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4. July 2012

Costumer focus

A case for administrative simplification: The proliferation and complexity of ombudsman schemes in the UK

Recently, members of the Governance International team have been working with a number of EU candidate and EuroMed countries on service charters, citizens’ access to effective complaints mechanisms and independent redress. So what is happening on this front in the UK? While customer redress is not one of big governance issues currently in the headlines, the Open Public Services White Paper has pledged to establish whether all services are appropriately covered by Ombudsmen and whether Ombudsmen have the resources and powers of enforcement that they need. 

A guest blog from Peter Tyndall, Public Services Ombudsman for Wales, discusses the effects of privatisation and new service delivery models on redress schemes in the UK. He proposes that access to redress should be made less complex than is currently the case.

Since 1979 many services formerly in the public sector have been privatised – power companies, water, phones and public transport amongst them, sometimes collectively referred to as the networked services.  Under successive governments we have seen a large proportion of council housing sold to its tenants or transferred to housing associations and parts of the state healthcare sector being outsourced to private companies. In England many schools are now outside of local government control.  Most residential homes for older people are now privately provided, whereas in the past many were provided by councils.

What’s this got to do with ombudsmen you might ask?  Well, while all services are provided by the state, there is little issue about access to redress.  However, when services are privatised, then access to redress can be lost.  In some ways, you can argue, that it begs a question – if the railways, for example, are run by a private company, do they stop being a public service?

The development of ombudsman services in the UK reflects the changing face of public services, and also, the devolution of power to Northern Ireland, Scotland and Wales. The first ombudsman service was the UK Parliamentary and Health Service Ombudsman founded in 1967, followed in 1969 by the Northern Ireland Ombudsman and the Local Government Ombudsmen, now covering England only. 

There followed a series of ombudsman institutions covering banks, insurance and other parts of the financial sector.  These have since been consolidated into the Financial Ombudsman Service.  This has a statutory basis, its existence is established by law and providers must participate.  A key distinction is that funding for the service is provided by the industry, and not by the state.  We have also seen the development of private sector ombudsman schemes for telecommunications and for energy as these industries were privatised.  These schemes were approved under legislation.

It is evident that the boundaries of the state are becoming more porous. In health, where the state commissions private or independent sector providers, the services they deliver are within the remits of the public sector ombudsmen. This principle has been described as following the public pound. In social care, while many older people in residential homes have their care paid for by local councils, for those people who can meet the cost of their own care, there is no subsidy.  The Local Government Ombudsman service in England has had its remit extended so that people who pay for their own care can still complain to the ombudsman if they cannot resolve their concerns locally and I expect my own remit to be extended in this way soon.  This is an example where an entirely privately funded service is within the remit of a public services ombudsman. 

The net effect of all of these developments is a far more complex network of ombudsmen spanning both existing public services, and former ones, funded by a mixture of grant and levies.  Some sectors now have more than one ombudsman, while others such as transport, now have no access to an ombudsman at all.

The creation of Ombudsman Association can also be seen as a response to the complexity.  One of the key risks of diversification is the loss of a consistent approach to standards. The Ombudsman Association works hard to restrict the use of the ombudsman title to schemes which meet the key criteria - independence; fairness; effectiveness; openness and transparency, and accountability.

From the citizen’s perspective, the rapid expansion in redress schemes, described in one publication as “ombudsmania”, presents its own challenges.  When all public services are provided and delivered by the state, it’s easy to know where to complain.  However, as more and more are delivered by the private or independent sectors, finding your way through to the appropriate ombudsman scheme can be more of a challenge.  All UK public sector schemes report increasing amounts of signposting activity, where they help to direct callers to the appropriate body.  In the case of my own office, as Public Services Ombudsman for Wales, we have explicitly developed a new service – Complaints Wales.  This provides a dedicated telephone hotline and website which tells people how to complain about public services, even where they are now provided by private companies.  It helps to direct callers to either the service provider or, if they have already complained to them unsuccessfully, to the appropriate ombudsman.  

So what can we conclude about the impact of diversity in public service providers on the work of ombudsmen?  The proliferation of ombudsman schemes has made it more difficult for service users to access redress, and threatens uneven standards.  The Ombudsman Association has helped to tackle this, but in retrospect, it is worth reflecting whether the public services ombudsmen should have had their remits amended to include all public services, regardless of how they are provided.  A proliferation of schemes is not the best way to serve the public.  However, where schemes are covering privately provided public services, there is a strong case for arguing that this element of their work should be funded by a levy.

In the UK, it is also the case that in general, public services ombudsmen make recommendations and do not have binding powers, while private sector ombudsmen do.  In a hybrid model, it is likely that binding powers, at least in respect of private providers, will be necessary.  

It is not appropriate to turn back the clock in the UK.  However, we do need to work to ensure that all users of previously privatised public services have access to an independent ombudsman scheme. The same applies to new service delivery models such as mutuals and co-operatives. I would contend that this should be through one of the existing ombudsmen, and not through the creation of new schemes.

New EU proposals are likely to impact on the purely consumer schemes, and the Ombudsman Association should again work to avoid proliferation.  Competition between schemes serves to damage the interests of consumers, as companies will tend to choose the ombudsman they perceive as being least likely to uphold complaints or to insist on redress.  Once again, we need to work to extend access by broadening the reach of existing schemes.

The Executive of the Ombudsman Association has been considering these issues for some time, but often in response to issues raised by applications for membership and Government initiatives.  They are now developing a formal policy statement and plan to use it to promote rational and comprehensive coverage of ombudsman schemes in the public and private sectors in the UK and in Ireland.

It is the job of the state to ensure that citizens have access to public services.  It is also widely accepted that citizens should have access to independent redress in the shape of ombudsmen.  Complexity in service provision should be counterbalanced by simplicity in accessing redress.

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