67. Ms U seeks compensation for the hardship she was caused. In considering our recommendations, we have referred to our Principles for Remedy. They say that where poor service or maladministration has led to injustice or hardship, the organisation responsible should take steps to put things right.
68. In order to determine a level of financial remedy, we review cases where similar injustice has arisen. We also consider the impact on an affected person. When determining severity, we consider, among other things: how long the failures impacted on the person affected; what that impact was; any ongoing/long term impact; and the extent that that affected the person’s ability to live a ‘normal’ life (that is to go about life unhindered). We also consider physiological impacts, including long-term pain or illness.
69. We find that the injustices set out are evidence of a lasting impact that affected Ms U’s ability to live a relatively normal life, and impacted on her physiologically over a prolonged period. Our view is that a financial remedy for those injustices is appropriate.
70. We recommend that within a month of the final report, DWP:
- write to her to apologise for the impact of the maladministration on her
- make a payment of £7,500 to compensate her for that impact
- apply an appropriate rate of interest to the benefit arrears payment of £19,832.55.
71. In its response to our provisional views DWP said it agreed to our recommendations to apologise, pay interest, and pay compensation to Ms U, but it queried the amount of compensation we have recommended. £7,500 is in level five of our six-level severity of injustice scale (with six representing the most severe). As set out we find that the impact on Ms U was consistent with the circumstances considered necessary to warrant a payment at that level. We also considered information from other cases.
72. As well, the Principles for Remedy say that acting fairly and proportionately includes providing remedies to others who have suffered injustice or hardship as a result of the same maladministration where appropriate, that people should be treated consistently and that decisions on remedies should take proper account of previous decisions made on similar facts. Ms U was one of a large number (over 100,000 according to a DWP estimate in 2020) of people affected by the migration, some of whom received arrears payments via the LEAP exercise. We provisionally find that DWP should seek to remedy all those who suffered an injustice as a result of the maladministration we identify. We recommend that, within three months of the final report, DWP:
- says what action it will take and when to remedy financial and non-financial losses caused to those people adversely affected by the migration not included in the LEAP exercise
- reconsiders its decision to rule out compensating people included in the LEAP exercise for financial and nonfinancial losses and does so in a way consistent with its own and our relevant guidance
- reports to the Work and Pensions Select Committee (copied to the Public Administration and Constitutional Affairs and Public Accounts Select Committees) on its progress and what decisions it makes about how to remedy its failings.
73. DWP does not agree to our recommendations concerning others affected by the same error. It says the unfortunate handling of Ms U’s case was a simple misunderstanding and there is no evidence that other non-LEAP exercise claimants were affected. If Ms U’s decisions were typical, DWP will have declined to make others special payments on wrongly applied grounds, will have told them they could not complain to its Independent Case Examiner and will not have told them about the Ombudsman. That means that likely routes for such evidence were closed off. As well, among the papers DWP sent the Ombudsman were internal messages where staff were seeking guidance on ‘conversion to ESA’ and were told ‘a decision has been made in relation to special payments for IBR/ESA conversion cases… Ministers have stated no special payments will be made’. DWP special payments staff said during the investigation ‘We have never paid compensation for these cases’. None of that communication drew a distinction between LEAP and non- LEAP exercise claimants.
74. Secondly, turning to the LEAP exercise, DWP said the special payment scheme ‘applies to redress for the impact of maladministration on an individual’ and not to large scale corrective exercises, which are aimed at correcting cases and paying the right amount of benefit. DWP cited the Managing Public Money principle that departments should not create precedents that put the taxpayer at risk to support its approach.
75. The Guide for Special Payment Officers includes ‘Special exercises are set up to identify customers affected by a particular error and provide a remedy. The following might result in a special exercise: ‘A systemic failure which affects a number of similar cases’. The guide and DWP’s Financial redress for Maladministration Policy and Guiding Principles include the Principles for Remedy guidance that the public body should ideally return complainants and, where appropriate, others who have suffered injustice or hardship as a result of the same maladministration or poor service, to the position they were in before the maladministration or poor service took place, and if that is not possible, compensate them appropriately. The introduction to the Principles for Remedy says it ‘accords with HM Treasury’s guidelines on remedy as set out in Managing Public Money’. Managing Public Money says ‘When a public sector organisation recognises that it needs a scheme for a set of similar or connected claims after maladministration or service failure, it should ensure that the arrangements chosen deal with all potential claimants equitably’. We accept Managing Public Money aims for Departments to consider the financial context, but also seeks fairness in the design of schemes. We therefore consider that Managing Public Money does not rule out what we recommend and instead gives guidance about how to do it.
76. DWP has accepted the maladministration we identified. But it has not accepted our recommendations to do something proactive about others it knows must be in the same position as Ms U. We think this is extremely disappointing.