HC Deb 18 December 2002 vol 396 cc292-300WH 12.52 pm
Mr. Anthony Steen (Totnes)

I am grateful that this debate has been selected, because it highlights several issues about which the Government should be concerned, and raises the question of bureaucracy—the civil service—and whether it is accountable to Parliament, its Members and other individuals.

The case in which I am interested involves the possibility of the Treasury being caught unaware by a £1.7 billion debt. It concerns an 82-year-old in my constituency, Mrs. Kathleen Lonsdale, who has enjoyed a quiet life at the Westerlands residential home in Kingsbridge. She is looked after very well and was perfectly content until recently when the Pension Service informed her that she was entitled to a rather large sum of money.

Overnight, Mrs. Lonsdale's life changed when she received her assessment for the minimum income guarantee. She was told in a letter from the Pension Service on 25 July 2002 that she would receive £162,497.94 a week. That was to be backdated to 14 July 1800. That translates to a lump sum payment of around £1.7 billion, and that is without inflation.

Mrs. Lonsdale is an intelligent 82-year-old lady, but she could not quite grasp the figures or the impact on her life of receiving a backdated cheque of those proportions. However, she did work out that it would be enough to buy out the owners of her residential home! On reflection, as many elderly people might be, she became concerned that such an award would not only change her life, but make her the focus of local and national media attention. No doubt she would have been the recipient of begging letters galore. She also harboured a lurking suspicion that there might be some error in her minimum income guarantee assessment.

Mrs. Lonsdale is fortunate enough to have a devoted daughter who lives nearby in Kingsbridge, a Mrs. Patricia Millington. I have discussed the case with her, and she is aware that I am raising it in the Chamber. Indeed, she is happy for me to do so. Once she spoke to her mother, she realised that the letter from the Pension Service was a mistake. Mrs. Millington received three letters on her mother's behalf at the end of July from the Plymouth pensions office. Those letters stated that the records showed that Mrs. Millington had still not returned her mother's income support book, which was why the problem arose. The only snag—the reason why Mrs. Millington had not returned her mother's income support book—was that she had never received one in the first place.

Mrs. Millington went to the Kingsbridge post office to find out whether it, instead of her, had received the income support book. When she arrived, she was told that her mother's book had been impounded and that no more cash orders would be allowed. Mrs. Millington felt deeply embarrassed to be told that, in a crowded local post office. She had never seen the book so, having been told that she should return it, she had some difficulty in doing so. She did not make eye contact with any customer whom she knew, and scuttled out. Then she tried in vain to get some sense out of someone in the Plymouth pensions office.

On 2 September, Mrs. Millington managed to get through to someone—a great achievement—who told her that no comment could be made on her mother's case because there were no copies of any correspondence relating to it on the files. That is an Alice in Wonderland situation. Everything then went quiet, and then Mrs. Lonsdale received a reassessment from the Pension Service on 9 September. It told her that it was a dreadful story and a terrible mistake, and that she should never have been offered a backdated payment of £162,497.94 each week from 14 July 1800. The figure was wrong: she should have received only £42,107.52 a week backdated to 21 October 1880. She was to lose 80 years' worth of minimum income guarantee. On my calculations, she was to lose some £120,000 per week for that period. Mrs. Lonsdale was philosophical about the matter. She concluded that she would still be better off and would, on her calculations, get a backdated payment not of £ 1.7 billion but of £275 million. She thought that that would do nicely before Christmas.

That was when I got involved. I was approached by Mrs. Millington, who did not know whether it was lunch, tea or dinner. I contacted the chief executive of the Pension Service—a Ms Alexis Cleveland—in the hope that I would make some headway. I fear that I did not. I also wrote to the Secretary of State for Work and Pensions. His office sent me an acknowledgment card. I told the Minister that one mistake was understandable but two was downright inexcusable.

I had heard nothing from the Pension Service two weeks later, so I approached the Minister again. On 3 October, some five weeks after my original inquiry to the chief executive, she responded herself. In her letter, she stated that it is clear that neither Mrs. Lonsdale and Mrs. Millington have received the standard of service they have a right to expect". That was certainly true. I was concerned that nobody was offered any apologies, though that is perhaps not quite right—the chief executive offered apologies not to me but to Mrs. Lonsdale and her daughter, who were grateful. I was also concerned that the chief executive said that the Pension Service's computer system was designed to automatically issue letters and that local staff were unable to alter the information printed on them. I do not know what local staff do. Perhaps they simply watch the computer.

The chief executive made one concession: she acknowledged that the letters issued to Mrs. Lonsdale were clearly nonsense—she picked that point up. However, the only reason that the letters were nonsense was the overpayment—quite a substantial overpayment. Mrs. Lonsdale was ordered to surrender her income support book because of that mistake, whereby she would have been offered so much money. However, here is the punchline: the chief executive went on to say that after further assessment of Mrs. Lonsdale's case she was entitled to—wait for it—3p a week. That is just over 10p a month.

A further two weeks passed. I again contacted the chief executive, advising that unless she put right the ridiculous state of affairs and considered an appropriate sum by way of compensation, I might apply for an Adjournment debate in Parliament. That was in October. Following my successful application for this debate, amazingly, an official from the Plymouth pensions office contacted Mrs. Millington to discuss possible compensation—quite rightly. She arranged to see that official yesterday, and the official took down extensive details concerning Mrs. Millington's mother's case, as if she knew nothing. The official said that she would have to file and complete a report. She said that whether compensation was paid for all the inconvenience and trouble was not a matter for her, but that it would take up to three months to take a decision, and that many people would have to be involved.

I do not know how many tens of thousands of pounds' worth of people's time the problem has already cost. I do not know how much time Mrs. Millington or I have spent on it. I do not know how much trouble it has caused for the elderly lady herself. I do not know how many officials have been involved. The Minister and Alexis Cleveland have been involved, and they cannot even sort out the compensation issue. There should have been a modest sum by way of compensation.

I had better return to the story, as I know that the Chamber is waiting to hear what happened next. Not only was the computer in Plymouth going wrong, but the chief executive's computer started to go wrong. I received a second letter from her, dated 21 October, which was identical to the letter that she wrote me on 3 October. Both letters were signed by her personally, but neither dealt with the problem. I was, however, relieved to receive another letter from Ms Cleveland on 24 October, telling me that the general conclusion was that there was a fault in the computer system—she is a bright lady—and that it was being investigated. It had taken two months to work out that there was a fault. Until the error was rectified, she said, staff were obliged to use the same computer-generated letter to correspond with Mrs. Lonsdale. A computer was churning out the wrong figures and could not be stopped; neither could letters from the chief executive to Members of Parliament. The chief executive admitted that she found it highly embarrassing to apologise to me again on this matter. I can quite understand her sentiments.

Out of the blue, I received another letter from Ms Cleveland, identical to the one of 24 October, and dated 29 October. This was followed by a telephone call to my office from an official of the Plymouth Pension Service, who apologised for the fact that the computer had sent out further identical letters, but said that the service was powerless to stop it happening. The Pension Service computers appear to be completely out of control, churning out thousands of letters and causing widespread confusion. Surely a simple solution would be to ensure that the computers are not linked to printers. If they are not, and there is no paper in the printers, they cannot do any damage. However, as long as they are linked up, the stuff will continue to be churned out.

I next received a letter from someone else, calling himself the performance director—things were beginning to sound a bit like a Kafka novel by now. He wrote on behalf of the chief executive on 19 November, apologising for sending me two identical letters, and explaining that steps were being taken to prevent its happening again.

Mrs. Millington's approaches to the Pension Service did not fare much better. She heard nothing from the Plymouth Pension Service following her letter of 24 August to the manager, Mr. Gilmartin, until the end of October—a two-month gap. When she received a letter, it was signed not by Mr. Gilmartin but by a Mrs. Theresa Cooke. Just think of the number of staff involved in the case. Mrs. Cooke was called the processing team manager. Thus we had a performance director, a processing team manager and the chief executive—everybody—involved in the case. Mrs. Lonsdale wondered whether she was merely a figment of the computer's imagination or whether she really existed, because with the letter came a cheque—for 45p.

Hon. Members may be interested to know that I learned, by means of a parliamentary question, that the cost of issuing that cheque was £1.47—£1.02 more than the value of the cheque. I can see that the Minister realises the absurdity of this situation. Perhaps hon. Members can imagine how confusing and distressing it was for Mrs. Lonsdale and her daughter. That is quite apart from the waste of public funds incurred in trying to resolve the matter, with so many letters flying backwards and forwards. At the centre of it all was an 82-year-old lady, whose daughter and Member of Parliament were beside themselves with anger and irritation at the debacle.

As if all that were not enough, the Pension Service performance director told me in his letter of 19 November that under current regulations—I knew that there must be some regulations somewhere to provide an excuse—the service was bound to pay Mrs. Lonsdale the amount to which she was entitled. I am advised that where the amount of income support is less than £1 a week the Secretary of State may decide the intervals of payment, but that those intervals cannot exceed 13 weeks. Thus, every 13 weeks Mrs. Lonsdale must receive a cheque for 45p, even though it costs the taxpayer £ 1.47 to produce it.

I do not understand why the regulation cannot be changed, so that such small sums are administered annually. What of the waste of taxpayers' money? Clearly, this case has got completely out of hand, and change is needed. As I understand matters, other benefits are paid annually. Why cannot the 45p be added to Mrs. Lonsdale's pension, so that she does not need a separate cheque?

The cost of the case will not quite run to the sum of £1.7 billion that was the original forecast for Mrs. Lonsdale's benefit, but certainly a lot of money is involved. Last night an official belted from Plymouth to Kingsbridge, which is a 50-mile round trip, to discuss compensation, only to tell us that it would take three months to sort the matter out. Marks and Spencer would have sorted it out immediately, paid a good will cheque and said that the firm was very sorry. Neither the elderly lady nor her daughter is after money, but they think that the management of any well-run organisation would want to put things right by means of a payment to compensate everyone for their trouble. Indeed, it would be nice if their MP got something, too, because the situation is absurd. What would be an appropriate figure? It would be one that compensated appropriately for the problem. We have an out-of-control computer system that churns out paper with rubbish on it, a chief executive of a public agency who cannot stop sending out the same letter, and an 82-year-old being offered £1.7 billion and £275 million from public funds, only to be sent a cheque for 45p.

This is not just a good Christmas story— although it will be, in one sense, if the Minister, as I hope she will, says that the service will see to it that Mrs. Lonsdale receives a cheque for whatever amount by way of compensation before Christmas—but a story with a serious underlying message. Bureaucracy under this Government is getting too big; it is out of control, unaccountable and just not working properly. Computers are making people's lives a misery. Far from improving our lifestyles, they are creating additional frustration and stress, as this example shows.

I am the MP in this maelstrom, but unlike the apprentice in Dukas's "The Sorcerer's Apprentice", I cannot get the magic to work. In that story, the apprentice gets hold of a book of spells and, as a result of the spell that he casts, the room becomes flooded with water. Just when he is about to drown, the magician turns up. He says the right spell, prevents any more water from pouring into the room and the brooms then pump the water out again. In this case, I cannot get the magic to work; to make the Government put things right, so that the Minister says, "Sorry, but mistakes do happen," and Mrs. Londsdale is paid the minimum income guarantee on her pension annually and receives at least £100 compensation in time for Christmas.


The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle)

I congratulate the hon. Member for Totnes (Mr. Steen) on securing the debate. I fully understand why he asked for it. I am grateful for the opportunity to respond to the points that he raised about the unfortunate experiences of Mrs. Lonsdale and Mrs. Millington in dealing with the Pension Service.

The Government are committed to providing a high-quality service for pensioners, although they clearly have not managed to do that in this case. I personally regret that the standard of service provided in this instance has been so consistently poor. The chief executive of the Pension Service, Alexis Cleveland, has already apologised, apparently more than once, although I was not aware of all the duplicate letters to which the hon. Gentleman referred. However, having considered the circumstances of the case in preparation for the debate, I wrote to Mrs. Millington to apologise to her myself, having seen the catalogue of errors that she has had to endure. It is not the hon. Gentleman's job to apologise on my behalf, so I shall not ask him to do so.

Mrs. Millington acts on her mother's behalf and, as the hon. Gentleman said, in March 2002, she made a claim for minimum income guarantee on behalf of Mrs. Lonsdale. In July, Mrs. Millington received a computer-generated letter about Mrs. Lonsdale's entitlement, which was clearly confusing and about as wrong as it could possibly be. It implied that she was entitled to £162,497.94 a week—some minimum income guarantee—and that she was entitled to it from approximately 200 years ago, which would make her a very old lady.

Mr. Steen

And a very rich one.

Maria Eagle

Indeed. The letter went on to say that Mrs. Lonsdale was not entitled to the minimum income guarantee from 28 February 1852. It is clearly a computer-generated letter, and clearly completely wrong. I do not know of any benefits that we backdate by 200 years.

Mrs. Millington also had to endure the embarrassment of having her mother's finances discussed publicly in the post office. I am particularly sorry for that. The problem is compounded by the fact that another nonsensical letter was then sent out. That was equally wrong, but not quite as generously so.

I should like to say something about why the letters were issued, because I can understand the frustration that they caused. In this case, they were obviously wrong, but mistakes in letters are not always that blatant and that can cause a problem. The information concerning Mrs. Lonsdale's affairs was correctly entered on to the computer system by the local Pension Service staff. However, something about the way in which the system processed the data resulted in the ridiculous letters. The data were clearly corrupted in an appalling manner during the processing of the claim.

It is normal for computer-generated correspondence to be issued from a computer centre rather than from a pensions centre. Pensions centre staff deal with telephone calls and with clients. They do not have to look after the computer as well, so the case was handled at two different places. The local staff could not have known about the matter and could have done nothing to check the contents or to prevent the letters from going out. The technical fault with the computer system has been referred to our IT specialists and is being investigated so that it can be rectified, Mrs. Millington does not receive any more ridiculous letters and she is kept correctly and fully informed about her mother's benefit entitlement.

This appears to have been an isolated fault—no other such incidents have been reported, although that does not help the hon. Gentleman or Mrs. Millington. We have not been able to identify why the data were corrupted so badly. The income support computer system has 3.5 million live claims on it, which is why we cannot site the computers in the offices of local staff and expect them to check all the letters. Badly corrupted cases such as this account for just 0.007 per cent. of those 3.5 million cases. I know that that is of little comfort to Mrs. Millington, who falls into that 0.007 per cent. category. Nevertheless, I hope that I can give some assurance that what has happened to her is not a regular occurrence. The hon. Gentleman said that computers were making our lives a misery. The rest of the 3.5 million people whose claims are dealt with properly and in a timely fashion week in, week out obviously feel that they benefit from the computer system. I can understand why Mrs. Millington and Mrs. Lonsdale at the moment do not.

I should like to say something about Mrs. Lonsdale's entitlement. It is typical that after this kind of appalling mistake, the correct calculation shows her entitlement to be 3p a week. That compounds the situation. Where the amount of income support payable is less than 10p per week minimum income guarantee, and there is entitlement to another benefit that may be paid with income support, such as retirement pension, it must be paid at an interval that cannot exceed 13 weeks. That is a statutory entitlement and, although the sum is very small, it is not for the Government to say that it is too little to pay. In many circumstances, not necessarily Mrs. Lonsdale's, entitlement to minimum income guarantee can act as a passport to many other, more valuable benefit entitlements, such as a carer's premium or a disability premium. They represent significant weekly sums. That does not apply to Mrs. Lonsdale, but she could, for example, be passported to free NHS dental treatment, if that were of help to her. There can be advantages beyond the small sum.

The hon. Gentleman made some understandable points about the cost of receiving girocheques when the amount payable is so small. Some provisions, known as the de minimis provisions, state that where the entitlement is less than 10p a week, payment is sent quarterly rather than issued in weekly payments, which cost, as the hon. Gentleman said, £1.47 per girocheque.

It is also possible to pay minimum income guarantee in the same book as retirement pension, which is the solution in such circumstances. The customer has to agree, of course, and I understand from the reports of the discussions yesterday between an official from the Department and Mrs. Millington that the idea was put to her. If Mrs. Lonsdale agrees, we can end the nonsense of a quarterly cheque for 45p and the sum can be added to the retirement pension book. That seems the sensible solution.

Mr. Steen

I am grateful for the understanding and sympathy with which the Minister is dealing with the matter, and I await the punchline on the compensation. Many people other than this good lady must have small pensions. Is it not a good opportunity to suggest to those whose benefit every quarter is 3p, or another figure less than the girocheque value, that it should be added to their pension? Perhaps the computer, in its sophistication, might be able to identify those paid modest sums every week and ask them whether they would like it paid annually or on their pension.

Maria Eagle

The hon. Gentleman is right. My understanding is that we make that suggestion to people who receive small sums when we can get the letters right and sent to the right place in a timely fashion. He must remember that people's circumstances change. I shall not go into all the details in the Chamber, but I will write to him—

Mr. Steen

Just once.

Maria Eagle

Yes, just one letter. I do not intend to plague the hon. Gentleman too much.

It seems that the visit yesterday has indicated a change in the mother's circumstances that may lead to an increase in her entitlement to minimum income guarantee, which I am relieved about. It would be sensible to combine both payments in the book, whatever the sums, so long as they continue to be small. That may be a way out of the girocheque conundrum.

The hon. Gentleman raised the subject of compensation. There has been a request for compensation, and I understand why. Because we are dealing with public money, and because it is not for Ministers to make decisions about compensation, I cannot give him the Christmas present that he wants for his constituent this afternoon. However, the arrangements through which officials administer the payment of compensation in ex gratia sums for such appalling levels of service will be gone through as quickly as I can ensure that they are gone through. So far as I can ensure, the request that has been made will be dealt with in a timely fashion and properly under the rules that apply. I do not make the decisions but, having considered the circumstances, I think that there may be a case for an ex gratia payment.

Mr. Steen

I understand that the Minister is choosing her words carefully. I cannot imagine a case that cries out more clearly for compensation, but that is not the interest of my constituents or me. We want Departments that get something wrong, for whatever reason, to do more than simply write letters of apology. Ministers can be fired, and there can be debates criticising the Government on the Floor of the House, but my constituent is an individual. The rights of the individual need to be protected.

When big bureaucracies get something wrong, the system should not take three months. Like any good private company, it should offer compensation to correct services that are not correct. That is what worries me about the case. There should not simply be a committee of officials, all paid quite a lot of money, to consider the matter. The Minister should say, "Please deal with this quickly and suitably." I hope that she might be able to do that.

Maria Eagle

I certainly have no problem giving the hon. Gentleman the undertaking that I shall ask my officials to deal with the matter quickly and suitably.

I understand that Mrs. Millington had difficulty when trying to contact the Plymouth pensions centre by telephone to resolve the matter, as she was unable to get through. The telephone service at the centre is set up to provide a recorded message suggesting, if there is a delay in being answered, that the caller should ring back later. The aim is to prevent long queues of people waiting to be answered, who will all be losing money. Many pensioners have little spare cash; indeed, they are often on fixed incomes. They do not have money to waste on waiting to be put through. The intention is not to prevent callers from getting through; it is to prevent them having to hang on in the hope that they might be put through.

The Pension Service is developing as a customer-focused organisation. It is working to improve its service, which is tailored to the needs of pensioners. In order to achieve that, however, it needs to ensure that the highest standards of service are maintained. Mrs. Millington did not receive anything approaching a high standard of service when she tried to contact the service on the telephone. Again, I regret that and apologise for it.

Many pensioners deal with the service by telephone. For example, more than two thirds of retirement pension claims are now made on the retirement pension teleclaims line. When we can get it to work properly— in this instance, it did not—it provides a good service to pensioners. It is convenient and it means that they do not have to go to buildings in the town centre or some considerable distance away.

We are committed to making it easy to contact the service and to make claims. To ensure that, we are developing 26 modern centres, using the most up-to-date equipment, to deal with queries accurately and efficiently. We are setting those up. It is vital that we provide good-quality service. Once those centres are all operational, we shall make sure, as far as we possibly can, that Mrs. Millington's experience is not repeated in a widespread way. Her inability to get through is a matter of regret. Problems often come in not in ones and twos on social security cases but in great clumps. Unfortunately, that is what happened in this case.

Mr. Steen

There may not be another opportunity, because the Minister will be finishing her speech in a moment, so I want to thank her for the measured approach that she has taken in this debate, and for her remarks and her admissions. I am grateful to her for indicating that she will suggest to the Pension Service that it deals with the matter efficiently, effectively and suitably.

Maria Eagle

The hon. Gentleman has correctly spotted that I am coming to the end of my remarks; one can apologise only so many times in a Westminster Hall debate. I am pleased to be able to say that mistakes of that kind are rare. However, we appreciate that they do occur, sometimes in ways that can cause distress and upset. I am as aware of that as the hon. Gentleman, having spoken directly to his constituent. I reiterate my apology to Mrs. Millington and Mrs. Lonsdale for the less than acceptable service that they received.

The hon. Gentleman suggested that MPs should be given something for having to deal with such issues. I therefore wish him a very happy Christmas.