An investigation into DWP’s handling of migration to Employment and Support Allowance

Our findings on the complaint

48. Ms U complains that when DWP migrated her to ESA in 2012, it failed to pay her the incomerelated component for the period 23 May 2012 to 11 August 2017. The National Audit Office said DWP did not check people’s entitlement to both income-related ESA and contribution-related ESA as it should have. The Committee said arrangements for transferring people to ESA were fundamentally flawed and implemented without basic checks.

49. DWP said in August 2018 internal guidance that a decision maker was ‘required to consider entitlement to both elements…when making a conversion decision and to gather information about the claimant’s financial circumstances’, and said that the failure to do so was an official error. DWP’s special payment decision in Ms U’s case said its ‘failure to look at ESA(IR) entitlement as well as ESA(C) is accepted as maladministration’.

50. We consider that DWP is right to say that its failure was maladministration. According to the Principles of Good Administration, DWP should have provided effective services, and planned carefully when introducing new procedures. Its approach was so far below that standard, we find DWP’s handling of Ms U’s (and potentially thousands of other customers’) migration to ESA was maladministrative.

51. Ms U also complains DWP failed to compensate her for the impact of that error. The reasons DWP gave for refusing to do so in August 2020, despite acknowledging its maladministration, were:

  • ‘Though this case was cleared before the LEAP exercise started and the ministerial steer cannot be used to refuse a Special Payment, I believe the rationale behind the steer still applies…the Minister’s steer [was] that we should pay the arrears but not any special payments’.
  • The Submission that led to the ‘steer’ argued special payments should not be made ‘for the following reasons: we are undertaking a LEAP exercise and as we intend to repay appropriate ESA arrears and have already corrected our processes, we consider further redress by way of a special payment is not appropriate; payment to cases in this LEAP exercise may set a precedent for future LEAP exercises…; and, further redress would cause additional…costs’ for this LEAP exercise.
  • The Submission said that given the LEAP exercise ‘further [our emphasis] redress by way of a special payment is not appropriate’.

52. We find DWP’s approach to be maladministrative generally and specifically in relation to Ms U’s case for the following reasons.

53. First, a blanket recommendation not to compensate people was inconsistent with the Principles for Remedy guidance that any guidance or procedure that public bodies use to decide remedies should be flexible enough to enable the public body to consider fully the individual circumstances.

54. The Submission, which sets out DWP’s reasoning, said to understand the impact on an individual ‘we would need to ask each individual claimant how our maladministration affected them’. DWP decided what an appropriate remedy would (or would not) be without knowing what the injustice that the remedy was meant to put right was. That was inconsistent with the Principles for Remedy guidance that public bodies should ‘consider fully the individual circumstances’; and its own Guide, which says ‘Injustice and hardship resulting from maladministration should be addressed on a case by case basis’. Furthermore, the Guide says ‘Poor service will impact upon…different people to different extents. For special payment purposes, it is the degree and duration of the impact that is normally more important [our emphasis] than the scale of the error…The customer should normally be asked to provide objective evidence of the impact’. DWP took the view that it could rule out compensatory payments without considering the degree and duration of the impact of its error on those affected and without attempting to obtain the relevant evidence. The Submission did not identify that was inconsistent with DWP guidance.

55. DWP’s Submission cited the likely cost of making special payments to the people affected. The Submission did not acknowledge the fact that the Principles for Remedy guidance says ‘finite resources should not be used as an excuse for failing to provide a fair remedy’. According to the Managing Public Money guidance it might have consulted the Treasury for advice about ‘cases which…could set a potentially expensive precedent’. We have seen no evidence that DWP considered doing that.

56. Secondly, because it took the above approach DWP failed to consider Ms U’s individual circumstances and reached a decision that was inconsistent with the relevant standards. DWP’s Guiding Principles include that ‘Individuals should not be disadvantaged as a result of maladministration’. The special payment decision in Ms U’s case acknowledged that ‘The reduced income since 2012 has meant that she had an income lower than the government says someone in her circumstances needs to live on for a sustained period’. Yet because DWP had adopted the above approach it did not take steps to remedy that.

57. Thirdly, DWP’s reliance on the Minister’s ‘steer’ ignored that that concerned LEAP exercise claimants and that Ms U was not one of them. The Principles of Good Administration include that decision making should take account of all relevant considerations and ignore irrelevant ones. The Principles for Remedy include that public bodies should consider all relevant factors when deciding the appropriate remedy. A concern about a precedent for a LEAP exercise was not relevant to Ms U’s case. DWP thus took irrelevant factors into account and as a result reached the wrong decision. In its response to our provisional views, DWP accepted it had got the ESA conversion process wrong for some claimants, including Ms U, and agreed it had used its special payments guidance incorrectly in Ms U’s case. DWP said it therefore broadly agreed with our recommendations concerning her.

58. For all these reasons, we find that DWP’s failures to act in line with its and our relevant guidance was maladministration.