Friday 21 January 2022

Steve Webb can hardly be blamed for latest pension scandal

 Nor can any pensions minister in recent years. There is a separation between policy (the province of politicians) and administration (down to the regular civil service). So no minister or junior minister would have been aware of how pensions were administered - until things go badly wrong.

One such systematic error has now been exposed in a damning statement by the Public Accounts Committee. 134,000 women have missed out on their full entitlement since 1985.

The committee's report said the errors were the result of outdated systems and heavily manual processing of pensions at the DWP. 

Small errors that were not recognised added up to significant sums of money over the years.

In a damning report, it concluded:

  • The failures have led to significant losses to taxpayers. Staff costs in correcting mistakes by the end of 2023 are expected to reach more than £24m
  • There is no plan for contacting families of pensioners who have already died, and who should receive some of their entitlement
  • The DWP has been "inconsistent" in paying pensioners interest on the money that was owed
  • It has ignored knock-on consequences of paying lump sums, including on benefits and social care provision, to those it underpaid
  • Other pensioners could be missing out and should receive clearer information about how to claim

The committee said that there was a risk that the errors that led to underpayments in the first place could be repeated in the correction programme, the ninth such exercise since 2018.

There was also concern that, by allocating staff to deal with this problem, backlogs occurred in dealing with claims from new pensioners who suffered delays in receiving their state pension at 66.

Meg Hillier, who chairs the committee, said: "For decades DWP has relied on a state pension payment system that is clunky and required staff to check many databases - and now some pensioners and the taxpayer are paying in spades.  

"In reality, the DWP can never make up what people have actually lost, over decades, and in many cases it's not even trying.  

"This is a shameful shambles."

Having defended individual pensions ministers since the 1990s, I cannot do the same for the Thatcher government as a whole. 1985 would have been near the start of the Thatcher/Heseltine civil service reforms (summary pdf here) In my view, they have resulted in an inexorable decline in standards and clearly at the time demoralised the service. At the same time, (DVL apart) Departments were being denied the investment needed to upgrade their IT systems. 

From pension scandals to waste water treatment failures, we are now seeing the results of misguided policy decisions driven by political bigotry. It is unlikely the country can afford to correct all of them. One dreads to think how long the even worse decisions of this current corrupted government will dog us.

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