. It has helped people to improve their own complaints management procedure and it would be a shame if it was not possible to continue that role.

Q35 John Stevenson: Earlier, we were talking about dispute resolution principles as well and, as you are probably aware, in the modern age the legal system alone is trying to move away from confrontational situations to mediation and other alternative dispute resolution. The Ombudsman wants to develop this. Has it engaged you in this development?

David Orr: We talk fairly regularly with the Ombudsman about a range of different things. There is a whole range of things going on. Among the changes that have been introduced as a result of the coregulation agenda, which we have been very positive and supportive of, is a recalibration of the relationship between landlord and tenant. There is a much greater focus on proper tenant scrutiny and resident involvement-not so much, frankly, at board level, but in terms of a continuing discussion about the quality of service. That feels to me to be the right thing to do. If there is a real debate going on between landlord and tenant representatives about how the service is being provided, that is the best way of ensuring that complaints do not arise in the first place.

Q36 John Stevenson: Would you see it as a way of resolving complaints as well?

David Orr: Potentially, yes.

Gavin Smart: I have a similar view. We engage with the Ombudsman regularly. We have done quite a lot of work with the Ombudsman over the last 10 years that is designed to encourage better practice and the adoption of good practice in the handling of complaints and dealing with complaints. We would want to do that in the future, because we think that is the way in which you get a system that responds to tenants’ and residents’ complaints better. Ideally, you do not want things to get as far as the Ombudsman because you want them to be satisfactorily resolved before they get there. Sometimes that is within a landlord’s process; sometimes, as we have discussed, that is to do with what happens at a local level with councillors or Members of Parliament being involved. That is all welcome. What you want is the fastest possible resolution to a dispute.

Q37 John Stevenson: Yes, which quite often can be mediation.

Gavin Smart: Yes, it can be.

Chair: Thank you both very much for coming this afternoon.

Examination of Witness

Witness: Dr Mike Biles, the Housing Ombudsman, gave evidence.

Q38 Chair: Dr Biles, thank you very much for coming this afternoon to give evidence to us. Can I first of all say I am sorry that we kept you at the beginning? Votes happen occasionally in Parliament and they came at that particular time. Also, thank you very much indeed for agreeing to reschedule today. It was originally going to be Monday, but we had a debate on the local government legislation on Monday and some of us had to be involved in that. I know that involved you making some changes to your personal arrangements as well, so thank you very much for agreeing to that; we appreciate it. I enjoyed coming to see your office four years ago now, I think it was. I had some insight into the work you do there, which was helpful on that occasion.

Looking at the record of complaints, over the last five years the complaints that you have received appear to have been dealt with more expeditiously. You resolved the complaints increasingly effectively, until 2011-12, when the length of time you took to resolve complaints went up. I wonder if you could say a little bit about the improved performance over five years and then perhaps why there seems to have been a little bit of a blip in the last year.

Dr Biles: The improved performance began from a process that we introduced in 2008, which involved a complete reengineering of the core process together with some approaches to people development and people involvement in the office. The combination of those two things saw really strong year-on-year improvements in performance against those elapsed time targets.

I think that it is fair to say, if we looked at the statistics today, that they would not be even as good as they look now in terms of the latest ones. What has happened in recent times is that with an increase in demand and the inability to recruit to the caseworking posts that I needed-for instance, I needed six in April and, as you can see from my evidence, I ended up with three in September-the combination of the organic increase in demand and the inability to recruit caseworkers to deal with it has meant that we are slipping behind that particular performance target output.

Q39 Chair: So things are actually getting worse than they were last year.

Dr Biles: Yes.

Q40 Chair: The Local Government Ombudsman came before us a little while ago. Let me reassure you we have not had anything like the complaints about your service that we were exploring with the Local Government Ombudsman; we were very critical of some cases taking 12 months to be resolved once they got to the Ombudsman Service. But nevertheless, you have had some cases that have taken over 40 weeks. Is that something that is acceptable and something you will be able to tackle in the future?

Dr Biles: In terms of where we were and what we did in 2008 to get those times down-which have been described, by the way, as statistics to die for-that was something that was as a result of the reengineered process and, as I say, the changes that we made. The 43 weeks is a target that we wanted to achieve because there was a time before 2008 where cases were taking over 52 weeks. Now nothing takes that long and now we have nothing taking longer than 43 weeks, which is, taken together with the elapsed time of the average time, an improvement. Whether or not we can achieve those in the future depends on two things: first of all, whether those remain the measures of performance that we end up with after the transition plan and the changes we are going to introduce; and, secondly, whether we have adequate resources to deal with the caseload.

Q41 Bill Esterson: You are going to have a lot more work to do. There is a freeze on recruitment and on spending. Are you going to be in a position to recruit the extra staff or, for that matter, set up a new website, given the financial constraints? If not, how would you manage in that situation?

Dr Biles: The website is a good news story, because we have had the exemption to spend money on that and I signed off the £98,000 today to get that underway. We have the procurement and that is running according to the milestones in our transition project plan.

As to the recruitment, as I have just said, we put a business case forward originally to have six caseworkers in April and we got three in September, so we are already behind in terms of recruitment. We presently have an application in with a business case for an exemption to recruit 12 people and we need to do that pretty much now if we are going to get them in place even for April. I do not know what the answer is. That exemption is, apparently, with the Secretary of State now.

If we do not get the exemption, it rather depends on where we do end up with the resources and how many people I am allowed to recruit, which could be on a sliding scale from zero to 12. Then, of course, you have to start to look at what you do with your resources and how you prioritise those resources. I think it would be a great pity if some of the things that we have just been hearing from Gavin and David in terms of valueadded that we have been able to achieve over the years-and, in fact, which we still intend to seek to achieve with our strategy in the future-started to get lost.

Q42 Bill Esterson: The Local Government Ombudsman and DCLG expect a 14% increase in the demand for your services from local authority tenants alone, and that is an additional pressure on top of what you just been describing. Do you accept that figure?

Dr Biles: I do not know where that figure comes from. I think what we have done-and you were alluding to this, I think, earlier on in some of your questioning-is made some assumptions on the basis of there not being any other kind of clear evidence as to where the demand is coming from. But we think that if you are going to add 1.8 million plus the 300,000 leaseholds in the LHA sector, there will be an automatic increase in demand. Plus, you take what we are projecting at 10% for this year down to the end of March 2013-although that 10%, if you compare the period April to August this year with last year, is looking more like 19%. So the indications that we have got are that there will be this organic, incremental growth anyway and then, if you are going to add 2.1 million, it is pretty certain that there will be some significant increase. Where 14% comes from I do not know.

Q43 Bill Esterson: Presumably, you will need to agree a figure with DCLG and with the Local Government Ombudsman and, presumably, that would have formed part of the business case, as you were describing a moment or two ago.

Dr Biles: It is interesting that you say we agree it. What has been going on is that DCLG has been having a conversation with LGO about what it is that LGO will lose in terms of budget and what we will gain, and we have occasionally and lately been involved in that process. But what that amount is, at the present time, is not known.

Q44 Bill Esterson: You mentioned a figure of 19% just now. Was that council housing or was that combined?

Dr Biles: That is just what we do now.

Q45 Bill Esterson: So what do you think the increase in demand will be from housing association tenants?

Dr Biles: Overall, if you take the whole sector of something like 5 million units, it could be in the region of 60% in terms of inquiries. Presumably they are talking about 14% of cases related to LHAs. I think it might be more than that in terms of the overall 5 million units and the overall sector.

Q46 Bill Esterson: You have used the phrase "enabling accessibility through other appropriate media". Can you tell me what contribution that is going to make?

Dr Biles: Enabling what, sorry?

Q47 Bill Esterson: You talked about "enabling accessibility through other appropriate media" in your submission. Can you tell us the impact of that?

Dr Biles: Accessibility in terms of complainants accessing our service. One of the great pieces of news with this website is that that is where we want people to be able to access and follow their complaint through the web. But the other appropriate media would have to be for people who do not have access to the web, so you would still need things like leaflets, because not everybody can access you through the web. That would be the other appropriate media-quite lowtech media, in fact. It is a posh word, "media", but it is quite lowtech in this context.

Q48 Bill Esterson: You have been warning about these problems in the evidence that you have given to us. Is this a way of making sure that you are covering your own back?

Dr Biles: I think it is a way of raising awareness of what the likelihood might be. In terms of covering my back, presumably I would cut my cloth according to my means, would I not? The question then is, though: would the service that I provide be the service that my stakeholders want and would it be the service, in fact, that Ministers wanted in terms of their intention, particularly in the Localism Act?

Q49 Mark Pawsey: Can I just ask you about the growth in work over the last four years, this 84% increase in cases? Have you got a view about why there are so many more cases? Can I also ask you about the designated person? Do you see that as a device to, perhaps, put some control on the number of cases that come to your office?

Dr Biles: It is difficult to put your finger on one reason why there is an increase in demand. One of the reasons I think was touched upon in the discussion earlier with David and Gavin and that is, in fact, that landlords or providers in my present jurisdiction have encouraged people to complain, to feed back and to compliment in terms of this concept.

Q50 Mark Pawsey: Sorry, compliment is not a complaint. Why would they come to you to compliment? Is that taking your role a little further than it should be?

Dr Biles: No. I am just talking about the concept and the culture, which is to say to people, "We welcome your feedback. Whether that is a complaint or a compliment or whatever it happens to be, we welcome it." The research shows that the highest degree of satisfaction among providers is among those who welcome and encourage complaints. Let us leave it at complaints then. Let us just keep it simple.

Q51 Mark Pawsey: Presumably the compliments should not take your staff very long, because they are just simply noted. It is hardly a case, is it?

Dr Biles: Let’s not get hung up on this. All I am saying is that what housing associations and that sector have been doing has been to encourage people to talk to them and to make complaints. Clearly, compliments do not come to us, but those in that cultural bundle of feeding back that come to us as complaints has been a factor, in my opinion, that has caused an increase in demand.

Q52 Mark Pawsey: So are you saying you are getting all sorts of stuff and not really the meaty, serious complaints and problems, which we really would expect you to be there to deal with?

Dr Biles: No. If we could fast rewind this tape, I would not mention the word "compliment". I was simply trying to make the point that providers have got positive about engaging with their customers and part of that positive culture has led to people being more willing and open to complain and for providers to be more willing and open to deal with the outputs that can come from a complaint, which is a positive thing.

Q53 Mark Pawsey: But if they are encouraging it, they should be able to deal with it and it should not end up in your office.

Dr Biles: Well, that is another question. Yes, maybe they should and, indeed, our big message of the moment is, and has been for some time, that we think that providers should deal with the complaints locally. That is why we started doing the work with training and prevention, which has been suspended, but I am sure you will ask me about that again in a minute and I can tell you what is happening. But why has there been this increase? That might be one reason. Another reason might be that people have become more aware of us. Another reason might be that providers are doing a better job of telling people that we exist. I do not think it is done enough, but some of them will put it in their revised tenancy agreements that the Ombudsman exists. I have an opinion that there was a kind of "kicking the cat" syndrome: people are unhappy with their lives and with things generally and they think, "Well, who can I complain to? I know; it is on the fridge. I will complain to the landlord and they will take me seriously".

Q54 Mark Pawsey: Do you think, therefore, that this designated person role will reduce the number of cases that come to you and some of those "kick the cat" cases would get eliminated and not bog you down and add to the caseload of your office?

Dr Biles: I think that is possible and I think that was Grant Shapps’ intention in introducing the idea of designated persons. We have redrafted our scheme, which is out for consultation at the moment, and that makes provision for how we will interface with designated persons. We think that there is a job for us to do in terms of talking to people like yourselves and councillors and designated panels and saying, "Some of these things you could do better than us. You are local. You could deal with things. We have this concept of things like blocked showerheads and wobbly washing lines and all sorts of other things that you could deal with locally." But there might be other things about which councillors and designated panels might think to themselves, "We do not have the resource to deal with this. This is a bit complex; this is a bit specialist. We will refer that on." I think the task for all of us in the future is to come to a position where we reach an understanding of which ones are better dealt with locally and which ones are better to be referred on. What we need to do is to make the designated person process work positively.

Q55 David Heyes: I think you referred to cutting your cloth according to your means. It must be difficult for you if you do not know what your means are going to be.

Dr Biles: That’s right.

Q56 David Heyes: Just over four months from now the big change takes place and you pick up these responsibilities from the Local Government Ombudsman. From what you have said already, you do not know yet whether there is going to be poundforpound transfer from the Local Government Ombudsman or whether there is any extra funding involved to deal with the transition and upheaval that is inevitably going to take place. Is that right?

Dr Biles: There have been discussions. There will be, we are told, a transfer of a sum of money or an allocation of grant in aid to cover the transfer of jurisdiction. We have made a case for what we think that sum should be; the LGO have made a case for what they think that sum should be; and we are told by DCLG that we are both not going to be happy with the outcome. Other than that, we await with bated breath what the outcome of that is.

Q57 David Heyes: That is to deal with the transition grants for the first year of this new function.

Dr Biles: Yes.

Q58 David Heyes: But from April 2014 it is going to be on a subscription basis.

Dr Biles: I certainly hope so.

Q59 David Heyes: That looks to me like it is going to be a very difficult process for you to negotiate your way through and achieve agreement on. Has any progress been made? Has a start been made on it?

Dr Biles: No. I think it is a statement of intention and I hope that I do not have to do that negotiation. I hope that will be done by the Department.

Q60 David Heyes: Given this uncertainty about your future funding for at least the next two years but maybe beyond that, I think one of the things you say in your evidence is that it is always your aim to respond rapidly should the demand exceed your predictions. Given all this financial uncertainty and, possibly, pessimism in what you have said, how are you going to do that?

Dr Biles: When we say we will have to respond rapidly and be flexible, we have to say, "Here is the business case. This is what it is looking like." If the demand is going down that is a different story. Our assumptions are built on the fact that demand will go up and I think that that is borne out by other people who have given evidence in writing to this Committee. Therefore, what we will be saying is that by responding flexibly you can only do that within the system in which you operate, and that would mean putting together a business case and making an application to the Department for an exemption against the spending freeze so that we can make the necessary recruitment arrangements.

Q61 Chair: What is your forecast for the percentage increase next year? You are saying it has gone up 19% so far this year compared with last year. What is your percentage forecast for next year that you are basing your business case on?

Dr Biles: In terms of inquiries, that is 60%.

Q62 Chair: And that includes the transfer of the local authority activities.

Dr Biles: Yes, that would be as from 2013 onwards.

Q63 Chair: So that is 60% on top of the 19% that has already happened this year.

Dr Biles: Yes.

Q64 Bob Blackman: We have got evidence from the Local Government Ombudsman, from a council in my constituency, and even from the Department registering concern about overlapping responsibilities and transferring of functions and, possibly, cases being looked at by both the Local Government Ombudsman and yourself. How do you see that being clarified?

Dr Biles: The detail of that needs to be worked out between us and the LGO. That is something that, according to our expectation and hope in our transition plan, should be taking place almost immediately in the new year.

Q65 Bob Blackman: Sorry, can I just clarify that? Have you got an agreement with the Local Government Ombudsman about that?

Dr Biles: No, we do not have an agreement.

Q66 Bob Blackman: When will that happen? I think this is going to be very important in the process.

Dr Biles: Absolutely, but we will have an agreement with them. When I say we have not got an agreement, it does not mean to say we do not talk to them. We both know that we have to do this and that we have to hunker down in the new year and get an agreement thrashed out, because there will be circumstances where there will be the likelihood of joint investigations and the statute clearly anticipates that. I think there are some areas where there is uncertainty, for instance around the area of allocation. That mostly, if it is not within what the statute calls "activity by the provider as a provider", will still remain with the LGO.

Q67 Bob Blackman: This would be a complaint from someone who says, "I have not been properly treated. The local authority or the social landlord has not allocated me a suitable property." That is the sort of complaint.

Dr Biles: Yes. That is something we need to talk through with the LGO and we have had some legal advice on this, but as we understand it that would be a matter for the LGO. But what we have to do is to make sure that whoever contacts either of us is seamlessly put through to whatever track is appropriate for that person. If it is a situation where it is what the LGO calls "multifaceted", we need to have arrangements in place for joint investigations. The LGO already have those investigations with the Parliamentary Ombudsman and I hope that we will be able to draw quite quickly on their experience of that, so that we can have the same sort of protocol or memorandum of understanding with them as they have with the Parliamentary Ombudsman.

Q68 Bob Blackman: Have you set a timetable for this? There is a lot here to resolve and I think there is potential confusion. Have you agreed a timetable for decisions?

Dr Biles: I do not think we have agreed one. Being frank with you, I think we need to get the funding sorted and then we will be clear of that baggage and we can start getting around the table and talking about the operational detail.

Q69 Bob Blackman: Harrow Council, not unreasonably, cites an example of antisocial behaviour taking place in which the person who suffers the antisocial behaviour is either a local authority tenant or the tenant of a social landlord but the perpetrator of the antisocial behaviour is not. The tenant then complains and can, quite reasonably, complain that the landlord has not done his or her job, but equally, the council has not done its job in deterring this antisocial behaviour. Who do they complain to, as far as you can see? Do they complain to you or to the Local Government Ombudsman or both? If it is both, do you run a parallel investigation?

Dr Biles: If it is a matter that relates to the LHA in that situation as a provider of housing, it would come to us. I suppose there might be other circumstances in which it might be the LGO’s jurisdiction. But I do not see that one as being quite so difficult, because I think that one would simply be us saying, "Has the landlord complied with its procedures and its policy for dealing with antisocial behaviour?" and we would just run that as we would such a complaint as we have done over the last 15 years.

There are other areas. Allocations is one. I think the LGO have estimated that 50% of their allocation cases will stay with them and the other 50% will come across to us. But then there is the question of whether we are talking about allocations or lettings and this is a piece of work we are doing at the moment in our office to try to get clarity about what is what. There are some definitions of terms that we need to get clarified before we do much else.

Q70 Bob Blackman: The Department, in its submission to us, says that it expects MPs and local councillors to resolve most of these complaints by themselves, which is slightly worrying. Indeed, for both the Local Government Ombudsman and, I think, yourself, but I stand to be corrected, you would expect someone who is complaining to have gone through the complaints process before they get to you. In my experience of local authorities, people give up the will to live by the time they get through the complaints process and are at the end of their tether by the time they get to their MP or their councillors. By the time they get to the Ombudsman Service, well, they have probably ceased to believe they will ever get an outcome. Is that the process that you see being followed in the future?

Dr Biles: Certainly the internal complaints procedure will have to be exhausted, because that is what the statute now says. I think that depends on how we all settle down together and work out what is the best way of dealing with this. Certainly it is the anticipation, if you look at the regulatory impact assessment for the Bill, that those designated persons will try to sort it out. That was Grant Shapps’ vision of what the designated persons were for. But what you would presumably do-and people have already talked about hardpressed MPs, their workload and everything, and the same with councillors-is take a view and think, "I can sort this. I can deal with this quite quickly. I could deal with this by picking up the phone," in which case, presumably, that is what you would do. I have said this before and I am now starting to repeat myself: if you think, "This does look a bit complex and a bit specialised and if I do not have the time or the resource"-you have a team, but others may not; I do not know-then that is the sort of thing when you have the ability to agree with the complainant to refer on to the Ombudsman. It also talks in the statute about the designated person rejecting the complaint, but if it is confirmed in writing, it can come to the Ombudsman and both of those things can happen within the eight weeks. I think that what we all need to do, therefore, is to let this thing settle down and work out pragmatically who is best dealing with what, but seeking to resolve these things locally, if at all possible, because I agree with David Orr that that is preferable, if achievable.

Q71 Chair: Talking about the work with the Local Government Ombudsman, do you think there is a problem that one of you has this designated person who needs to look at the case, but the Local Government Ombudsman does not?

Dr Biles: Yes.

Q72 Chair: The complainant might decide to go to the Local Government Ombudsman because they do not have to go through their MP or councillor. What happens to that case then, if it is decided it is within your remit? Does it get passed to you or does it get passed back to the MP and councillor to go back through the filter?

Dr Biles: That is a very good question and that is something that we need to work out with the LGO, because I think what the Act says is that if I see a case that I think could be jointly investigated, I can agree with a commissioner that it be done in that way. But it could well be that that is exactly what people might do. They might think, "I do not have to go through the designated person, so I will push this through to LGO." In that situation, I would have thought, given the way the statute is framed, that they would have to refer the housing issue to a designated person or they would have to advise the complainant on what their options are, which is to go to a designated person or wait eight weeks. But it is only when it gets to me, as I understand the way the statute is drafted, that I take a view as to whether or not this is something that would profit from joint investigation.

Q73 Chair: Eventually, when you have worked these issues out, is there going to be some nice, simpletounderstand guidance issued for us as well as everybody else?

Dr Biles: I certainly hope so and I look forward to that going straight on to this brand new website.

Q74 Mark Pawsey: Sticking with this shared investigation issue with the Local Government Ombudsman, could you just confirm that this is to take place in April 2013, which is just six months away?

Dr Biles: Yes.

Q75 Mark Pawsey: Are you optimistic of getting everything sorted out and resolved in what is a relatively short space of time?

Dr Biles: Certainly I put great faith in my transition plan, which has its milestones which, so far, in terms of those aspects that are within my control, have all been delivered to target. Clearly, we have to work with the LGO, but I cannot believe, given our historical relationship, that we will not sit down at the appropriate level and thrash this through operationally and get this protocol ahead of time.

Q76 Mark Pawsey: May I just ask you about staffing issues? DCLG, in its impact assessment, expected that between five and 15 staff would transfer from the Local Government Ombudsman to yourself. I gather that means a move from York to London. Have you already spoken to staff about that? Have the costs of that change been factored into the changing arrangements? Is that deliverable?

Dr Biles: The 15 staff are almost like a virtual staff. There is not a plan to move human beings from anywhere to anywhere. What we have done just recently is to advertise posts in the LGO. The job descriptions of the caseworker posts in my organisation that we want to recruit to have been disseminated in the LGO and also across Whitehall, to see if there was any interest, before we then go externally, hopefully, once the exemption has been granted. So there is not a move from York or anywhere to London in that sense of 15 people and, in any event, we are not asking for 15; we are asking for 12, because we believe that our newly reengineered process will achieve the economies of scale that the one we did in 2008 achieved.

Q77 Mark Pawsey: But you are saying that the work that is currently being carried out in York could still be carried out by your staff in York.

Dr Biles: No. Work is not carried out in York; work is carried out in York, in Coventry and in London. They do not have specialist housing people; they have generalist teams, so it is carried out wherever it comes in from and, as you know, each office of LGO deals with different areas of the country. There are not 15 housing people in York.

Q78 Mark Pawsey: Perhaps we misunderstood the advice. But you are generally happy that you will get the resources that you need in 2013.

Dr Biles: We are always very careful that we do not say to complainants, "Are you happy?" I do not think I would describe my state of mind as happy. I hope that good sense prevails and that our business case, which is a strong business case, will be seen for what it is and we will get the exemption pretty quickly to get on with the recruiting.

Q79 James Morris: I just want to come back to this issue of guidance. We have received evidence that councils might be concerned about the extent of the changes. Clearly, there are going to be a lot of changes, so what are your plans to make sure that local authorities are up to speed on these changes before they are implemented?

Dr Biles: Some of those things we are trying to get across to new stakeholders in headline form. I, for instance, have met some chief executives and senior officers of local authorities and so have members of my team. What we want to do in the new year is then go again in terms of an awarenessraising opportunity when we have more detail on the new scheme and what that means for people. I keep coming back to the website, but the website is a really important organ for us in terms of raising awareness and that is where we want to get our main messages up and published.

Q80 James Morris: CLG has said that it will work with you. What is that going to mean in practice in terms of programmes?

Dr Biles: That is a good question. I do not know.

James Morris: Fair enough.

Dr Biles: I hope it means that they will work with me by giving me the exemptions and the resources I need, if I am not flogging that horse rather too much. It is rather important to me at the moment.

Q81 James Morris: So there is nothing else specific that you want from CLG apart from the resources and the ability to do the job. What about the training of landlords? That has been stopped. Can you just say a little bit about why?

Dr Biles: Yes. Essentially, what has been happening with that is it grew over a number of years and it was being run by a very small team of people in my office. When we sat down in 2010 to rethink what our strategy was going to be for the next five years, what we sought to do was to realign our resources strategically so that we could deliver a better product. We think that it would make much more sense if, rather than having a small team-we use the word "siloed"-in the organisation, we do something that is far more integrated into the core process of the business. What we will have is a function within the organisation called "Organisation and Sector Development". There, as you have probably seen from the map of our new process, what we want to do is to capture learning from our process, take that learning out to the sector and then gather learning from the sector and bring that learning back in. I know that Stephen Fry has stolen this from me, but it will work like that, hopefully. Certainly it will be shared learning and that will be what it will look like. Sometimes I describe this as "son of training and prevention". All that valued work we have done we do not want to lose, because it is clearly highly valued by people out there who are stakeholders and I was very pleased to hear what was said about that earlier on. We want to recreate it and make it far more integral to the process, so that you have got that learning that is being shared, specifically through the dispute resolution principles that we have created, but we still have some fleshonthebones work to do with that. Then we want to be able to share that with people like designated persons, providers and residents through whatever the appropriate medium might be. Again, the website is going to play a large part in that.

Q82 James Morris: On the point of the guidance for local authorities in particular, is that your responsibility or is it somebody else’s? Is providing that clarity of guidance your responsibility or is it the Department’s responsibility?

Dr Biles: The guidance on how to deal with a dispute?

James Morris: Guidance around the changes that are coming along.

Dr Biles: I think that guidance around the dispute resolution principles is for me, because that is the role that we have strategically cast for ourselves and it is part of what we might call our offer and it is part of our intention to try to make an impact on the sector and help it in the ways that I have described. The changes to the Localism Act are, technically, the Department’s business, because it is their statute. That is where we will, if that is what that meant earlier on, work with DCLG, or they will work with us. If there are opportunities where we can do joint speaking events or joint publications or whatever, we will certainly want to help with that as far as we can.

Q83 John Stevenson: I have a series of questions on the key issues of accountability and transparency matters. The Ombudsman is not subject to the Freedom of Information Act, although you have said that you will follow its terms voluntarily wherever possible. Do you think you should be subject to the Freedom of Information Act? If not, will you live up to the claim that you are making?

Dr Biles: Ever since the Freedom of Information Act, we have made ourselves subject to it. We do get applications and we do deal with them and I think that "wherever possible" means we always have. I think that it therefore suggests that I do support being within the provisions of the Freedom of Information Act. The only thing I would say about that-it was proposed, I think, last year or during the course of the passage of the Localism Bill-is that my view was, "Yes, let’s do that, but why pick off the Housing Ombudsman? Why not do it properly and do an audit of who else should be within schedule 1? If the Public Sector Ombudsman should be in it, let us do it as a package."

Q84 John Stevenson: You, in principle, would not see a problem with that.

Dr Biles: No, absolutely not, because we have always dealt with those applications as if we were covered by the schedule.

Q85 John Stevenson: Even though, from our information, there has been somebody who did make a Freedom of Information application and they were effectively turned down. One of the things was lack of financial assistance from the Government, which is an indication that you are not necessarily living up to the spirit of what you are saying.

Dr Biles: I do not know about that one, sorry. I am happy to look into it and give you further details, if you like.

Q86 John Stevenson: Moving on, at present there is no duty to lay your annual report before Parliament. Do you think that is something that you should have to do?

Dr Biles: It is laid before Parliament, because we are an NDPB. For the last couple of years it has been laid before Parliament. That is done for me by the DCLG.

Q87 John Stevenson: Not through just yourself.

Dr Biles: It is not me accounting directly to Parliament. If you are thinking of the last recommendation of the Law Commission report, I think that is what it had in mind.

Q88 John Stevenson: Would you, like the Local Government Ombudsman, agree to an external annual review of your operations?

Dr Biles: There are all sorts of ways in which we are reviewed and we are accountable, and I would not see what that would add.

Q89 John Stevenson: Do you not feel that you would at least be on a par with the Local Government Ombudsman in terms of scrutiny?

Dr Biles: I think that in future we will be on a par in the sense that the Housing Ombudsman will be subject to scrutiny by this Committee. I know it already is, but it would be more in keeping with the Housing Ombudsman as a corporation soul in a public body. That, to me, is a proper scrutiny externally of what is going on. Otherwise you then get an ombudsman for the ombudsman and an ombudsman for that ombudsman, and the whole point of an ombudsman is that you have finality, otherwise you just go on forever.

Q90 John Stevenson: It is having consistency across the various ombudsmen; it is also transparency and accountability.

Dr Biles: I am not saying I am against that in any way. I am in favour of that, but I think that there are already mechanisms so that that happens.

Q91 John Stevenson: Finally, do you think there should be a right of appeal against decisions? You have judicial review, but do you think there should be a right of appeal?

Dr Biles: No. One of the traditional, conventional advantages of an ombudsman is that he or she does bring finality to a grievance, complaint or dispute. If you are looking for an appeal, perhaps the case should have gone to a court.

Q92 Chair: You are clearly concentrating on improving process in the organisation. In terms of cost, you talked about the Local Government Ombudsman having offices in York and Coventry. Presumably, the overheads of those offices are somewhat lower than your accommodation in London. Have you thought about devolving any of your operations out of London?

Dr Biles: I do not know what their overheads are, so I do not know that one, but yes, a few years ago, before we moved to where we are, we did think about moving the office and the view was taken that if we did that, the risk was that only I would go, in which case you have to recruit a whole new lot of staff, train them up and start from at least a zero point. The view was taken, in discussion with the board, that that risk was not worth taking and that we would stay and keep the cadre of people that we had trained and brought with us.

Q93 Chair: Civil Service operations have moved pretty successfully out of London and kept many of the staff with them as they have moved.

Dr Biles: We do not have a lease for ever where we are and all those considerations will come up again within five years.

Q94 Chair: In five years. So that would be looked at again.

Dr Biles: Absolutely. I think it will be looked at again on the basis of an options appraisal and a risk analysis.

Q95 Chair: Two other aspects of the operation. Outsourcing telephone enquiries: is that costeffective in the current climate? Does it work?

Dr Biles: Yes.

Q96 Chair: You do not get complaints from people about how they are handled by an outsourced service.

Dr Biles: No, I have not heard that we do.

Q97 Chair: And that reduces costs, does it?

Dr Biles: Yes.

Q98 Chair: On the other hand, you spend quite a lot on consultancies as well; I think there was a 22% increase last year in the amount spent. Why is it necessary to employ consultants?

Dr Biles: Because we have got only a certain number of people in the office, most of whom are caseworkers or are giving us resource backup. We do not have specialists and it would not be costeffective for us to have specialists in things like transformation of HR or recruitment-or, indeed, if we are going to put them in this category, our lawyers and our accountants. We are not big enough to have departments or specialists providing those services.

Q99 Chair: And CLG cannot help with that and you have to go outside for external consultants. Is there no way CLG could provide them?

Dr Biles: We have tried to see where we might use expertise within CLG, but up to now it has not been able to help.

Q100 Chair: So you have asked them and basically they have not been able to respond.

Dr Biles: Yes. Well, they have responded, but they have not been able to help.

Q101 Chair: Is there anything you would like to add that you do not think we have covered that you would like us to be aware of?

Dr Biles: I have the opportunity in front of some of my new stakeholders as designated persons; many of you were also councillors and some of you are vicepresidents of the LGA. If, in any of your activities, you come across anybody who might like to engage with us in dialogue as to how we might move forward in the future to make the local resolution of disputes work best, please refer me on to them. I would be delighted to talk to anybody who would be willing to engage in that agenda.

Chair: Dr Biles, thank you very much for coming this afternoon and for spelling out so clearly both the successes you have had, and also the challenges that you are going to face, certainly in the next 12 months. Thank you very much.

Dr Biles: Thank you.

Prepared 15th November 2012