MPs call for a Welfare Commission to create a fairer benefits system

09 February 2010

MPs call for the establishment of a 'Welfare Commission' to create a fairer and simpler benefits system that claimants can understand and the Department of Work and Pensions (DWP) can administer more accurately.

The Work and Pensions Select Committee today releases its report, 'Decision making and appeals in the benefits system'.

The Report concludes that the vast majority of decisions DWP makes are accepted by claimants and lead to the right benefits being paid on time to those who are eligible. However, whilst the 1998 reforms can be measured as successful in as far as the Department has met all but one of its targets for payment accuracy and clearance rates, the Report notes that the level of official error in the benefits system has increased substantially since 2000–01.

The level of overpayments due to official error have risen from £0.4 billion (0.4 per cent of benefits paid) to £0.8 billion (0.6 per cent of benefits paid) over this period. Although the Department has made great strides in reducing fraud, this increase in error should be a cause for concern, the Report says.

It also highlights a worrying lack of response to scrutiny of the decision making and appeals (DMA) system by DWP. The Report calls for the establishment of a Welfare Commission to create a system which claimants are able to understand more easily and DWP staff are able to administer more accurately.

Terry Rooney MP, Chairman of the Committee, said

"Poor decision making not only costs the Department in wasted over-payments, and costs claimants in under-payments, but also generates more costs further down the line in reconsiderations and appeals.

"An increased focus on the quality of decision making to match the Department’s successful focus on fraud could have a very significant effect in reducing the cost to the Tribunals Service of hearings on benefit appeals.

"We do not underestimate the difficulty of the task facing decision makers across DWP’s businesses. The complex rules that govern the social security system increase the scope for both customer and official error and the challenge of decision making accuracy.

"We have previously recommended that DWP establish a body to examine complexity in the benefits system. Today we reiterate this recommendation: that the Government establish a Welfare Commission to examine the existing benefits system and model possible alternative structures with the aim of creating a fair but simpler system, which claimants and their representatives are able to understand more easily and DWP staff are able to administer more accurately."


The 1998 Act introduced monitoring arrangements to ensure that the DMA system was operating effectively. However, during the course of its inquiry the Committee discovered that, contrary to undertakings given during the passage of the Act, the Secretary of State has not produced an annual report on decision making since 2006.

Members were particularly concerned by evidence from former President of the Appeal Tribunals, Judge Robert Martin, who felt his reports were effectively ignored, as well as evidence that the Standards Committee lacks influence. Today’s Report calls for a much more constructive response to such scrutiny.

Terry Rooney said:

"We are particularly concerned that the Department doesn’t appear to take scrutiny of the decision making and appeals system seriously enough. If it is to improve on its performance in respect of official error, it must listen and respond to criticism."

Jobcentre Plus

The Report highlights a lack of data on claim clearance rates, payment accuracy and the reconsideration process for Jobcentre Plus benefits. This paucity of data led the Committee to conclude that DWP is not adequately assessing decision making in Jobcentre Plus, making it difficult for the Department to identify ways to improve the DMA system.

Terry Rooney said:

"We were particularly alarmed at the lack of data available to assess decision making at Jobcentre Plus and call on the Department to both explain this and start collecting and publishing such data as a matter of urgency. We hope that, once these statistics are available, our successor Committee will be able to re-visit this issue."

The Reconsideration Process

The Report also notes that one important element of the 1998 reforms that does not appear to be working as intended is the reconsideration process. This process should enable decision makers to take account of new evidence submitted by claimants and provide for a means of reviewing decisions to provide claimants with a quick resolution, relieving some of the burden on tribunals.

The Committee is concerned that the way the process is currently operating represents a missed opportunity. In particular, evidence the Committee received suggested that DWP computer-generated letters do not clearly explain the specifics of decisions, which means that some claimants were unable to understand why their claim had been rejected. The Report calls for greater efforts to explain the rationale behind decisions, which could reduce the numbers of appeals that are lodged.

Terry Rooney said:

"Many claimants will be deterred from an appeal by an unsuccessful request for a reconsideration. Our greatest concern is that, if this reconsideration is not being conducted thoroughly, they may miss out on benefits to which they should be entitled.

"The reconsideration process should be a way of reviewing decisions which provides a swift, understandable resolution for claimants and also reduces the caseload of the tribunals. Something as simple as better communication to explain decisions could go a long way to help."

Image: iStockphoto

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