Category: Social security

This blog includes discussion of issues in British social security policy, along with new material to complement my book, How Social Security Works.

“Well, here we go yet again … another sorry tale of HMRC institutional incompetence and inefficiency”

The judgment of Justice Nicholas Wikely in the Upper Tribunal in VO v HMRC (TC) [2017] speaks for itself:

“Well, here we go yet again.  I used the phrase “Well, here we go again” with a sense of frustration, bordering on despair, to open my decision in NI v HMRC [2015] UKUT 160 (AAC), a case in which I criticised Her Majesty Revenue and Customs (HMRC) for both its decision-making processes and its conduct of appeals in relation to tax credits claims. .. So, yes, in short this is yet another sorry tale of HMRC institutional incompetence and inefficiency which could well have led to injustice, were it not for the persistence of the Appellant.”

But of course, it did lead to injustice: the denial of entitlement and redress for five years. The judge explained the case as follows:

The HMRC written response to the Appellant’s appeal made the case look very
straightforward. In a nutshell, the Appellant had failed to reply to a request from HMRC to provide evidence of her entitlement to tax credits. She was therefore no longer entitled to tax credits for the relevant tax year and was liable for a substantial overpayment. So, according to HMRC, it was an open and shut case. End of story. … In her notice of appeal, the Appellant stated that “as I previously explained, I forwarded all the information required from me and to my surprise you never received the documents” (emphasis added). I interpose here that I have underlined the phrase “as I previously explained” as this statement alone should have rung alarm bells for the FTT. This is because there was nothing at all in the HMRC evidence provided with the appeal response to suggest that the Appellant had made any contact with HMRC before her notice of appeal … In the parallel universe that is tax credits adjudication, the file does not actually include something as elementary or fundamental as the actual decision notice. As HMRC’s original response to the FTT appeal explained, the HMRC computer cannot provide a copy of a decision notice – only the claimant can do that. So, in a classic Orwellian doublespeak, the response continues: “HMRC has not omitted to include the decision notices from the bundle; it is simply unable to provide copies”. How are we supposed to respond to this? “Oh well, that’s alright then.” Who designed this computer system? Did anyone think to check it was compatible with basic tenets of good public administration, let alone the principles of administrative justice?

He warns first-tier tribunals not to take HMRC’s statements on trust.

The basic principles of administrative justice include the right to know what the argument is against you, and the right to have a hearing. The same disregard for citizens’ rights, of course, is found in decisions about sanctions, where penalties are frequently imposed before the claimant has any opportunity to object.

For dignity and respect, it matters how people are treated

The Scottish Government has said that the new social security benefits will be bound by principles of dignity and respect, so the publication of a commissioned report on Social security systems based on dignity and respect ought to have been very welcome.  Unfortunately, the report fails signally to come to terms with its brief, choosing instead to emphasise either human rights issues or the substantive failures of social security policy.  Both make an essential contribution to  dignity – they are necessary for dignity – but they are not sufficient.  There is nothing in human rights legislation which says that people will be addressed politely, that they will be believed when they say things, or that officials will be considerate.

There is very little in this report about those issues.  The report acknowledges, in the Executive Summary, that “The feeling of being treated unfairly or viewed with suspicion by case workers on permanent alert for fraud is reported as particularly demoralising” – there is some further material on these problems on pp 33-35 – but the authors don’t go on to say what needs to be done about them.  A   chapter on “Ensuring dignity and respect in the claimant experience” really says nothing about the claimant experience, let alone about dignity and respect.

The central issue is how people are treated.  The report ought to have considered process at length – access, application, communication, assessment, handling changes of circumstance and so on.  There is some (admittedly dated) empirical evidence that many of the processes used for verification are unnecessary, that insisting on claimant declarations  colours the process, that security is disproportionate and ineffective in dealing with errors.  The system is not geared to deal with complaints or to correct mistakes.  The nearest the report gets to most of this is to  call for greater  personalisation, which risks increasing the scope to get things wrong and exacerbates the problems of judgmental administration.

An assessment of Basic Income

Luke Martinelli’s assessment of Basic Income is a serious, wide-ranging consideration of several of the arguments: among them, affordability, distributive effects, work incentives and political feasibility.  There is more to say about administration, implementation and the relationship to existing benefits, but no-one ever covers everything.

He characterises the opposition to UBI as saying that “an affordable UBI would
be inadequate, and an adequate UBI would be unaffordable.”  That’s not the whole story, either.  I put the case like this in a video interview:

“If you limit the level of benefit you are still dependent on other benefits, so you’ll get all the problems of the tapers, the poverty trap, the intrusion into people’s lives and the complexity.  If you increase the cost, then you can float people off those benefits – but what will you have achieved if you do that?  … those people who were formerly on benefits will find themselves on the equivalent in Basic Income, and you’ll have spent nearly all the money to the benefit of people who weren’t on benefits – to people who are better off.  So you have really got to decide, is it worth putting large amounts of money into a scheme which isn’t going to benefit the people you most want to help?”

Confusion about PIP

There’s a report in the i this morning about a letter sent by Frank Field MP to David Gauke, the Work and Pensions Secretary, detailing some of the hardship and problems  that have been created in the benefits system.  Field calls for a thoroughgoing review of current benefits, which I’d fully support.  But one of the points in the article is a mistake, almost certainly made by the newspaper reporter:

He backed an urgent review of the assessment system for evaluating PIP claims amid frequent complaints that it was too rigid to assess accurately claimants’ ability to work.

Presumably this is meant to refer to the assessment for Employment and Support Allowance.  Personal Independence Payment, unlike ESA, is not an out-of-work benefit; it’s a general income supplement for people with serious disabilities, supposedly partly intended to cover extra costs, and it is paid regardless of whether or not the person is working or able to work.    But I have come across cases, and I’m sure that Frank Field will have done as well, where PIP assessors have wrongly and inappropriately been asking people about work.  It’s the wrong test for this particular benefit.

From DWP research, many people never understood what they were claiming when they applied for  Disability Living Allowance, and now it’s being replaced by PIP it’s probably true that they don’t really understand that either.  Part of a review should be an attempt to get benefits that make sense to the people who administer them and to the people who get them.

 

The obsession with fraud is not new

A little bit of myth-making, this time about social security fraud.  Zoe Williams writes in today’s Guardian:

Even in the darkest days of me-first Thatcherism, the social security conversation hinged on whether or not the dole was enough to provide a decent life.  … the question of fraud rarely came up.

In fact, the obsession with fraud pre-dates Thatcherism.  Golding and Middleton’s book, Images of welfare, published in 1982, attributed the start of the moral panic about fraud to reporting of the Deevy case in 1976, but it started some time before that.  I’d date it from the publication of Robin Page’s exposé in the Spectator on 6 September 1969.  The article was syndicated in the News of the World (two weeks running) and questions were raised in Parliament.  In 1971, Keith Joseph set up the Fisher Committee on the abuse of benefits, which reported in 1973.   When the Thatcher government came into power, one of the first steps in this field, taken early in 1980, was massively to inflate the fraud figures.  (Reg Prentice explained to Parliament that higher figures were used by ‘large commercial organisations’ but said there was no reason to do any work to check that assumption.)

The obsession with fraud has been poisoning the system for decades, and there is no evidence that anti-fraud measures have done anything to improve the situation – the auditors haven’t fully approved the DWP accounts for years.  There is an alternative. The estimates for fraud and error in the State Pension suggest overpayments of 0.1%; the estimates for Pension Credit, a benefit which goes to more or less the same group of people, comes to 5.6% – more than fifty times as much.  If the government was serious about reducing fraud and error, they should look at systems which deliver benefits accurately and efficiently without it.

“A refusal to carry out a mandatory reconsideration effectively removes the right of appeal without consideration of the merits.”

At first sight, it might have looked as if the process of Mandatory Reconsideration had been overturned.  The Guardian reported that “The Department for Work and Pensions has been unlawfully stopping people going to tribunal to appeal against decisions to refuse them benefits”.  The decision of the Upper Tribunal, reported this weekend, is much more restrained.   The detailed issue it was considering was the imposition of time limits, which meant that people who did not ask for Mandatory Reconsideration within a month were blocked from going any further.  The time limits have been extended, to 13 months. The last words of the judgment are part of a description of  the process to this judgment, but have obviously been placed prominently to make the point:

a refusal to carry out a mandatory reconsideration effectively removes the right of appeal without consideration of the merits.

The problems of MR run deeper than that, however.  Mandatory Reconsideration turns appeals into a two-stage process; claimants have first to apply for an MR, and only after that is complete are they permitted to lodge an appeal.  That remains the case.  There will still be two hurdles; the decision only makes it easier to get to the first one.

The Upper Tribunal reviews a range of arguments about the system – their judgment runds to 48 pages.   They share the view expressed by several commentators that MR does nothing to expedite review, but imposes a barrier to getting to appeal.  Out of 1.5 million cases of Mandatory Reconsideration Oct 2013- Feb 2017, only one has subsequently gone to judicial review.  I’ve argued before in this blog that this process – described by a former Lord Justice of Appeal  as “an absolutely outrageous interference by the executive with the rule of law” – is probably unlawful.  The recent decision of the Supreme Court on access to tribunals reinforces that; it will be interesting to see what happens when that is taken into account in future decisions.

I am going, too, to add a point about the Social Security Advisory Committee which follows from all this.  When they reviewed MR last year, they wrote 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 judgment was badly misplaced, and that raises questions as to how a committee of independent experts could have made it.  I have been interviewed three times for possible membership of the SSAC, and have been turned down each time for the same reason.  The SSAC works by coming to a consensus, and  I was not prepared to pledge always to support a consensus view.  That is not how an expert committee should work; their primary role is not to come to a judgment, but to review and report issues for consideration.  Where experts disagree, the appropriate approach is to record the arguments on all sides.

The Social Security (Scotland) Bill – response to the call for views

The Social Security Committee of the Scottish Parliament has asked for views about the Bill that is about to be considered.  Submissions have to be made by 23rd August: details can be found here.

My submission is here.  Submissions are limited to four pages, which means I’ve had to be ruthlessly selective: I’ve said nothing, for example, about Carer’s Allowance, winter heating allowance or the awful mess that’s being threatened about funeral assistance.  What I have covered is this:

  • The reference in the principles to “efficiency” should refer instead to “cost- effectiveness” – the terms are not equivalent.  It may be efficient, for example, to limit the number of home visits; to put the onus of clarification on claimants rather than paid officials; or to reduce services to claimants who are particularly expensive or difficult to deal with, a process which has been a major concern in employment programmes. This is not how the Scottish social security system should be trying to operate.
  • The two stage-process of review and denial of direct access to appeal, based on Mandatory Reconsideration, is undesirable and arguably unlawful.
  • The provision for recovery of overpayments, regardless of the reason for overpayment, whether the claimant could have known there was an overpayment, or whether the claimant could have expected to make provision to repay, is oppressive.
  • Much has been left to subsequent regulations. In a framework bill, it should be considered how those regulations will be scrutinised and reviewed in future.
  • There is insufficient protection for the rights of claimants in the event that the Agency mistakes the law.
  • Short-term assistance should be more generally available than envisaged, and should be extended to cover problems with reserved benefits.

Additional note, 10th August.  An article in Third Force News has covered one of the points in this submission in somewhat heated style.  It’s suggested that I have ‘slammed’  the system and ‘hit back’ at the minister Jeanne Freeman.  I don’t for a moment question the Scottish Government’s good faith or our shared intention to get the new system to work in the best way;  we are trying to achieve the same objectives.  The point of my submission is to draw attention to a series of technical issues that might otherwise be overlooked.  More specifically, I do think that the Bill has on occasion accepted that the current practice of the DWP can be taking as the starting point for a new law – mandatory reconsideration is one example, the management of overpayments is another.   If the points I have made are taken into account, it will be a better Bill.

 

A decision about the rule of law

The Supreme Court decision on access to Employment Tribunals has wider implications than for those tribunals alone.  Lord Reed, in a judgment approved by most of his colleagues, emphasised strongly that access to justice was fundamental to the rule of law.

At the heart of the concept of the rule of law is the idea that society is governed by law. Parliament exists primarily in order to make laws for society in this country. Democratic procedures exist primarily in order to ensure that the Parliament which makes those laws includes Members of Parliament who are chosen by the people of this country and are accountable to them. Courts exist in order to ensure that the laws made by Parliament, and the common law created by the courts themselves, are applied and enforced. That role includes ensuring that the executive branch of government carries out its functions in accordance with the law. In order for the courts to perform that role, people must in principle have unimpeded access to them. Without such access, laws are liable to become a dead letter, the work done by Parliament may be rendered nugatory, and the democratic election of Members of Parliament may become a meaningless charade.

But there are at least three further circumstances in which the executive branch prevents benefits claimants from obtaining access to justice – not just failing to help, but actively putting obstacles in their path.  The first is the case of Mandatory Reconsideration, which deliberately creates a barrier between the claimant and the courts.  Evidence to Parliament by HH Judge Robert Martin, President of the Social Entitlement Chamber of the First-tier Tribunal, was that

the introduction of MR, rather than leading to a justified reduction in appeals, might discourage claimants who might have had “winnable” cases from appealing, because they found the process too onerous.

Lord Reed argues that “impediments to the right of access to the courts can constitute a serious hindrance even if they do not make access completely impossible.”  If there is a difference in principle between this and the Employment Tribunal case, I can’t see it.

The second is the case of sanctions, where penalties are imposed without a hearing and prior to any consideration of objections.   Michael Adler has argued, I think rightly, that the  current sanctions regime is not consistent with the established principles of the rule of law.

The third is the result of a decision by the House of Lords, the predecessor of the Supreme Court.  In Chief Adjudication Officer v Bate [1996] 2 All ER 790 HL, they decided that where it was found that the DWP had previously acted unlawfully, they would not have to apply the revised rule to previous cases, because it would be too burdensome to do it.  In other words, those who had suffered injustice had no right or reasonable prospect of having  injustice corrected.  In the decision reported today, Lord Reed argues “Access to the courts is not, therefore, of value only to the particular individuals involved”, and he cites a previous Lord Chancellor:  “The courts are for the benefit of all, whether the individual resorts to them or not.”  Just so.  The decision in Bate was a disgraceful misjudgment, and it is time the Court corrected it.

Why France is going to reform its housing benefit system

The French government has announced that their system of housing benefit will be reformed this autumn.  The minister, Jacques Mézard, is reported in Le Monde as saying:

We have a budget for APL (Aides personnalisées au logement) of 19 billion euros, a budget for all housing benefits of 30 billion euros, the highest in Europe, with a corollary: not enough housing and rents that are too high.  … For one euro more spent on APL, 78 centimes goes on higher rents.  We have to get out of this perverse system.

When housing benefits were first introduced in the UK, in the form of “Rent Allowance” and “Rent Rebate”, policy makers had been impressed by the French argument for subsidising low incomes rather than bricks and mortar – “aide à la personne” instead of “aide à la pierre“.  As in France, it’s led to higher costs, more complex administration, higher rents and often the exclusion of low income families from decent housing. It was a mistake then, and it’s still a mistake now.

Scottish social security benefits – a talk on video

For diehards only:  I gave a talk last week to a meeting of Common Weal and the Scottish Unemployed Workers’ Network, in Dundee.  It was filmed, and the film has been put up on Youtube.  The stuff I was covering will have a short shelf life.  It’s conceivable that you may have something more exciting to do with your day.

Further note, 25th July.  In the course of this talk, I refer to the Irish problem – that Northern Ireland, despite having full devolution of powers relating to social security for the best part of a century, was still being subject to direction from the Treasury and the DWP.  It’s just been reported that the UK government proposes to introduce the two-child limit in Universal Credit to Northern Ireland, along with the ‘rape clause’.  The principle at work seems to be that if there is no operative government in Northern Ireland, the UK government is free to do as it thinks fit.  The government really doesn’t understand devolution at all, and this is another illustration.