PHSO Annual Scrutiny 2016–17 Contents

2Future strategy

The challenge

7.Mr Behrens defined the challenge the PHSO faces in a public lecture on 7 December 2017 as:

The Parliamentary and Health Service Ombudsman (PHSO) needs transformation, and indeed, irrespective of legislative change it is being transformed to become a more outward-facing, transparent organisation, closer to the communities it serves, without surrendering an iota of its independence. A key challenge is to restore user and stakeholder trust and this will not be easy.9

8.The loss of stakeholder trust is clear from the reports produced by the Patients’ Association between 2014 and 2016, entitled respectively, PHSO - The People’s Ombudsman - How it failed us (November 2014); and PHSO - Labyrinth of Bureaucracy (March 2015) as well as their later Follow up Report (December 2016).10 In evidence to the Committee in January 2016, based on calls to their helpline, the Association described, “the heavy toll” it felt the PHSO investigation process put on complainants and that families were left “distressed, exhausted and distraught by the failings of the body to carry out their public function in an efficient, effective and caring manner.”11

9.The PHSO has faced more than a loss of trust from complainants. As described below its performance in delivering timely decisions has been, in its own judgement, “simply unacceptable”.12 The last Ombudsman and her deputy resigned in 2016 as a result of serious governance failings in the appointment of the Deputy Ombudsman.13 In 2014–15 the PHSO’s annual accounts were qualified by the National Audit Office owing to failings in its financial monitoring.14 The 2015–16 accounts were published late to allow further assurance work to be carried out, and highlighted concerns about a failure to implement internal audit recommendations.15

The Ombudsman’s draft strategic plan

10.Against this context the new Ombudsman published a draft strategic plan for consultation on 6 November 2017 to cover the three years from April 2018 to March 2021.16 It set out three objectives and the change that will underpin them. The objectives are:

11.The final version of the strategy, published on 16 April 2018, amended Objective 1 to “improve the quality of our service, while remaining independent, impartial and fair” and Objective 3 to “work in partnership to improve public, services, especially frontline complaint handling”.18

12.Mr Behrens described the draft plan as “modest” and “realistic”, and would allow the Committee to measure the PHSO’s progress “year by year”.19 This contrasted with the PHSO’s past tendency to, “make statements about what it is going to do without having them properly supported, both in terms of consultation or the capacity internally to deliver the changes”.20 On the other hand, Amanda Campbell suggested that “a lot of the activity we have set out in the strategy is very ambitious”, particularly in the context of the spending reductions that the PHSO must make.21

13.Its settlement in the 2015 Spending Review requires the PHSO to make a 24% real terms reduction in its spending by the end of 2018–19.22 However, the PHSO negotiated a funding profile that allowed it to defer making significant reductions in spending until 2017–18, effectively requiring it to deliver the whole 24% reduction over 2017–18 and 2018–19.23

14.This was on the assumption that the then Ombudsman’s five-year strategic plan for transforming the PHSO introduced in 2013 would, by 2017, have implemented a new operating model that would then allow the PHSO to make significant efficiencies.24 The new strategy also reflected the decision to radically increase the number of investigations the PHSO took on, from 467 investigations in 2012–13 to 3,900 the following year.25

15.However, in the judgement of the current Ombudsman his predecessor’s strategy had “not delivered what it intended to deliver”.26 There were significant backlogs within the system, with cases taking an average of 234 days to complete in 2016–17.27 There remained a need to make the PHSO’s case-handling “more professional” including introducing a new-case handling model, improve training for staff, and to reconnect with stakeholders.28 The PHSO is also in the process of re-organising its structures and relocating functions from London to Manchester in order to reduce costs.29

16.Amanda Campbell stressed that this amounts to “a lot of change all at the same time with a budget that is reducing significantly”, and would result in the PHSO’s performance on investigating cases in a timely way falling in the current year, but that it would improve again after that.30

17.Mr Behrens told us that he would, “not be backward in coming forward arguing for resource in the spending rounds to come” but accepted that it would have to, “be on the basis that we have addressed the inefficiencies inside the organisation to make sure that people can be confident that if we do get a more generous allocation we will spend it wisely”.31 It is currently unclear what systems the Ombudsman intends to put in place to provide this assurance, despite the 2015 Health Committee recommendation that, “an external audit mechanism be established to benchmark and assure the quality of Ombudsman investigations.”32 The National Audit Office (NAO), the PHSO’s external auditors, only provides a financial audit which does not examine the value for money of the PHSO’s spending or assure the quality of its case handling. The Corporation Sole model prescribed in the PHSO’s underpinning legislation also prevents the formal establishment of a non-executive board to oversee the work of the PHSO and Ombudsman.33 This is addressed in paragraph 21 of this report.

18.We welcome the Ombudsman’s commitment to consulting widely on his new strategic plan, and the recognition of the need for it to focus on improving its core functions and reconnecting with its stakeholders. The Committee recognises the challenges the new Ombudsman faces in making the reforms he has identified and delivering the savings he is required to make. We note that even the “modest” draft objectives were described as “very ambitious” to deliver by his Chief Executive; and welcome her honesty that delivering long-term improvements may require some short-term increase in the time PHSO takes to complete cases.34

19.We will hold the Ombudsman to account for delivering the objectives he is setting and that he has assured us will be deliverable given the resources he has. We also expect the PHSO to continue to be transparent and candid about the impact the change programme is having on its performance, and willing to adjust its strategy if necessary. We will judge the PHSO on the impact it has on public services, the value for money it provides, and the confidence it inspires in complainants, other stakeholders and the public.

20.The Committee is in no doubt about the financial challenge that the PHSO faces. However, we also agree with the Ombudsman that before the PHSO can make the case for more funding, it will need to demonstrate that it is spending its current funding well. Given its past problems an external audit mechanism is required that will provide robust assurance of the value for money of the PHSO’s operations to its Board, the Committee and the public. We recommend that the Ombudsman asks his non-executive directors to commission this, and report back to us.

Future Public Service Ombudsman

21.One complication in the PHSO’s future planning is the proposed merger of it with the Local Government and Social Care Ombudsman (LGO), in-line with our predecessor Committee’s recommendation.35 The Government published a draft Bill in 2016, but has yet to indicate when it might introduce the Bill to Parliament.36 The Bill contains several important reforms. It would reflect the reality of the increasing blurring of lines between health and social care as experienced by individuals. It would update the PHSO’s antiquated institutional structures and procedures, which are prescribed by the current legislation. This includes replacing the present Corporation Sole with a proper public body governed by an independently appointed non-executive board to provide for proper internal governance and oversight of the Ombudsman. The PHSO currently has a board that includes eight non-executive directors, but they are appointed by the Ombudsman.37

22.The draft Bill also provides for open public access to the new Ombudsman service, in line with other modern ombudsman services, by removing the ‘MP filter’ on complaints about Government Departments.38

23.The new draft Public Service Ombudsman Bill is awaiting pre-legislative scrutiny. We are clear that it is a vehicle for implementing several of our predecessor Committee’s recommendations that are needed to bring the governance and operations of the Ombudsman into the twenty-first century. We have no doubts about the quality of the individuals who act as non-executive directors of the PHSO, but the Corporation Sole model is no longer fit for purpose. Notwithstanding the Bill’s content, the continuing uncertainty has an adverse impact on the PHSO, and the Local Government and Social Care Ombudsman (LGO). Together, their ability to plan is being impeded and this risks wasting public money. We, therefore, expect the Government to provide clarity about its intentions for pre-legislative scrutiny of the Bill, and about the timetable to implement this new legislation to allow the PHSO and LGO to plan with some confidence.

24.We recommend that the Government should invite the House of Lords to join the House of Commons in setting up a joint committee to conduct the pre-legislative scrutiny of the draft Public Service Ombudsman Bill as soon as possible. In its response to this report, the Government should provide the PHSO and LGO a date by which it intends to have the new legislation in place to allow them to plan with some confidence.

Staff engagement

25.The PHSO’s Annual Report for 2016–17 stated that, “we can only achieve success if we have the commitment and buy-in of our most important resource; the people who work for us.”39 The new strategic plan makes clear that the leadership of the PHSO see their staff as their “single most important resource”.40 Central to delivering their new strategy is the development and implementation of accredited professional training for their case handlers.41

26.However, Amanda Campbell reported that within the 2016 staff survey, completed before she took up her role, “there were some really poor results. Some were lower than I had seen anywhere in my 30 years in public service and some were very specifically directed at the leadership of the organisation.”42 She explained that the senior leadership at the PHSO had invested heavily in improving staff perceptions of the management of the organisations and as a result, “the score has gone from 19% last year to 64% this year with regard to visible leadership. That is because of a lot of effort from leaders across the organisation, but it is still a work in progress. 64% is still not high enough, as far as I am concerned.”43 Overall employee engagement had risen from 52% to 60% in 2017, only one percentage point below the Civil Service benchmark.44

27.Both Rob Behrens and Amanda Campbell touched on the challenges individual staff members can face in their interactions with, often distressed, members of the public,45 and in dealing with casework that is potentially distressing for the investigators.46 Ms Campbell highlighted that the PHSO was implementing training and support for staff members to help them manage the “vicarious trauma” staff may experience as a result of their work in response.47

28.We recognise that the staff of the PHSO are central to its success. They are asked to do a difficult job, and the last few years has been a period of significant and ongoing uncertainty owing both to the organisation’s restructuring and the unexpected turnover in senior leadership. We welcome the improvement in staff engagement, but we agree with Amanda Campbell that more needs to be done.

29.We also welcome the enhanced support to PHSO staff to manage “vicarious trauma”. The wellbeing of PHSO staff is important in and of itself. However, given the nature of their work it is also vital for their ability to deal supportively and empathetically with complainants. We also strongly support the PHSO’s wider plans, set out in their new strategic plan, to invest in training their staff and to developing professional accreditation for case handlers.

9 Rob Behrens, “Looking Back to Look Forward: Celebrating 50 years of the Parliamentary and Health Service Ombudsman and a glimpse into the future”, LSE Annual Ombudsman’s Lecture, 4 December 2017

10 Summarised in Karen Murphy, Chief Executive of the Patients’ Association, evidence to the Committee’s annual scrutiny of PHSO in Jan 2016 (PAR 47) and The Patients Association, “Follow-up report to the March 2015 Patients Association publication on the Parliamentary and Health Service Ombudsman”, December 2016.

11 PAR 47

12 Q37

13 Alex Alan “Report of a Review into Issues Concerning the PHSO” 13 September 2016

14 Parliamentary and Health Service Ombudsman “The Ombudsman’s Annual Report and Accounts 2014–15” HC (2015–16) 570, 9 November 2015, pp 93–94

15 PACAC Oral Evidence “Public and Health Service Ombudsman Annual Scrutiny 2016” HC 809 2016–17, Q 18–24

17 PHS 49, Annex

18 Parliamentary and Health Service Ombudsman, “Our Strategy 2018–21: Delivering an exemplary ombudsman service” 16 April 2018.

19 Q11

20 Q10

21 Q16

23 ibid

24 ibid

25 PHSO Annual report 2016–16, p 9

26 Q12

27 PHS49

28 Q9

29 Q12

30 Q12

31 Q20

32 Health Select Committee, Fourth Report of Session 2014–15 “Complaints and Raising Concerns” HC 350, 21 January 2015, para 91.

33 Public Administration Select Committee, Fourteenth Report of Session 2013–14, “Time for a People’s Ombudsman Service”, HC 655, 24 April 2014.

34 Q13

35 Public Administration Select Committee, Fourteenth Report of Session 2013–14, “Time for a People’s Ombudsman Service”, HC 655, 24 April 2014. Paras 35–44

36 Cabinet Office, “Draft Public Service Ombudsman Bill” CM 9374, December 2016

37 PHSO “Members of the Board” & PHSO “The Board” both accessed 28/03/2018

38 Cabinet Office “Draft Public Service Ombudsman Bill”

39 PHSO Annual Report 2016–17, p 25.

40 PHSO “Our Strategy 2018–21” p 5

41 Ibid & Q9

42 Q83

43 Q84

44 Q83

45 Q36 & Q54

46 Q55

47 Q55

24 April 2018