Examination of Witnesses (Questions 80-99)
SIR MICHAEL BUCKLEY AND MR ALAN WATSON
THURSDAY 21 MARCH 2002
80. What about the Treasury's part in that, that being the questions that arise in terms of the Treasury and any interaction with the Financial Services Authority? Would that not come under your jurisdiction?
(Sir Michael Buckley) To the extent that the Treasury was responsible for a matter which led to a member of the public sustaining or arguably sustaining injustice due to maladministration, yes, that would be within my jurisdiction. In essence, that is why I can look at the Financial Services Authority for the period I have mentioned, because during that period the Treasury was statutorily responsible for the prudential regulation of insurance companies, therefore the FSA was acting on their behalf. But I think it starts getting quite a far cry to say, "Perhaps the Treasury"if indeed they do"have some nebulous relationship with the FSA, therefore I can get in by the back door." I do not think I can. If it would help the Committee, I would be very happy to let you have a note.
81. I think it would be helpful. If you could do a note on the general issue here. I think it is something we would like to pursue, and perhaps we should have done already.
(Sir Michael Buckley) It is not easy to state the statutory position both compendiously and accurately. It may be that I have fallen into error at points and it would be good, I think, to set it out for the Committee.
Sir Sydney Chapman
82. Sir Michael, pervading your memorandum is a, I am sure justified, satisfaction. Your Office has managed to improve its performance efficiency: 68 per cent of cases were resolved, or statement of complaints made, within six weeks and so on. But I note that of what you call the 2000 cases referred to you last year, well over 10 per cent or 223 were to do with Equitable Life. Has that skewered the performance? Or is it, because it is outstanding, that the Equitable Life cases are not included. The point I am making is that presumably they are all of the same kind.
(Sir Michael Buckley) That, I think, is indeed the point. The Office generally does score, so to speak, as one case, those cases which are like peas in a pod. For example, some years ago we conducted an investigation into complaints about the performance of the Department of Trade and Industry in the affairs of the Ostrich Farming Corporation. The DTI eventually asked the court for a winding up order. It was suggested that they had been slow in doing so. We received something like 400 complaints about that. They were very similar. They were in identical terms. It was a campaign which, I think, the liquidators had instigatedperfectly properly, I do not make any criticism of them. We had those 400 cases, they could be dealt with in the same way, we ultimately issued one report which enabled us to deal with all the cases by reference to it. That is not the same with Equitable Life. Equitable Life complaints cover a wide range of circumstances. They may, for example, be purely about conduct of businessthe way in which, say, an Equitable Life salesman behaved. Others will be full square within our jurisdiction. So we do have the task, whether we like it or not, of not only registering all those cases but of analysing them and looking at them and seeing whether what the Office is doing about the representative investigation will fit the circumstances of that case. So it is not just a matter of saying, "We have got 300 and odd identical cases, therefore we should be scoring them as one." Again, Alan may want to say more on that point.
(Mr Watson) That is absolutely true. With the Ostrich cases we could simply park all the additional cases and concentrate on the one which we investigated. With Equitable Life there is a considerable amount of correspondence coming in about the individual cases. We are having to reply to all of that. We are having to look at all the individual cases and see how far they fit the circumstances of the one that we have taken out with the FSA and the Treasury. So the administration of these cases is quite a considerable burden on the Office.
83. Is it really in the same category as CSA cases? I mean, they are all totally different basically. Not entirely different.
(Sir Michael Buckley) They are not entirely different. There are a lot of similarities.
84. That is very helpful. MPs get constituents from time to time saying, "Please refer this to the Ombudsman." Even if the MP knows, because it is not a case of alleged maladministration, is it your opinion that we should still send the case on? I am not saying they are frivolous cases, but sometimes we clearly realise that the wrong planning decision has been taken rather than maladministration of the decision being taken.
(Sir Michael Buckley) I would always hesitate to prescribe to members how they should deal with their constituents. I think it would be a very dangerous thing for me to do. We do understand that MPs have constituents who will not take no for an answer unless it comes from our Office. We have no problems with that, if I may say so. My Office in the past few years has arranged seminars in the autumn for members and their staff at which we have discussed these issues. We try to explain our jurisdiction so that, as it were, quite straightforward and obvious cases, complaints about a private firm or obviously about a local authority, you can deal with those, without wasting much time by simply referring cases which we are bound to refer back. But we know also that there are cases which are quite tricky, in which the jurisdiction issues are not obvious and which it is our job to sort out. We know perfectly well that you have difficult constituents who, as I say, will not take no for an answer unless it is from us. If I may offer advice, if you will allow me to do so: if you are clear that this is not a case within jurisdiction and the constituent will take your say-so for it, I would encourage you to deal with it because I think it saves us time, but, if not, then please have no compunction in referring it to us, and we would much rather refer in cases of doubt than not.
85. I am inclined to observe that I suppose it depends upon the size of your majority! I tell you what I do, I will send it in to you but in a covering letter say, "I do not think this is a case of maladministration," really inviting you to write back straight away and improve your performance targets by saying, "No, it is not." I am fascinated . . . You have to refer to Mr D or Mrs C in your reports, but there is a professor who went to teach in the United States and the Inland Revenue either failed to give him advice or did not give him the right advice. He came back after 11 months, after teaching and doing research in the United States, when, had he stayed on for a year and a day, I think, he could have been absolved from UK income tax. You found in his favour, and, presumably after negotiation with the Inland Revenue, they agreed to pay the financial loss that he had made. Do you have greater powers than that? You do not have a power to order compensation, do you?
(Sir Michael Buckley) No. This is a subject which has been much debated. My belief is that the present situation is right for two reasons. First, I think it would make for a different relationship between my Office and government departments if, so to speak, we could go in and make legally binding awards. I think it would make for a less cooperative relationship. Secondly, we would run into difficulties with the European Convention on Human Rights, since I think we would then be determining civil rights and obligations. We would then be pushed into all the paraphernalia of Article 6 of the Convention which would require us at least to offer public hearings and so on. I think also one needs to be clear that, although sometimes the process of negotiating or discussing redress does take too long, it is very unusual indeed for the Office to fail to get what it thinks to be right in the long run. I think one should not assume that because the Office formally or legally has no power to issue instructions or to make rules, it is somehow incapable of securing what it believes to be justified redress.
86. If I may put the obverse of the point, which is that, if you did have power, the Inland Revenue has lost nothing because it has taken the money and it has merely paid it back. But if it had to pay it back with perhaps a little premium on it, it might make it more efficient in dealing with similar possible cases; in other words, it might improve their performance.
(Sir Michael Buckley) Possibly so. We do of course make recommendations for consolatory payments. For example, if someone has been subjected to distress or embarrassment or the thing has taken a lot longer than it shouldwhat we call botheration of dealing with complaintthe departments frequently are asked or sometimes volunteer to pay a modest sum of compensation. So there is that, but that raises, again, further problems. After all, the courts do not in these sort of circumstance impose penalties. They do not in normal circumstances do more than remedy financial loss. If we were in the same position as the courts, I do not think we would be saying, "Oh, we do not like the way you have dealt with this, so we are going, in effect, to fine you a few hundred pounds."
87. Could you tell us when your representative case on Equitable Life will be reported on?
(Sir Michael Buckley) I would not like to give a date, Chairman. We are making good progress with that investigation but there is a lot of evidence to be discovered and there will be some quite difficult questions on which we shall need professional advice. One of the difficulties in this case is going to be that, as you know, I do not have power to question discretionary decisions unless they have been taken with maladministration, and regulation is one discretionary decision after another.
88. I just wanted to have a senseare we talking this year?
(Sir Michael Buckley) Oh, yes. I would very much hope so, yes.
89. The summer?
(Sir Michael Buckley) The summer, yes. I certainly want to get ahead with this.
90. It sometimes seems to me, looking at public administration in the UK, that a general principle of it is that if a citizen makes an error, the citizen gets punished, and if the system is in error, the citizen gets punished. In your period of time as Parliamentary Ombudsman, have you found that the bureaucracy is better or worse or is unchanged?
(Sir Michael Buckley) I think it is a rather mixed picture. I very much agree with the point that Mr Brennan has made. I think there is an imbalance between what is expected of the citizen and what the administration, so to speak, expects of itself. Indeed, I made just that point in the annual report: there are clear deadlines for the submission of tax returns and if you overstep those deadlines you are in serious trouble; that may not be so for the Inland Revenue. I think there is a strong case for a more balanced approach. In some ways it reflects a general development, a general trend, that government departments or ministers are always saying they want to simplify the system and every year sees a few more metres added to the shelf space of rules and regulations. Again for entirely understandable reasons, there is pressure downwards on departmental running costs and the upshot is going to be more things going wrong, more maladministration, and in my view there should be greater readiness to give redress to citizens who are affected by that. It is all part of the whole general aspect. That said, I do believe that there has been a shift, with much greater readiness among government departments to pay redress when it is justified. You, Chairman, will certainly remember the inquiry that the Committee conducted 10 years ago now into redress for maladministration. The guidance from the Treasury in 1992 was in effect saying, "Try and get away with 50 per cent or less of what you think is reasonable," which, quite rightly, attracted very considerable disfavour from the Committee. Departments are a great deal better now. They are more willing to give redress; in particular, to make consolatory payments. I think this is an area in which UK central government can take some credit and so can my Office because a good deal of the improvements which have been made have been at least helped on their way by pressure from my Office. I spent, for example, a significant part of my first 12 months in discussion and negotiation with the Permanent Secretary at the time in the Department of Social Security (as it was) about redress for maladministration of CSA cases and we secured some very valuable improvements. At international conferences I attended and explained what we were doing in the United Kingdom, my colleagues were suitably surprised and impressed and so on. It is a mixed picture. The Government is doing a lot better than it did 10 years ago but I am still concerned that there is this imbalance.
91. Following on that point about speaking to international colleagues, where do you think (a) we rank, if you like, in administration of governments being responsive to the citizen compared with other countries? And (b) if we were looking at comprehensive reform of the ombudsmen system, where would you look to overseas for a model that might be suitable to use in this country?
(Sir Michael Buckley) It is very hard to get a clear comparison between this country and abroad.
92. Perhaps we should have league tables.
(Sir Michael Buckley) Indeed, so, though I am not sure who would compile them. On the whole, I think the government departments in this country do pretty well by international standards. If I may take just one example at randomand I emphasise that it is not intended to be typicala couple of months ago I visited the Greek ombudsman's office and they said that one of the problems they had was that a number of government departments just ignored court decisions. If the court decided against them, they would just carry on, regardless. That does not happen in this country. Of course there is enormous room for improvement but I do not think we should be too hard on ourselves in this countryas we tend to be. I do not think we compare too badly. If I were asked for a model, I do not think anything quite fits because, apart from anything else, there are differences in constitutional arrangements, but I think the Australian/New Zealand type of approach would be one of the things I would go for. Certainly I have benefited from discussion with colleagues in those countries.
Chairman: I am sorry, I smile only because the Committee has a developing interest in Australia and New Zealand, so it is a very good answer.
93. What is going to happen, as you understand it, to your role as Welsh Ombudsman when you retire? What do you think should happen to that role?
(Sir Michael Buckley) My understandingand I hasten to say that this is based on really rather imperfect information, which is of some concern to meis that the authorities in Wales propose to appoint their own person or persons, if I may put it in those terms, as Welsh Administration Ombudsman and Health Service Commissioner for Wales. Obviously, the jurisdiction of the Parliamentary Commissioner for Administration as regards all reserved matters will continue, and my successor will continue to exercise that jurisdiction.
94. We heard from Christopher Leslie, as you know, who talked at great length about the future. He was looking forward to bringing forth at sometime ideas and views. How much input have you had into this?
(Sir Michael Buckley) We, in the sense of being the public sector Ombudsman
95. Yes, absolutely.
(Sir Michael Buckley)have contributed quite extensively to the consultation document that the Government issued in the year 2000. We have had a number of exchanges with officials from the Cabinet Office but we have not, for example, been consulted about the drafting of any consultative document.
96. That is exactly what I am trying to get to. Do you feel that you should have been, given that you are there to represent, as Kevin quite rightly pointed out, the ordinary person? Do you not feel that you are being bypassed?
(Sir Michael Buckley) I am not sure that is quite the aspect I would pick onand that is not because the aspect is not important. Very far from it. The whole thing is with respect to the citizen. But it seems to me that this Committee and, indeed, Parliament more widely, will need to look at that. I think my main concern is that, quite naturally, very few people in Whitehall know very much about how my Office, let alone the local government office, actually works. It is important for us to be able to advise those who are preparing the consultative document and those who ultimately are drafting the legislation on what we think will work and what will not and what the consequences are of doing one thing rather than another. We, in a different sensemyself in my Scottish capacity with my Scottish colleagueswere quite closely involved with the work that the Scottish Executive did in their consultative documents. The sort of point we were able to bring out to them was that the way they were going, which was again to talk exclusively in terms of investigation and reporting, was not very helpful because ombudsmen need to be handling things informally. Eventually that got through. That is the sort of issue that I think it is very important that government should be aware of. There are various aspects; for example, jurisdictional issues, where
97. With respect, should that really matter. You are the Ombudsman. If there is a jurisdictional problem, that should be irrelevant. You should be able to cut through departments, through countries (in the case of Scotland and Wales) to be able to get to the truth.
(Sir Michael Buckley) The Ombudsman will certainly be able to ask, I hope, anybody for evidence or information which the Ombudsman thinks will contribute to an investigation. The point I am making is that some ways of drafting and formulating jurisdiction are easier to work than others. We had a great deal of difficulty over, for example, deciding what is in in terms of personnel. Some formulations are easier to work than others. But I do not think it is for the Ombudsman to say, for example, that such and such a body ought to be within jurisdiction. What the Ombudsman can say is that the consequences of having them within jurisdiction will be x or y.
98. That brings me back to where I started. Should you not be in a position to say to the Cabinet: "Look, really, we should be looking at this?" Because if you are having problems getting information out of government departments, you are not being questioned enough as to what you really should be doing.
(Sir Michael Buckley) Difficulties in getting information from government departments are not in any way because of lack of formal powers or jurisdiction. The difficulties that we have stem from rather different and, in some cases, rather more mundane things.
99. What? Basically, being obstructive?
(Sir Michael Buckley) It varies.