Employment and Support Allowance Underpayments

(Limited Text - Ministerial Extracts only)

Thursday 18th October 2018 Commons Chamber

[Marsha De Cordova (Battersea) (Lab)]

(Urgent Question): To ask the Secretary of State for Work and Pensions if she will make a statement on the updated figures on the employment and support allowance underpayments.

[The Minister for Disabled People, Health and Work (Sarah Newton)]

The Department is correcting some historical underpayments of ESA that arose while migrating people from incapacity benefit to employment and support allowance. We realise how important it is to get this matter fixed. The mistakes clearly should not have happened and it is vital that the situation is sorted as quickly as possible.

For the initial stage of the exercise, we expect to review around 320,000 cases, of which around 105,000 are likely to be due arrears. We now have a team of more than 400 staff working through these cases and have paid around £120 million of arrears. We expect to complete the vast majority of this part of the exercise by April 2019, and we have to date completed all cases where an individual is terminally ill and has responded to the review, thereby ensuring that they receive due priority. The additional cases will be undertaken throughout the course of 2019.

The announcement in July to pay cases back to the point of conversion requires us to review an additional 250,000 cases, of which we estimate around 75,000 could be due arrears. We will undertake this work throughout the course of 2019. An additional 400 members of staff will be joining the team throughout this month and November, and we will be assigning further staff throughout the review of the 250,000 cases. That will enable us to complete this very important activity at pace.

The Department has prioritised checking the claims of individuals who, from our systems, we know to be terminally ill. To date, we have completed all cases from the initial 320,000. Where an individual is terminally ill and has responded to the review, we want to ensure that they get that money as soon as possible. We are therefore now contacting cases identified as most likely to be have been underpaid according to our systems. Some of those cases will undoubtedly be the most complex ones.

The Department yesterday published an ad hoc statistical publication, setting out further detail on the progress we have made in processing cases, and revised estimates of the impacts of the exercise, including details on the number of claimants due arrears and the amounts likely to be paid. Yesterday, I also updated the frequently asked questions guide and deposited it in the Library, and I will continue to update the House.

[Marsha De Cordova]

I thank Mr Speaker for granting this urgent question.

Yesterday, it emerged that up to 180,000 ill and disabled people have been underpaid vital social security dating back to 2011. In July this year, the Government initially estimated that 70,000 ill and disabled people were underpaid, but it is now clear that more than double that amount were underpaid £5,000 on average, after having been wrongly migrated from incapacity benefit to contributions-based ESA, thereby denying them the additional social security support payments such as the severe disability premium. It has taken the Government six years to acknowledge these mistakes and seven years to find out how many disabled people have actually been affected. Some disabled people will wait 10 years to receive back payments.

The Department for Work and Pensions now estimates that it will pay up to £1 billion as a result of this shambolic error, so will the Minister tell us what mechanisms the Department has in place to ensure that the timeline for repayment is followed? Will she ensure that she will keep this House updated? Will her Department pay compensation to those who have been pushed into rent arrears, debt and destitution? What support will the Department provide to the estates of the ill and disabled people who have tragically passed away before receiving their back payment? How much of the Government’s total expenditure on social security is spent on underpayments, and what actions are the Government taking to put this right? Given the scale of the error made transferring people to ESA, how can the Government ensure that they will get it right when transferring up to 1 million disabled people on to universal credit? Perhaps the most important question is this: will the Minister apologise to the almost 200,000 disabled people and their families who have been denied vital social security support?

[Sarah Newton]

We first came to the House to talk about this issue last December, and we have regularly updated the House since. I myself have already apologised. Clearly, this was a dreadful administrative error in the Department and should not have happened. The permanent secretary has also apologised to the Public Accounts Committee and the National Audit Office for the administrative mistakes.

It is important to recognise that, when people were transferring across from IB to ESA, a very paternalistic approach was taken, meaning the claimant was not involved in the transfer at all. All the funding they were receiving from the Department was transferred across, so nobody had anything taken away from them; rather, people missed the opportunity to receive additional support by way of an additional premium. We are now making sure, by reviewing these cases, that people get everything they are entitled to, because it is important that our benefits system benefits those who are entitled to it.

The hon. Lady raises important questions about what we have learned. We have learned a great deal from this exercise. As we have regularly told the House and Select Committees—the permanent secretary was before the Work and Pensions Select Committee only yesterday answering questions—the culture and mechanisms in the Department for spotting errors have been fundamentally reviewed. As we have discussed at length—this is a matter of public record—people in the Department and stakeholders came forward and pointed out some of the problems with the migration, but the Department responded in the belief that they were a series of one-off errors.

By 2014, it was recognised that some people were not being migrated accurately, and guidance was put in place. These were administrative errors that occurred in the Department, and officials took the appropriate action to the best of their ability. In fact, it was thanks to the good housekeeping of the DWP that the scale of the error was spotted. It was during the routine work undertaken on fraud and error that it was detected. At that point, Ministers were told, and they then undertook the administrative exercises that have led to the situation today.

As the Minister responsible now, I am looking towards the next huge migration of people—from ESA to universal credit—and the Secretary of State has made it absolutely clear that we will take an extremely careful test-and-learn approach and make sure that this time we involve the claimant in the migration. That is how we will avoid the situation reoccurring.

[Sir Mike Penning (Hemel Hempstead) (Con)]

The Minister has rightly apologised, and I, too, apologise, because I was the responsible Minister during part of the migration. Mistakes happen in all Governments—they happened during the 13 years Labour was in government and before that when we were in government. The question is how we handle it. In a Department with a budget in excess of £250 billion a year, mistakes will be made, but will the Minister make sure, where compensation payments are required—because there will be people who have suffered—that we admit it and address it, rather than taking a partisan attitude, which I am sorry to say we have heard here today? Mistakes were made before, and mistakes have been made now. We have to address that today.

[Sarah Newton]

I appreciate what my right hon. Friend says. As I have made clear from the start, and as is completely supported by the Secretary of State, my focus is to fix the problem as soon as possible. We have put in considerable additional resource to make sure people get back payments as soon as possible. As far as possible, we are reaching out and getting the money to those who will most benefit from it.

I also want to reassure the House that the families of people who would have benefited from this additional payment and who tragically have died are being contacted. We are trying to find their families so that they can have that money.

Then there is the whole issue of whether people have missed out on passported benefits; I think that is the point that my right hon. Friend was raising. Each passported benefit is the responsibility of the Government Department concerned, and it would be very impractical for us to find out whether people accessed particular schemes. For example, the Department of Health, as we all know, has a low-income prescription scheme that some people might have accessed and some might not have done. We are going through the process of, wherever possible, making sure that people get the money that they should have as soon as possible. We have ongoing discussions with the other Departments that have passported benefits to make sure that people on low incomes get those benefits.

[David Linden (Glasgow East) (SNP)]

It is absolutely staggering that this error has happened on the DWP’s part. The fact that it was allowed to happen over so many years should be shocking, but actually it is not, because I and many of my colleagues see, week in, week out—every single week—the absolute ineptitude of the Department for Work and Pensions. I have a lot of respect for the Minister, but to suggest that this was somehow due to a housekeeping issue on the part of the DWP really is laughable, because it has been an absolutely unacceptable situation.

Will the DWP be undertaking investigations to find out what impact having less money has had on these people? How many of them were forced into poverty, and how many had to use food banks? How many suffered physically or emotionally as a result of this catastrophic error, and was their condition impacted? What investigations are the Department undertaking to ensure that similar errors have not been repeated? How is the Minister strengthening the Department’s internal mechanisms to ensure that these errors can be rectified more quickly in future?

[Sarah Newton]

The permanent secretary has been discussing with the Public Accounts Committee and the National Audit Office the very substance of the hon. Gentleman’s question about strengthening procedures within the Department to make sure that this does not happen again. The National Audit Office made a series of recommendations to the Department about strengthening procedures within the Department which the permanent secretary has accepted and which are now in place. For example, if members of staff or stakeholders raise concerns about something going wrong or some unintended consequences with regard to the administration of benefits, they are referred to a committee in the Department and those matters are properly considered. We have much wider and deeper stakeholder engagement. It is particularly important now, as we move forward in designing the new benefit of universal credit, that stakeholders work with disabled people themselves—who are obviously experts on their own condition—and with us to shape those processes to make sure that we absolutely get them right. I am absolutely determined to make sure that that is the case.

[Alex Burghart (Brentwood and Ongar) (Con)]

I welcome the Minister’s apology and the comments she has made about system learning—that is extremely important. How long does she envisage it will take before everyone affected is repaid the money they are owed?

[Sarah Newton]

We are working as fast as we possibly can, and we confidently expect everyone to be paid by the end of next year. As I say, we prioritised the people who we think are most likely to have been affected by the underpayments so that they can have their money fastest. We have regularly updated the House. We released the statistics yesterday so that the House could be fully apprised of the situation, and I will continue to do that.

[Ruth George (High Peak) (Lab)]

I apologise, Mr Deputy Speaker, for having to head off to the Select Committee meeting in a moment.

Will the Minister confirm how much of the £1 billion underpayment now being cited is due to payments made before October 2014, thanks to the Child Poverty Action Group’s successful court action, and thanks only to that? When Her Majesty’s Revenue and Customs makes someone overpay tax going back years due to official error, they are paid interest and often compensation. Will the Minister confirm that these ESA recipients, who are often in a much worse position than taxpayers, will receive similar interest payments backdated to when their payments should have been made?

--- Later in debate ---

[Sarah Newton]

I thank the hon. Lady for that question. I know that she does fantastic work on the Work and Pensions Committee, and no doubt we will discuss this further at the Committee.

Let us be really clear about what happened. The advice that the Department got was that section 27 of the Social Security Act 1998 applied. That was why we felt we had to make the decision to back-pay to 2014. When additional information came forward from the National Audit Office and the Child Poverty Action Group about official error, the Secretary of State took the decision that, of course, we must do what the law says and go right back to the point of conversion. It was not in any way that the Government were trying not to do the right thing. We have proactively been utterly transparent and open with the House about this error, and we want to fix it as soon as possible.

The hon. Lady asked about the two phases. The first group of people that we are looking at date back to pre-2014 and the second group are from 2014. We have started to make payments to both groups of people, and so far we have paid out £420 million to the pre-2014 group.[Official Report, 22 October 2018, Vol. 648, c.2MC.]

[Bob Blackman (Harrow East) (Con)]

We are talking about some of the most vulnerable people in society, who will be assisted by either carers or charities. Can my hon. Friend update the House on what assistance is being given to charities and carers? Is there a helpline or somewhere that people who may not be contacted by the Department can seek help and assistance?

[Sarah Newton]

My hon. Friend is a doughty champion for the most disadvantaged people in society, so I would expect no less a question from him. To reassure him, I visited the main centre in Oldham where we are contacting people who we feel may have been affected and then beginning to collect information, so that we can ensure that we pay them what they are owed. We are being very careful to ensure that we send letters, and in the letter there is information about a helpline that people can call.

We are very happy to speak to people’s carers. As my hon. Friend says, some people with severe disabilities may not be able to engage with us, and people with mental health conditions may be anxious and not want to engage with us. I was incredibly impressed by the care, compassion and professionalism of my colleagues in the Department for Work and Pensions in Oldham who are undertaking this very important exercise.

[Stephen Timms (East Ham) (Lab)]

The National Audit Office did not find the Department to be transparent when it was raising concerns about this; it found it to be defensive. Unfortunately, that has characterised the Department for a number of years around universal credit, as the NAO has pointed out in the past. With this much bigger transfer ahead, which the Minister mentioned, are there any proposals to change the culture of the Department and to be more open when problems of this kind are raised?

[Sarah Newton]

I am grateful for the right hon. Gentleman’s question, and I deeply respect the work that he has done throughout his time in Parliament to stand up for the most vulnerable people in our society. I can reassure him that we are learning a lot of lessons from what happened when we migrated people from incapacity benefit to ESA. I think he was in the House when the Labour party created the work capability assessment and ESA. We have been working very hard to improve that benefit and to ensure that we learn lessons.

These problems arose because of the way that the migration was handled, and I am determined to ensure that when we go forward into UC, claimants are involved, to ensure that they are not missing out on any of the benefits to which they are entitled. We are working very closely with disabled people, people with health conditions, charities, citizens advice bureaux and disability rights organisations to ensure that we get that process absolutely right.

[Tom Pursglove (Corby) (Con)]

Can my hon. Friend confirm how those affected will be communicated with and how quickly? Is appropriate guidance and advice being cascaded to commonly used community advice services?

[Sarah Newton]

Once we scan the cases of those who have been underpaid to see who is most likely to benefit, we write to them and give them a telephone number so that we can work with them to complete their form as quickly as possible. We of course very much welcome the support that people get from carers and other professionals to do that. There is a telephone line, and we do work very carefully and considerately to make sure that people can work with us as easily as possible.

[Thangam Debbonaire (Bristol West) (Lab)]

My constituent L has been without ESA since September 2017 and has been surviving on personal independence payments. After lodging an appeal with a sick note, he should have been put on the appeal payments rate, but he was not, despite the intervention of his support worker, until I intervened, which is not satisfactory. He is now receiving the appeal rate, but even if his appeal was successful today, he would be owed over £4,000—money he needs—and he still has no appeal date. I know the DWP staff are doing their best, but they have told my staff that L has slipped through the net. Is the system not supposed to be the net? Does the Minister think this is acceptable?

[Sarah Newton]

I clearly do not think that that case is acceptable at all. Clearly, there was a mistake there. I am pleased that the hon. Lady has been able to intervene and that the gentleman is now getting the benefit to which he is entitled. We are always working to improve our processes and our systems.

[Philip Davies (Shipley) (Con)]

May I commend the Minister, who is a decent person? She is an excellent Minister, and she is doing a great job of dealing with an issue that predates her period as a Minister by an awful long time. She should be commended for the work she is doing in trying to put this matter right. That is in stark contrast, I might say, to the Labour party.

My hon. Friend the Minister will recall the scandal of tax credits, when half the people were paid incorrectly—some underpaid, some overpaid and millions paid the wrong amount—and those people are still, in many cases, owed those debts today. May I commend her for the work she is doing? She should not allow herself to be sidetracked by Labour Members, who sound all indignant when it suits them, but when they were in office and tax credits were introduced—I believe the right hon. Member for East Ham (Stephen Timms) was in government at the time—they made a complete Horlicks of it and never fully cleared up the mess they created.

[Sarah Newton]

I thank my hon. Friend for his kind words. It is an honour and a privilege to have this job, and I am absolutely determined that we will do everything we can to make sure that people get the back payments they rightly deserve. He makes a very good point about the absolute devastation that tax credits caused to so many people’s lives, and he is quite right to remind us of that. I want to point out that when people were transferred from IB to ESA, nobody had a loss of income. What we are talking about is money to which they might have been eligible at the time but did not get at the time, but everybody transferred across on the benefit they had.

[Ian Mearns (Gateshead) (Lab)]

I say to the hon. Member for Shipley (Philip Davies) that I am sorry, but two wrongs do not make a right, and his party has been in government for eight years—I repeat, eight years—now.

This involves hundreds of thousands of the most vulnerable people in our society, which I am afraid to say makes me angry and very sad. Given the time that has elapsed since this came to light, some if not many of the individuals who are known to be terminally ill will, sadly, have died. Their loved ones will have lost a loved and treasured family member in the knowledge that they had to endure increased hardship due to wrongly withheld benefits. What are Ministers doing to console those families and to compensate them for their loss?

[Sarah Newton]

I absolutely agree with the hon. Gentleman that these are some of the most vulnerable people in society. That is why we have put in place everything that we can to reach out to them and make sure that they get the benefits they absolutely deserve to have, and where people, tragically, have passed away, that their families receive those benefits. I have apologised, the Secretary of State has apologised and the permanent secretary has apologised. This mistake should not have happened, and we are absolutely determined to sort it out as swiftly as we possibly can.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I am afraid that the Minister coming to the Chamber and praising the Department for good housekeeping is extremely ill-judged and inappropriate in such a serious situation. Of course, this is just the top of the hill. I have had vulnerable constituents waiting for up to a year, and receiving reduced payments or nothing at all. Before this scandal even came out, one of my constituents had to be paid £2,000 backdated, but only—like my colleague, my hon. Friend the Member for Bristol West (Thangam Debbonaire)—after my and my team’s intervention. Will the Minister tell us how many claims are allowed following an appeal, and how long is the current waiting time for those appeals?

[Sarah Newton]

The hon. Gentleman is now bringing up cases of people who applied for ESA more recently—I think that is what he is talking about—which is different from the people who were migrated across from incapacity benefit to ESA. Clearly, it is really important that we get the decision right first time for everyone. That is what we absolutely want to do: make sure that people applying for ESA are treated with respect and dignity, and get the right result.

I always look at the claimant experience, because behind every statistic is a real live person. The independent data shows that, when asked how they experienced the work capability assessment, over 90% of ESA claimants are satisfied. Obviously, some people, about 9% of people who apply for ESA, take their cases to appeal because they are not satisfied with the results. About 4% of those cases are upheld. Often, that is a case of more medical information being brought forward. I do not want there to be any appeals; I want to make sure we make the decisions right first time. That is why we put in place independent reviews and put in a huge amount of work to improve the work capability assessment and improve the benefit. [Interruption.] From a sedentary position, people are shouting out, “How long is the waiting time for appeals?” [Interruption.] I think the custom in the House is that Members rise to their feet to ask a question. [Interruption.]

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

Order. Lots of Members want to get in. We need short and accurate answers.

[Sarah Newton]

I want to come on to answer the question about the waiting time for appeals. That is the responsibility of the Ministry of Justice. I am working very carefully with the MOJ to reduce the amount of time people have to wait for appeals. It is coming down. In the last set of statistics I saw, it had come down by 9%. Over 200 judges have been recruited to the tribunal service, so we can see improvements—

[Mr Deputy Speaker]

Order. Can I just say that it is not fair to keep going? I am sure there will be a written question to which there will definitely be an answer.

[Deidre Brock (Edinburgh North and Leith) (SNP)]

Will the Minister confirm that the money will not come from existing budgets? Will she also make representations to the Chancellor to ensure the extra spending will not impact on additional spending urgently needed in other areas, such as universal credit?

[Sarah Newton]

I very much want to confirm that there is no impact on any of our existing benefits claimants. For anybody who is on benefits now, their money is not impacted by this whatsoever. We are absolutely making sure we have the right resources, both in staff and in paying out these benefits. It will not have an adverse effect on existing claimants.

[Diana Johnson (Kingston upon Hull North) (Lab)]

Due to the serious nature of this issue, I am surprised that there has had to be an urgent question, not a ministerial statement. I am also disappointed that the Secretary of State is not here, because of the seriousness of the situation. Thirdly, I am very disappointed that the Minister is talking about action at pace, when it seems that it will be months and months and months ahead before this will be resolved. My question is this: what is the impact of disability premiums on tax credits? Will they also be repaid by Her Majesty’s Revenue and Customs?

[Sarah Newton]

Let us be clear: the Secretary of State came to the House last December and we have made a series of statements. Just yesterday, there was a written statement. We have put out information. The choice of urgent questions is a matter for Mr Speaker; it is not a matter for us. We have regularly updated the House with written ministerial statements. We had oral questions on Monday, so there was the opportunity for Opposition Members to raise these questions then. There was an opportunity again during yesterday’s debate. We are regularly in this House. We are absolutely accountable to Parliament and will continue to update the House regularly.

[Fiona Onasanya (Peterborough) (Lab)]

For the record, as stats were published yesterday, this could not have been raised on Monday. The Secretary of State advised that the disabled would be better off under universal credit. Where can those calculations be found? Other statistics have shown that the disabled will be worse off—this affects 750,000 people. Furthermore, constituents have written to me regarding work capability assessments and feel that leading questions have been asked and wrong decisions made on claims. However, the Minister said that on ESA, the Government have tightened what they are doing now, things have been looked into and they are trying to make it more streamlined and more consistent. On the question asked by my right hon. Friend the Member for East Ham (Stephen Timms), I would like to know what safeguards are in place to ensure that vulnerable people are protected and assessments are fair.

[Sarah Newton]

The work capability assessment was at the heart of the hon. Lady’s question, and it has been the subject of consultations and huge amounts of stakeholder engagement. We are absolutely determined to continuously improve the work capability assessment. Healthcare professionals who undertake the assessments are all medically qualified and they are all trained. We have a huge amount of stakeholder engagement working with us constantly to improve the work capability assessment and in fact, the whole claimant journey through ESA.

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

I call Melanie Onn.

--- Later in debate ---

[Sarah Newton]

I reassure the hon. Lady, if she has any doubt in her mind, that we take this matter extremely seriously. We want to make sure that everybody who is underpaid gets their payment as soon as possible. We absolutely have to get this right. We talked about how vulnerable some people are and the complexity. It is really important that we get this right. There is a lot of legislation around official error and the laws that apply to underpayments and how they should be repaid.

The hon. Lady has raised a specific case that I am not familiar with, so the best thing to do is for me to write to her on that specific case, because I do not want to mislead the House in any way.

[Alison Thewliss (Glasgow Central) (SNP)]

A constituent of mine, a young woman with fibromyalgia, had her ESA stopped and was told by the DWP to move over on to universal credit while waiting for a mandatory reconsideration. My understanding is that if she had done so, she would not be able to move back on to ESA even if the mandatory reconsideration was successful. How are people being tracked through this labyrinthine system and how certain is the Minister that everybody will get back-payments who is entitled to them, particularly if they have moved from one benefit to another over this period?

[Sarah Newton]

It is always very difficult to comment without the full details of the specific case. As the hon. Lady knows, I am always happy to meet Members of the House and go through particular cases. If I may talk in general terms, ESA within UC is the same: people apply, they have a work capability assessment and they are assessed. I reassure her that the process is the same and that if the Department makes mistakes, we do back-pay, as we have heard today. But let us meet on that specific case, so that I can give her the best possible advice for her constituent.

[Chris Elmore (Ogmore) (Lab)]

The Minister’s apology is welcome, but it brings little comfort, as she will appreciate, to anyone who has been affected. At least she is acknowledging that things could be resolved.

There has been much talk today across the House about whether this is our fault or the Government’s fault, and everything else. I make the point to the Minister that in September last year a UN report on the Government’s policies on disabled people by the Committee on the Rights of Persons with Disabilities said that those policies were creating a “human catastrophe” for disabled people. That is something that has never been put to a Labour Government. Does she not understand that this massive underpayment of ESA is only reinforcing the fact that the Government are destroying disabled people’s lives?

[Sarah Newton]

I utterly reject the suggestion that we are destroying the lives of disabled people. We did not agree with the United Nations at the time, because we did not think that it had taken into consideration all the evidence that we had given to it. I published a full response to the UN, which I hope very much that the hon. Gentleman will read. It is in the Library, and it shows the huge amount of support that we are giving to disabled people.

Benefits for disabled people in our country have never been higher, but we are not at all complacent. We know that there is more to do. I want all disabled people in our country to be able to live their lives independently and play their full part in society, and we will continue to ensure that that is the case.

[Jessica Morden (Newport East) (Lab)]

A constituent who rang my office this morning was concerned that if they received the money that was underpaid, it might then be clawed back from other benefits. Will the Minister confirm that that will not happen?

[Sarah Newton]

That is a very good question, and I can assure the hon. Lady’s constituent that it will not happen. The full details are in the “frequently asked questions” section in the Library.