Decision making and appeals in the benefits system - Work & Pensions publish 2nd report session 2009-10 9th Feb 2010
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The amount of benefits overpaid due to errors by officials has doubled from £400m to £800m since 2000, say MPs.
Their report said that the figure was "far too high" and pointed out that underpayments due to officials' mistakes had also risen.
Overpayments due to fraud and mistakes by claimants fell in the same period.
The government said the recession meant more money was being paid out in benefits and the error rate was actually at its lowest since 2002-2003.
The report by the work and pensions select committee notes that the vast majority of decisions the department makes "are accepted by claimants and lead to the right benefits being paid on time to those who are eligible".
'Error champions'
But it points out that while official figures out in November showed overpayments due to fraud were down, that "masked" the number which had risen, due to officials' mistakes.
"Although the department has made great strides in reducing fraud, this increase in error should be a cause for concern," the committee said.
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 Poor decision-making not only costs the department in wasted over-payments but also generates more costs further down the line in reconsiderations and appeals  Terry Rooney
Committee chairman |
It notes that in 2000-2001, £400m was overpaid due to official error. By 2008-2009 that had increased to £800m.
The amount of benefits being underpaid - due to mistakes by both staff and claimants - also increased from £800m in 2004-2005 to £1.2bn last year.
The report says "error champions" have been appointed at Jobcentre Plus and two sets of accuracy checks brought in at the pension, disability and carers service.
But it adds that the "cost of official error due to overpayments of benefits is still far too high" and had "risen significantly since 2000-1".
Committee chairman, the Labour MP Terry Rooney, said: "Poor decision-making not only costs the department in wasted over-payments but also generates more costs further down the line in reconsiderations and appeals.
"An increased focus on the quality of decision making to match the department's successful focus on fraud could have a very significant effect in reducing the cost to the Tribunals Service of hearings on benefit appeals."
'Absolutely determined'
But a spokesman for the DWP said more money was being paid out because of the recession and the rate of official errors - at 0.6% - was the lowest since 2002-3.
He said: "The vast majority of benefits are paid correctly to those who are entitled to them, but we are absolutely determined to fight both fraud and error in the benefits system.
"Official error overpayments are at their lowest level since 2002/2003 and this is in spite of a background of significantly increased workload during the economic downturn."
The committee urged the government to look at simplifying the benefits system to make it more understandable for claimants and staff.
It called for a "welfare commission" to be established to examine the existing system and look at "possible alternative structures".
http://news.bbc.co.uk/1/hi/uk_politics/8505325.stm
Nine peers have been cleared by House of Lords authorities over allegations made regarding their expenses claims.
Most involved a £174 overnight allowance for peers whose main homes were outside London but were accused of rarely visiting their "main" homes.
But Lords authorities accepted that each had spent enough time there to qualify for the allowance.
Meanwhile Labour peer Lord Clarke will be investigated by Lords authorities over his expenses.
His claims have also been investigated by the Metropolitan Police who on Friday said there was "insufficient evidence to provide a realistic prospect of conviction".
Overnight allowance
On Tuesday Clerk of the Parliaments Michael Pownall said he had referred Lord Clarke's case to the Lords sub-committee on lords' interests and regarded it as "complex and serious".
The peers cleared by the Lords authorities are: Baroness Barker, Lord Colwyn, Lord Hayworth, Baroness Hayman, Baroness Morgan of Drefelin, Lord Morris of Manchester, Baroness Northover, Baroness Thornton and Baroness Whitaker.
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It is not for me retrospectively to devise rules for the current scheme which have not been in place to date Michael Pownall
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Most of the cases involved the use of the £174-a-night allowance to enable peers whose main homes are not in London to stay near Parliament.
It followed stories in the Sunday Times suggesting that peers had designated little-used properties outside London as their "main" home in order to claim the overnight allowance.
In his letter, Mr Pownall notes that he is there to check claims were made in accordance with the rules - not "retrospectively to devise rules for the current scheme which have not been in place to date".
He said there was no clear definition about what constituted a main home in the current scheme - so he had asked a Lords committee which rules on peers' allowance to come up with some "essential criteria".
It had decided that a minimum threshold for visits to a property designated as a "main" home for expenses purposes should be "at least once a month" when Parliament is sitting. Time spent there during recess was "also a relevant factor".
Some peers were accused of designating properties owned by relatives - including their mothers - as their main home.
Lord Rennard
But Mr Pownall, the most senior administrator in the House of Lords, said that was "appropriate" in some cases where peers had a connection to the property and paid towards its running costs. "Main" homes could also be rented in some circumstances, he said.
He also dismissed complaints against former Lib Dem chief executive Lord Rennard and attorney general Baroness Scotland.
He said allegations that Lord Rennard had claimed for overnight stays on days he was not at Parliament were not "well founded", arguing that just because the peer had not spoken or voted on those dates did not mean he was not there.
"These statistics do not necessarily reflect the wider contribution which a member makes to the work of the House," he said.
He also dismissed suggestions Lord Rennard had mis-designated his "main" home.
In Baroness Scotland's case, Mr Pownall said he had not considered the complaint because she was a minister "throughout the period for which we hold records and so not entitled to claim" under the reimbursement scheme.
Under reforms proposed by the independent Senior Salaries Review Body the old allowances system for peers would be replaced.
It favours a £200-a-day attendance allowance for peers, who are not salaried, but says they should have to prove they have been at Parliament.
The plans were criticised by some peers who agreed to back the reforms in principle, but not the detail in a vote in December.
http://news.bbc.co.uk/1/hi/uk_politics/8505920.stm
9 February 2010
MPs call for the establishment of a 'Welfare Commission' to create a fairer and simpler benefits system that claimants can understand and the Department of Work and Pensions (DWP) can administer more accurately.
Report: Decision Making and Appeals in the Benefits System (PDF)
Work and Pensions Committee
The Work and Pensions Select Committee today releases its report, 'Decision making and appeals in the benefits system'.
The Report concludes that the vast majority of decisions DWP makes are accepted by claimants and lead to the right benefits being paid on time to those who are eligible. However, whilst the 1998 reforms can be measured as successful in as far as the Department has met all but one of its targets for payment accuracy and clearance rates, the Report notes that the level of official error in the benefits system has increased substantially since 2000–01.
The level of overpayments due to official error have risen from £0.4 billion (0.4 per cent of benefits paid) to £0.8 billion (0.6 per cent of benefits paid) over this period. Although the Department has made great strides in reducing fraud, this increase in error should be a cause for concern, the Report says.
It also highlights a worrying lack of response to scrutiny of the decision making and appeals (DMA) system by DWP. The Report calls for the establishment of a Welfare Commission to create a system which claimants are able to understand more easily and DWP staff are able to administer more accurately.
Terry Rooney MP, Chairman of the Committee, said
"Poor decision making not only costs the Department in wasted over-payments, and costs claimants in under-payments, but also generates more costs further down the line in reconsiderations and appeals.
"An increased focus on the quality of decision making to match the Department’s successful focus on fraud could have a very significant effect in reducing the cost to the Tribunals Service of hearings on benefit appeals.
"We do not underestimate the difficulty of the task facing decision makers across DWP’s businesses. The complex rules that govern the social security system increase the scope for both customer and official error and the challenge of decision making accuracy.
"We have previously recommended that DWP establish a body to examine complexity in the benefits system. Today we reiterate this recommendation: that the Government establish a Welfare Commission to examine the existing benefits system and model possible alternative structures with the aim of creating a fair but simpler system, which claimants and their representatives are able to understand more easily and DWP staff are able to administer more accurately."
Scrutiny
The 1998 Act introduced monitoring arrangements to ensure that the DMA system was operating effectively. However, during the course of its inquiry the Committee discovered that, contrary to undertakings given during the passage of the Act, the Secretary of State has not produced an annual report on decision making since 2006.
Members were particularly concerned by evidence from former President of the Appeal Tribunals, Judge Robert Martin, who felt his reports were effectively ignored, as well as evidence that the Standards Committee lacks influence. Today’s Report calls for a much more constructive response to such scrutiny.
Terry Rooney said:
"We are particularly concerned that the Department doesn’t appear to take scrutiny of the decision making and appeals system seriously enough. If it is to improve on its performance in respect of official error, it must listen and respond to criticism."
Jobcentre Plus
The Report highlights a lack of data on claim clearance rates, payment accuracy and the reconsideration process for Jobcentre Plus benefits. This paucity of data led the Committee to conclude that DWP is not adequately assessing decision making in Jobcentre Plus, making it difficult for the Department to identify ways to improve the DMA system.
Terry Rooney said:
"We were particularly alarmed at the lack of data available to assess decision making at Jobcentre Plus and call on the Department to both explain this and start collecting and publishing such data as a matter of urgency. We hope that, once these statistics are available, our successor Committee will be able to re-visit this issue."
The Reconsideration Process
The Report also notes that one important element of the 1998 reforms that does not appear to be working as intended is the reconsideration process. This process should enable decision makers to take account of new evidence submitted by claimants and provide for a means of reviewing decisions to provide claimants with a quick resolution, relieving some of the burden on tribunals.
The Committee is concerned that the way the process is currently operating represents a missed opportunity. In particular, evidence the Committee received suggested that DWP computer-generated letters do not clearly explain the specifics of decisions, which means that some claimants were unable to understand why their claim had been rejected. The Report calls for greater efforts to explain the rationale behind decisions, which could reduce the numbers of appeals that are lodged.
Terry Rooney said:
"Many claimants will be deterred from an appeal by an unsuccessful request for a reconsideration. Our greatest concern is that, if this reconsideration is not being conducted thoroughly, they may miss out on benefits to which they should be entitled.
"The reconsideration process should be a way of reviewing decisions which provides a swift, understandable resolution for claimants and also reduces the caseload of the tribunals. Something as simple as better communication to explain decisions could go a long way to help."