MP: Complacent DWP pensioners failed, while his watchdog commission issues ‘blistering’ report on state-pension ‘fiasco.

Peter Grant MP:  'Even from a committee that’s no stranger to giving Government departments a hard time, this is a blistering report'

Peter Grant MP:  ‘Even from a committee that’s no stranger to giving Government departments a hard time, this is a blistering report’

Peter Grant MP is the representative of Glenrothes in the Scottish National Party and sits on The Public Accounts Committee, which examined the state pension scandal.

Tanya Jefferies and Sir Steve Webb from This is Money reported to the Department for Work and Pensions several instances in which it seemed that state pensions were being underpaid.

Each case was examined by the Department individually and corrected. The Department concluded they were isolated.

It was not apparent that the problem is more widespread. 

Despite repeated requests from Sir Steve Webb (a former Pensions Minister), the DWP maintained its position for another seven months.

The scale of this fiasco was finally revealed by the government in August 2020. Some 134,000 pensioners had been underpaid a total of over £1billion.

Some of these errors were made over 35 years. The underpayments ranged in size from pennies to over £128,000.

According to the DWP there are approximately 15,000 retired people who can’t or won’t be identified, as well as those who have passed away and whose family members cannot be located.

Fixing the problem is likely to cost an additional £23.4million in administrative costs, with 500 extra staff being recruited.

Even though the corrections were not an easy task, they went well.

Many of their best-known staff were moved to this area to fix the problem. This led to other areas of the organization being unable to handle their workload. It was also a contributing factor to 2021’s thousands of pension recipients having to wait months for their first payment.

The National Audit Office also audited accounts of the DWP for 2020/21 and found nearly seven percent of corrections were incorrectly calculated.

The Public Accounts Committee released a report this week into the shaming shambles that chair Meg Hillier MP called a “shameful mess”.

This report is shocking, even though it comes from a committee known for giving difficulties to government departments.

The DWP has been accused of relying on IT systems not designed for their purpose for many decades; of a ‘fundamental control failure’ when it comes to paying pensioners the right pension. It is also accused of failing pensioners by its complacency and a dearth of transparency for Parliament regarding the extent of underpayments.

Are you a recipient of a backpayment from the state pension? 

Learn more about the tax that you may have to pay and how it might affect your benefits or care expenses.  

I was struck by the fact that the Committee took evidence from Department after it had been completed.

The system had an extremely low historical error rate so they didn’t do any actual testing.

It had very few (identifed) errors, as nobody looked hard enough for them.

Prior to January 2020’s approach by This is Money, the Department identified only a few errors eight times. But even after that eighth occasion they felt it was unnecessary to do a comprehensive check of the entire system.

It was inexcusable that the Department didn’t recognize the symptoms of major systemic failure sooner. This will have inevitably led to even more pensioners losing their lives before they could get the money rightfully theirs.

After listening to the Department’s explanation, the members of the committee were concerned that there was still not enough information about the human costs of this organizational disaster.

The error, in pure accounting terms, was only a small percentage of total pensions bills. But for thousands of pensioners it would have had a devastating effect.

When the Department said it wasn’t their concern to examine the side effects that a major backpayment could have on a pensioner, we were not reassured. For example, it could have an impact in certain parts of the UK in which a pensioner’s income and bank balance are a key factor in determining what they need to contribute to the cost of their care.

This may be the biggest thing that can be done to end the sorry episode.

It’s easy to forget about the people in the complex machinery that is the Department for Work and Pensions, or any other Department. Their lives could be seriously affected if it goes wrong.

You can’t be satisfied with ‘low percentage errors rates’. Keep in mind, however, that each one has a name and faces and the error rate for each is 100 percent. 

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