By Robert Thomas (University of Manchester)
Are the DWP’s reasons for rejecting the PHSO’s recommendations adequate and cogent?
Following Part I, we now consider whether or not the DWP has provided adequate cogent reasons for not accepting the PHSO’s recommendations. It is necessary to be cautious in this respect. The DWP has presented its considered response to the PHSO’s report which has drawn upon its accumulated expertise and understanding of its special payment scheme and its responsibilities. Nonetheless, it is also necessary that the department’s justifications for not adopting the PHSO’s recommendations be subjected to close scrutiny. This is an especially important task given the importance of the matter for the many other people affected by flawed migration to ESA and in light of the dual role of the PHSO in providing redress for people affected by maladministration and in assisting and enabling Parliament to hold the Government to account. The central issue is then this: are the DWP’s reasons for not accepting the PHSO’s recommendations adequate and cogent?
A key assumption of the DWP’s response is that it is not for the department proactively to introduce and operate a system for financial compensation on behalf of affected claimants; instead, it is for claimants to contact the department, which will then consider their complaints accordingly. In other words, the department has preferred to adopt a reactive rather than a proactive approach. It will consider complaints made to it; but it will not, of its own initiative, consider whether or not people qualify for financial payments and, if so, how much.
It is certainly the case that affected people can contact the DWP. However, it is at this point that we encounter a common and pervasive behavioural feature of administrative justice in practice. In general terms, people can challenge government decisions and actions, but they often do not so. They often lack the confidence, advice and stamina to do so. They may lack the knowledge about how to complain. They may often feel that the ‘system’ is stacked against them and that pursuing a complaint or an appeal would likely not lead to anything. It is well-known and a generally accepted feature of administrative justice in action that many people do not challenge government – even when they might well have a good case.
As regards ESA claimants, additional factors come into play. By definition, this is a vulnerable group of people. An important feature of Mrs U’s case was that she had the assistance of a welfare rights adviser. These advisers perform an excellent work in helping people. However, they have had their funding reduced. Many welfare rights units no longer help people with complaints against the DWP because they lack the resources and capacity to do this type of work.
In this context, government bodies can then adopt the appearance of acting fairly – ‘if people are dissatisfied, then they can complain’ – while also knowing that few people will actually do so. In this way, government departments and public bodies consciously rely upon people not challenging government. Government puts the onus on affected individuals to take proactive action to complain or appeal, while knowing that, in practice, only a relatively small number of people will actually complain or appeal.
This is the general position of people faced with an administrative justice problem. But what distinguishes the position of people like Mrs U? The difference as regards this category of people is that there were not challenging an initial decision. Instead, they had been in receipt of disability benefits and had been wrongly converted by the DWP to ESA. In this respect, it seems quite wrong and inappropriate for the burden to be placed upon them to secure redress under the DWP’s special payment scheme. These people had done nothing wrong. Instead, they trusted the DWP to convert them correctly and to pay them the right benefits. Indeed, they had no choice in the matter; it was for the DWP to introduce a correct migration process.
But, the DWP did not do this. The flawed migration scheme meant that these people were significantly underpaid for many years. Consequently, some, if not many, of this cohort would have suffered similar or other difficulties as Mrs U did; each case will turn on its own individual facts. It is therefore seems to be an elementary feature of justice that, because it caused the problem, the DWP should then adopt a proactive approach to consider each individual case in order to decide whether such people are entitled to financial payments for the consequences they suffered.
There is a problem with relying on people to make claims for compensation. These people have waited for years. Requiring upon them to make claims and then, if refused, to go through the usual redress onward procedures would only add further time and delay. If someone affected made a compensation claim to the DWP, it could be delayed; the DWP does not calculate the average amount of time to deal with complaints, but it is known anecdotally that the length of time taken can be many months. If someone is refused, then they would have to escalate it to the Independent Case Examiner, resulting in further delay. If refused again, the next stage would be to go to the PHSO, assuming that the complaint was referred there by an MP. Going through this process takes years and would test the patience and perseverance of the most committed person. To require people who, through no fault of their own, who have suffered injustice because of the DWP’s flawed migration of their disability claims, is wholly unjust and thoroughly unreasonable.
It is relevant to recall that Mrs U’s complaint for compensation was initially considered and refused by the DWP. She then escalated her case to the PHSO, which found in her favour. What is not known is: (a) how many other similarly placed people have not complained to the DWP; (b) how many other similarly placed people did complain to the DWP, had their claims for compensation refused – because of its blanket policy – but did not then escalate their case to the PHSO. No-one knows this information – including, probably, the DWP itself.
The DWP does not even know the outcome of complaints handled by its own complaints staff. It does not collect this data. Nor does it collect data concerning the specific categories of complaints. It seems reasonable to suppose that some claimants may be in position (b): they lodged complaints with the DWP for compensation, were refused, and have not then pursued the matter to the PHSO. It is important to recall that there is no direct access to the PHSO because of the MP filter. This is because of the anachronistic legislation that established the then Parliamentary Commissioner for Administration in 1967. The requirement for people to have their complaints against central government approved and filtered by their constituency, or another, MP is now entirely outdated. However, the majority of people affected are likely to be in position (a); they have not complained to the DWP at all. Nor is it likely that they will do so – for the reasons highlighted above.
What then of the DWP’s view that establishing a special payment or compensation scheme for ESA claimants would be contrary to government guidance? For a start, the DWP’s own guidance on financial redress recognises that ‘special exercises are set up to identify customers affected by a particular error and provide a remedy’. The circumstances that might justify such an exercise include ‘a systemic failure which affects a number of similar cases’. The flawed migration of claimants clearly falls within this definition. Indeed, it seems difficult to envisage how it could be described as anything other than ‘a systemic failure which affects a number of similar cases’.
What then of Managing Public Money? This long-standing document is ‘owned’ by HM Treasury and has the status of something approaching law within government. This document states that ‘when public sector organisations have caused injustice or hardship because of maladministration or service failure, they should consider providing remedies so that, as far as reasonably possible, they restore the wronged party to the position that they would be in had things been done correctly’. The document also states that departments should consult the Treasury about cases which: fall outside their delegated authorities; raise novel or contentious issues; or could set a potentially expensive precedent or cause repercussions for other public sector organisations. However, nothing in Managing Public Money states that government departments, must not, in the DWP’s words, ‘must not create precedents that put the taxpayer at risk and should not apply a blanket decision that applies to all cases’. Instead, the document reiterates the point that if there is a risk of precedent, then the Treasury must be consulted.
The possibility arises then the DWP has prejudged the Treasury point of view, and rejected such a scheme before or instead of consulting with the Treasury. If so, then why would the DWP have done this? The answer is simply that the DWP’s relationship with the Treasury covers many different issues and levels. There will be lots going on behind the scenes. But in general terms, the DWP has been under intense pressure from the Treasury and especially so since austerity policies were introduced in 2010. Accordingly, it would not be surprising if senior DWP officials had become entirely accustomed to second-guessing the Treasury point of view.
There is an alternative possibility. The DWP consulted the Treasury about a compensation scheme, which rejected it sternly and then passed back to the DWP the task of explaining and justifying it. But we do not know for certain because this is all, in a phrase, ‘the private government of public money’.
The financial concerns are legitimate. Government resources are limited. These concerns are two-fold. First, the costs of paying out compensation. It does not want to pay compensation because of the financial costs involved. Second, there are the administrative costs of considering individuals’ circumstances to determine whether or not they are entitled to compensatory payments. These administrative costs include the time, money and paperwork involved, which would have to be borne by the department. From the DWP’s perspective, all of these additional payments and work by themselves provide a good reason for inaction.
However, these concerns must be weighed against the avoidable and unnecessary injustice caused to the over 118,000 people caused potentially devastating injustice. The principal justification for the DWP adopting a proactive approach is then that its error caused the situation in the first place. Its flawed process for migrating disability benefit claimants to ESA is the underlying cause.
As the PHSO’s ‘Principles for Remedy’ state, there is a balance to be struck between responding appropriately to people’s complaints and acting proportionately within available resources. However, at the same time, ‘finite resources should not be used as an excuse for failing to provide a fair remedy’. It is unfair and unreasonable for people who have suffered harm and injustice as a result of government maladministration to bear the cost of that injustice. The argument that people cannot be compensated because resources are finite could, taken to the extreme, be used to rule out all forms of compensation.
Further, if the DWP did not want to bear these costs, then it should have done its utmost in the first place to prevent the flawed migration of claims to ESA. If this process had been more effectively managed, then the whole problem would not have arisen. But it did happen and it was the DWP that was responsible for it. The migration was flawed because junior officials to whom the department have delegated responsibility for designing the conversion process had not sought legal advice to ensure that the process complied with the department’s own regulations. External stakeholders – including welfare rights bodies – had warned the DWP about the error. However, it had failed to listen to or act upon these concerns. The PAC concluded that the DWP’s inertia in dealing with ESA payments had been compounded by a lack of willingness to listen to experts and stakeholders.
This type of behaviour by the DWP is verging upon administrative negligence. To then refuse to adopt a proactive approach by compensating those affected compounds and exacerbates matters. It confirms the suspicion that the DWP does not sufficiently care about people. Instead, it is refusing to assist vulnerable people that it has already significantly let down and who have already waited many years for their benefits and suffered as a result of the DWP’s failures.
In light of this, it is not possible to conclude that the DWP’s reasons for rejecting the PHSO’s recommendations are either adequate or cogent. On the contrary, those reasons are unsustainable.
A number of wider issues emanate from this episode, but only two will be considered here. The first concerns the dissonance between the principles of good administration and the actual behaviours of government. For instance, it does not appear that the submission to ministers written by civil servants contained any reference to the PHSO’s principles of good administration. Those principles are not legal binding. Nonetheless, they provide important standards and norms to which government should accept and follow. Why? Because the basic purpose of government is to serve and meet the needs of the public. People’s lives are hugely affected – for good or ill – by the quality of government and how effectively it provides public services. In the case of the DWP, this somewhat understates the matter. Many people who are disabled or on low incomes are entirely reliant and dependent upon the DWP and the effectiveness of its administration for their lives and well-being. There is no alternative benefit system to which they can move to if they wish.
Accordingly, public bodies should follow and apply the principles of good administration. No-one supposes that this is a simple or easy endeavour. Moreover, it is not cost-free. However, it is precisely because people rely upon government and that their lives can be improved or harmed by government that the principles of good administration are important and should be taken into account and followed by government departments and public bodies.
The second issue concerns why government departments, like the DWP, behave in the way they do. What explains the department’s deep-seated aversion to consider paying financial compensation to the people who had likely suffered from its own maladministration? And what explains the reasons and arguments it has given for rejecting the PHSO’s recommendations? To seek an explanation, we need to penetrate beneath the surface of things and highlight the underlying attitudes and mindset of senior officials and Ministers within the department.
The DWP is the UK’s highest spending government department. As noted above, it is quite apparent that the department has a difficult relationship with the Treasury, a relationship that has become particularly fraught since 2010. It is only possible to understand the DWP’s response from this perspective.
In this context, the DWP’s use of language – in particular its stress upon ‘not creating precedents that put the taxpayer at risk’ – is both instructive and suggestive. It implies a mindset or attitude of mind that is quite common within many institutions. If we unpack some of the implications, then we might be in a better position from which to understand the DWP’s rejection of the PHSO’s recommendations.
Consider that phrase ‘not creating precedents’. The need, whether real or perceived, to avoid establishing precedents was eloquently summarised by F.M. Cornford, a classics scholar, in 1908 in his short work Microcosmographia Academia. Cornford was writing about the behaviour of academics in the ancient universities during the Edwardian period. He was advising the naïve young academic politician about how to overcome the inertia and vested interests within universities that favoured maintaining the status quo: ‘You think (do you not?) that you have only to state a reasonable case, and people must listen to reason and act upon it at once. It is just this conviction that makes you so unpleasant. There is little hope of dissuading you’.
The principles articulated by Cornford are timeless and universal. As Cornford explained, ‘since the stone-axe fell into disuse at the close of the neolithic age, two … arguments of universal application have been added to the rhetorical armoury by the ingenuity of mankind’. These two arguments are closely related. They are: the Wedge and the Dangerous Precedent.
The Principle of the Wedge is as follows:
you should not act justly now for fear of raising expectations that you may act still more justly in the future – expectations which you are afraid you will not have the courage to satisfy.
As Cornford explains, ‘a little reflection will make it evident that the Wedge argument implies the admission that the persons who use it cannot prove that the action is not just. If they could, that would be the sole and sufficient reason for not doing it, and this argument would be superfluous’.
This principle is closely related to the ‘Principle of the Dangerous Precedent’: ‘you should not now do an admittedly right action for fear you, or your equally timid successors, should not have the courage to do right in some future case, which, ex hypothesi, is essentially different, but superficially resembles the present one. Every public action which is not customary, either is wrong, or, if it is right, is a dangerous precedent. It follows that nothing should ever be done for the first time’.
In other words, those in power should avoid taking the right and just course of action if this would involve doing something new because this it would risk creating a troublesome precedent for the future, which might lead heaven knows where. Accordingly, the safer course of action is to take no action; never do anything new or different; everything must remain as it is.
Both principles are based upon the notion that people in institutions are not motivated by logical and reasoned argument. They only act when forced to do so by wider forces and circumstance. Until the circumstances change, they use every tactic and stratagem to avoid doing something new or different. They delay, prevaricate, dissemble, obfuscate and so on.
As Cornford explained, both principles – the Wedge and the Dangerous Precedent – stem from ‘the Political Motive’. This motive is based upon fear; ‘genuine, perpetual, heart-felt timorousness’. It is fear of the future and of the unknown, fear that any action that is not strictly in accordance with convention and unstated assumptions could well create risks and precipitate lots of change and upheaval, which would then undermine the established and settled order of things. As regards the DWP, it includes fear of HM Treasury.
Cornford further noted that both principles are ‘are addressed to the Bugbear of Giving yourself away’. In other words, they provide convenient cover to conceal the real intentions of those who espouse such arguments. Those who deploy such arguments are playing a game – or shadow-boxing – in order not to reveal their true motivations.
Another principle identified by Cornford is also relevant here: ‘the machinery for effecting the proposed objects already exists’: affected people can complain to the DWP. As Cornford noted, this argument ‘should be urged in cases where the existing machinery has never worked, and is now so rusty that there is no chance of its being set in motion’. Enough has been said above to demonstrate that requiring underpaid people to apply to the rusty machinery of the DWP’s special payments scheme is an inadequate response.
These principles and indeed the whole mindset which informs them apply to virtually all types of institutions. They certainly apply to government and, in particular, the British government. The caricature of the fictional Permanent Secretary, Sir Humphrey, is now beyond parody. It is perhaps no surprise that much of the dialogue in one episode of ‘Yes, Minister’ – ‘Doing the Honours’ – was directly taken from Cornford’s book.
It is precisely this attitude of mind that informs the DWP’s response to the PHSO. It has not agreed to the PHSO’s recommendations – not because it rationally weighed up the competing arguments – but simply because it does not want accept those recommendations, because it wants to keep a lid on things. What is interesting is the insight it gives us about the DWP’s internal state of mind. It does not suggest that the department is confident and sure-footed about its approach, that it is able rationally and logically to justify its position. On the contrary, the DWP’s arguments have all the hallmarks of a defensive approach of, trying to stop the dam from crumbling because of fear of the unknown. Its response to the PHSO is indicative of weakness rather than strength.
The muddle is illustrated by the department’s somewhat ironic approach to ‘blanket policies’ Indeed, the department seems both obsessed with and unable to decide on its blankets.
The DWP does not now want to adopt a blanket policy that it pay compensation to all cases – but adopting a blanket policy is precisely what the department did when it initially ruled out awarding compensation. Now, it has reverted back to its initial position that it should not apply a blanket decision that applies to all cases. It only wants blanket policies when they suit its purposes. In the DWP’s mindset, it is one way or another. There is no middle ground. But the department’s presentation of the matter completely overlooks the fact that there is a reasonable middle ground which is to consider each case on its own merits to decide whether or not to pay compensation and, if so, how much.
There is another sense in which the ‘Principle of the Dangerous Precedent’ is applicable to here. Indeed, while the DWP has disavowed its intention to create an adverse precedent, it had already done so – not in relation to the payment of compensation, but with regard to the underlying fault and maladministration – the flawed migration to ESA – which led to claimants being underpaid their benefits in the first place.
This was hardly the first time that the DWP had engaged in maladministration when introducing a new benefit. In the 1990s, the DWP (then DSS) introduced Disability Living Allowance to replace other benefits at the time. However, things turned out quite badly for claimants. The PHSO (then Parliamentary Commissioner for Administration) at the time reported that ‘the higher than expected workloads, coupled with inexperienced staff and an over-estimate of staff productivity, pushed the organisation beyond the point at which it could cope, and special measures were needed to deal with the large backlogs and long delays which had built up’. Until those measures began to take effect, it was the view of claimants, welfare rights organisations and MPs that ‘chaos reigned for a time’ (Parliamentary Commissioner for Administration, Delays in Handling Disability Living Allowance Claims HC 652 (1992-1993)).
That episode was a dangerous precedent and it has been repeated twice. Following the flawed migration of claims to ESA in the early 2010s, the DWP then went to experience considerable problems with the introduction of Personal Independence Payments during the years 2013-15, which lead to big backlogs and long delays for claimants. In 2014, the Public Accounts Committee concluded:
many disabled people have experienced long and unacceptable delays in their Personal Independence Payment being assessed and granted. The process has proved inaccessible and cumbersome for claimants, who are some of the most vulnerable people in society. The Department significantly misjudged the number of face-to-face assessments that providers would need to carry out, and the time these assessments would take. This has resulted in significant delays to benefit decisions and a growing backlog of claims. The unacceptable level of service provided has created uncertainty, stress and financial costs for claimants, and put additional financial and other pressures on disability organisations, and on other public services, that support claimants.
There continue to be similar delays. Reference could also be made to systemic errors in other areas of government: the failed introduction of the single payment scheme for farmers in the 2000s. No-one supposes that managing the changeover from benefit or policy scheme to another is simple or easy. But it is this recognition itself which should caution government against the type of flawed efforts highlighted here.
All of this reinforces a fundamental point made above. If the DWP wants to avoid becoming entangled with problems, harming people, PHSO investigations and recommendations, then the solution is clear: it should improve the quality of its administration and follow the principles of good administration. The DWP should implement effective principles of project management when it moves claimants from one benefit to another. When government fails in this endeavour, it should proactively compensate people who have suffered injustice as a result of its maladministration. Refusing to do so compounds and exacerbates the original maladministration.
In the House of Lords debate referred to above, Baroness Fookes asked the Minister what investigations the DWP was making to understand how the underlying error – the flawed migration to ESA – occurred in the first place and how it can be avoided in the future. In response, the Minister, Baroness Stedman-Scott, said:
When things like this do happen, they are awful and nobody is proud of them, but I am very pleased to say to my noble friend that the team responsible is looking at what happened and putting in place processes that will ensure that, God forbid, this never happens again.
It is not being unduly cynical to think that the same systemic errors will be repeated; the dangerous precedents are well-established and have built up over time. But even if they were not repeated, it seems clear beyond doubt that the DWP’s actions in this respect are insufficient to reassure those over 118,000 people to whom it has unjustifiably and wrongly denied compensation.
What should be done now?
When the Government rejects the PHSO’s recommendations, it can be scrutinised by Parliament and its select committees. In this instance, the House of Commons Public Administration and Constitutional Affairs Committee and the House of Commons Work and Pensions Committee can both scrutinise the matter by holding an evidence session and producing a report. We should now see these committees undertake this scrutiny of the DWP.
R. Thomas ‘Benefit Complaints: A Critical Analysis’ (2022) 44 Journal of Social Welfare and Family Law, https://www.tandfonline.com/eprint/QJJXY6RM7WWM353Q4IAP/full?target=10.1080/09649069.2022.2067681
R. Thomas, ‘Legal Entitlements and Administrative Practices: LEAP Exercises and Benefits Administration(2022) 29 Journal of Social Security Law 49, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4052616