EBT stands for ‘Electronic Benefit Transfer’. The system has been used in several US States and the general approach has a fairly consistent record of messing up the administration. It’s not astonishing, then, to read a report about an audit in Pennsylvania, which found that 2324 dead people received benefits last year. The audit is 114 pages long, much of it in repetitive appendices, and it may not be your leisure reading of choice, but there’s a brief press report here. The breach arguably isn’t that bad numerically, given that there are nearly two million cardholders – but this is only one possible category of misuse. What this audit is really about is trying to devise procedures to plug the gaps that the discrepancy has revealed.
This kind of problem is fairly predictable – I’ve criticised the approach several times on this blog. Financial institutions and banks generally know where the vulnerable points are in their security, and over the years they’ve developed familiar processes to reduce the problems. Alternatives to money, such as EBT cards, come with none of those protections, and that’s why reports like this have to be written to develop them.
The general arguments for competition – arguments about quality, innovation and cost control – don’t apply very clearly to the supply of domestic water. The provision of fixed water supplies is one of the strongest cases of a “‘natural monopoly”; the quality of the product has to be uniform; and there are strong public goods argument to say that the provision should not be subject to the choices of providers or consumers. No house in the UK is considered fit for habitation if it does not have an internal fixed water supply providing drinkable water. So it’s already questionable whether the arguments for ‘competition’ being forwarded by the regulator, Ofwat, offer any clear advantage to citizens.
That makes the recent statements of Ofwat’s Chief Executive, Cathryn Ross, somewhat puzzling. She claims:
“We are living in an age of retail revolution, but water customers are being left behind. Customers tell us they think they should have the freedom to choose and don’t understand why water is the only retail market in which there isn’t some form of competition.”
Who, I wonder, are these customers? How many of us think of water as a ‘retail market’? Are we baffled by the lack of competition? Are there really deputations of villagers standing there with pitchforks and firebrands, demanding that their services be privatised?
The Register reports a small glitch in the Universal Credit scheme. Access to the online system was closed for more than 24 hours after an upgrade went wrong. A DWP spokesperson described this as a ‘minor issue’.
When the Royal Bank of Scotland crashed access to cash for its customers with a botched upgrade in 2012, it led to a flurry of political statements, consideration by the Treasury Select Committee, the intervention of the regulator and fines for banks. I might have asked, rhetorically, if there was any prospect of treating the DWP in a similar way, but we all know there isn’t.
There is some discussion about using ‘helicopter money‘ to revitalise spending in depressed economies. A letter today to the Guardian by 35 economists argues:
A fiscal stimulus financed by central bank money creation could be used to fund essential investment in infrastructure projects – boosting the incomes of businesses and households, and increasing the public sector’s productive assets in the process. Alternatively, the money could be used to fund either a tax cut or direct cash transfers to households, resulting in an immediate increase of household disposable incomes.
There is a way to get cash usefully to certain people, a little less randomly than the image of the helicopter dropping money suggests. The benefits system has three main routes that might be used to distribute one off payments:
- The Christmas bonus (forget the name, it’s usually paid in early December anyway) goes to recipients of 18 benefits, including pensions, disability benefits and ESA.
- Cold Weather payments are special payments made to claimants of pension credit, ESA, JSA. The cold weather is irrelevant here – the DWP computers aren’t regulated by a thermometer: what matters is the capacity to make one off payments.
- The Winter Fuel Payment (again, forget the name – it’s not about fuel, or cold weather) mainly goes to those above pension age – there are exceptions but those are defeasible.
There may also be scope to supplement Child Benefit with one-off payments, though that is less clear.
Any of these would be much more beneficial than a tax cut. The problem with tax cuts, apart from the work they create, is that they go to better off people. People on lower incomes tend to spend more proportionately on essentials (food, energy and housing), so at least the first use of the money will be in the domestic economy. It may also do a little for poverty, and that is no bad thing.
The Social Security Advisory Committee has published a review of Mandatory Reconsideration. It is a much better report than the press release suggests, because it reviews in detail the problems and issues that claimants have in getting decisions reviewed and corrected. However, the headline element in the Conclusion, picked out by the press release, is that “Properly conducted, Mandatory Reconsideration could be an efficient process that provides opportunity for timely review, the admission or reinterpretation of evidence and the avoidance of costly tribunals.” That is very questionable. Support for the principle of MR confuses the arguments for internal review – which is always necessary for quality control and management of mistakes – with the new, failing system, which delays and obstructs the opportunities for internal and external review.
There are three very fundamental problems with MR. The first is that decisions made against a claimant are implemented before any response or contrary case has been considered. The second problem is that MR does not offer claimants the opportunity to know of and respond to information relating to their case. This is a basic breach of ‘natural justice’, one of the core principles of UK law. The third is that because MR is a mandatory process for claimants, there is necessarily a delay in correcting unlawful action: barriers to access are obstacles to justice, and justice delayed is justice denied.
It is debatable, then, whether the system of Mandatory Reconsideration is lawful. Because judicial review is only available when other recourse has been exhausted, MR would have to be complete before a judicial test would be possible, and the long delays in implementation make this a considerable obstacle. But it does stand in breach of long established principles of administrative law. That is why the UN Committee on Social, Economic and Cultural Rights has just condemned the UK system for “the absence of due process”, in breach of its obligations under the UN Charter. Mandatory Reconsideration cannot be ‘properly conducted’ – it is designed to be improperly conducted.
Audit Scotland has published a report on the operation of the “National Fraud Initiative”, which is mainly concerned with the operation of big data in order to detect fraud by searching for anomalies. The central assumption of the report seems to be that improving the consistency of data will save money by limiting opportunities for fraud.
There is a central confusion at the heart of this approach. Following the reports of the DWP, and by extension the tests applied to local government in benefits administration, the report muddles three overlapping, but quite distinct issues: fraud, error and selectivity. Using data to review inconsistencies identifies potential sources of error. It does not necessarily identify, or relate to, fraud – which depends on deceit.
- measures to refine selectivity are liable to increase error (the more conditions there are, the more there is to go wrong. That is why the rates of error in Pension Credit are fifty times those for State Pensions.) Equally, they and they create opportunities for fraud. They do not, then, improve the efficiency of the system.
- measures to protect systems against fraud are likely, for the same reason, to increase error.
- measures to protect against error may reduce opportunities for fraud, but do not necessarily do so – it all depends on what kind of error is being addressed.
There may be opportunities to save money through big data; but anti-fraud measures are often expensive, and in a situation where many people do not receive the benefits they are entitled to, smoothing out inconsistencies might cost more.
I had no great hopes of the Chilcot enquiry; I’ve only read the ‘Executive Summary’, 150 pages of disconnected sentences, and have no plans to read more. When the Francis report (on hospitals) came out, I complained about excessive word length, the repetitions, and the failure to understand what an executive summary was. Chilcot has the same vices. It was immediately obvious that, with 2.6 million words, only specialists and obsessives would read it, that the writers lacked the confidence and competence to select the facts that mattered, and that anyone who wanted to cherry pick and reinterpret material would be able to do that, regardless of evidence to the contrary. This is the third recent report, after Levison and Francis, that seems to have been produced by a team who don’t understand what a report is and what it has to do.
The House of Lords Constitution Committee has published a report on Devolution in the UK. It’s primarily focused on the relations between the four nations; that means that, despite taking a wide range of evidence, it misses the point almost completely. It doesn’t understand the most fundamental problem with the whole idea of devolution: that power in the UK is overwhelmingly centralised. Local government in the UK used to be responsible for hospitals, social assistance, public housing, gas, electricity, water, police, fire, public health, schooling and transport. Local authorities could develop enterprise, issue bonds to borrow money, and raise money for specific projects. All of those powers have been taken away. The promise of the ‘Northern powerhouse’ is a pale shadow of what local government used to be.
During the Scottish referendum campaign, I wrote about The failure of the UK.
The most obvious problem is remoteness – the problem of London-centred government. That was a problem in the 1920s and 30s, and the centralisation of the UK since World War II has made it progressively worse. The process began with the centralised control of services and resources that were necessary in wartime; after the war, while central government gradually (and reluctantly) relinquished control of industry and markets, it retained control of resources and services that were formerly part of local government. … In the process, the regions – all the regions – have been left behind. It’s not just the arrogation of control to the centre over public services; it’s been the sustained campaign to deny any part of the regions the power to borrow, to build, to take action on behalf of their population.
The process of ‘devolution’ is about delegating scraps of authority, rather than allowing regional and local authorities to act. Federalism is not about the grant of authority: power in a federal government is reserved to smaller units. There is no understanding in this report of that principle or what it implies.
The Prime Minister has been accused of a diplomatic faux pas in describing Nigeria as ‘fantastically corrupt’. I only know Nigeria at second hand: over the last fifteen years I’ve met a long series of Nigerian students studying for the Masters in Public Administration. Most of them would, I think, share the Prime Minister’s view. If anything, they have an exaggerated view of it; I’ve sat in class while Nigerian students claimed, in the presence of other students from Iraq and Somalia, to be the most corrupt country in the world. The Corruption Perceptions Index published by Transparency International ranks Nigeria 136th in the world, while Iraq is 161st and Somalia is bottom at 167.
Initially, I found students training for public administration were reluctant to discuss issues of corruption. As time has gone on, there has been a greater sense of openness, and willingness to discuss the situation, both ethically and practically. Klitgaard argues, in Controlling Corruption, that some corruption may be necessary for a system to work at all: the task is to reduce it, not to impose zero tolerance. Low pay in the public service is a problem, because it makes the system vulnerable to bribes. There is a case for introducing standard charges for services, because there is not much point in pretending that services are free if people have to pay bribes to get the free service.
Many of Nigeria’s official efforts have been devoted to catching the big fish, through the Independent Corrupt Practices Commission; but that is not the everyday aspect that most affects people’s everyday lives, often based in small-scale shakedowns and demands for money from officials. According to my students (who may not be representative) items where people used to demand bribes or a ‘dash’, like birth certificates or passports, have become more automated, and people have learned to record the behaviour of corrupt police and officials on their mobile phones (e.g. in this report). Things are getting better, but they have a way to go.
Tricia Marwick, the retiring Presiding Officer, has been making again a case for a review of the structure of committees in the Scottish Parliament. Because there is no second chamber (unless we count the UK parliament in Westminster as one), the scope for initiating, revising and monitoring legislation is limited. In principle, the Committees have that role. Marwick argues that there are too many committees for the number of members, committees have been dominated by supporters of the government and the role of committees has often been reactive.
There is a real problem here, but her proposed solutions have not attracted much support. Reducing the numbers of committees leads to some topics eating time from the scrutiny of others – Health and Sport, Education and Culture, Rural Affairs and Climate Change. Besides, extra committees are still needed in Parliament for the scrutiny of particular legislation, so there is no way of ensuring that MSPs only serve on one committee. There just aren’t enough of them to go round.
There are several alternatives which might be considered. One might be to appoint a body, like the French Conseil d’Etat, to consider the technicalities of legislation. (The French model combines that function with the judicial branch, which is not wise – it violates the separation of powers, and it gives too little attention to the substance of policy. The principle to take away is that legislation can sensibly be reviewed by an appointed external body, reporting back to elected officials.)
Another option would be to create an external support structure for the committees, allowing committees to delegate the process of evidence gathering, monitoring and expert judgment to appointed sub-committees, whose reports and work would then be scrutinised by the elected politicians. At present, that kind of scrutiny and support is not available to the Committees; it is only available to the Scottish Government through the civil service.