PHSO ‘disappointed’ by DWP decision not to pay WASPI women State Pension age compensation

The Parliamentary and Health Service Ombudsman (PHSO), Rebecca Hilsenrath, has said the UK Government’s apology to 1950s-born women affected by changes to their State Pension age is “very significant” but its decision “not to accept the recommendations in full” of the final report, is “disappointing and will have been hard for the women to hear”.

Ms Hilsenrath also said that throughout the PHSO’s six-year long investigation, the DWP “indicated it would not comply with our recommendations and that is why, nine months ago, we asked Parliament to intervene.” On Tuesday, Secretary of State for Work and Pensions Liz Kendall announced that there will be no compensation for an estimated 3.5 million women.

READ MORE: WASPI women taking new legal advice after State Pension age compensation decision

READ MORE: DWP confirms no State Pension age compensation for millions of WASPI women

The PHSO’s final report, published on March 21, stated that “Parliament must urgently identify a mechanism for providing that appropriate remedy” and recommended compensation equivalent to level four on its banding scale, which is worth between £1,000 and £2,950.

Shortly after Ms Kendall’s statement to MPs in Parliament, Ms Hilsenrath released an official response from the Ombudsman’s office, which said: “The Secretary of State for Work and Pensions has responded to recommendations made following our investigation into DWP's communication of changes to women's State Pension age.

“The Government’s apology to the women affected by its failure to communicate about State Pension age changes is very significant and it is sad that women had to wait so long to hear it - sadder still that for many it came too late. I welcome the Government’s recognition that mistakes were made, and the commitment from the Secretary of State to make sure this never happens again.

“We look forward to hearing more about the action plan to take this work forward and we are ready to work with the Government to support change.”

The Ombudsman added: “However, the Government’s decision not to accept our recommendations in full is disappointing and will have been hard for the women to hear.

“Our role as a Parliamentary body is to support Parliament to hold the Government to account. Throughout this investigation, DWP indicated it would not comply with our recommendations and that is why, nine months ago, we asked Parliament to intervene.”

Campaigners branded the decision not to award compensation “bizarre and totally unjustified”. The Labour Government is also facing a barrage of criticism from MPs over the decision, some of which is coming from within its own party.

Former pensions minister Sir Steve Webb said the handling of the issue “sets an extremely worrying precedent”.

Angela Madden, chairwoman of Women Against State Pension Inequality Campaign (WASPI) said: “The Government has made an unprecedented political choice to ignore the clear recommendations of an independent watchdog which ordered ministers urgently to compensate WASPI women nine months ago.

“This is a bizarre and totally unjustified move which will leave everyone asking what the point of an ombudsman is if ministers can simply ignore their decisions.”

She described an action plan to avoid such mistakes in future as “an insult both to the women” and to the investigation previously carried out by the PHSO into how changes to the State Pension age were communicated.

Ms Madden said: “An overwhelming majority of MPs back WASPI’s calls for fair compensation and all options remain on the table. Parliament must now seek an alternative mechanism to force this issue on to the order paper so justice can be done.”

The UK Government said it has accepted the Ombudsman’s finding of maladministration and has apologised for there being a 28-month delay in writing to 1950s-born women. But it said evidence showed only one in four people remember receiving and reading letters that they were not expecting and that the great majority of 1950s-born women did know that the state pension age was changing.

Ms Kendall said a blanket compensation scheme, which could cost taxpayers up to £10.5 billion, cannot be justified. It would also be impossible to deliver a tailored compensation scheme taking into account individual circumstances that is fair, value for money and feasible, it added.

Ms Kendall said: “These two facts: that most women knew the state pension age was increasing and that letters aren’t as significant as the Ombudsman says, as well as other reasons, have informed our conclusion that there should be no scheme of financial compensation to 1950s-born women, in response to the Ombudsman’s report.”

She added: “The alternative put forward in the report is for a flat rate compensation scheme, at level four of the Ombudsman’s scale of injustice, this would provide £1,000 to £2,950 per person at a total cost of between £3.5 billion and 10.5 billion.

“Given the vast majority of women knew the state pension age was increasing, the Government does not believe paying a flat rate to all women at a cost of up to £10.5 billion would be a fair or proportionate use of taxpayers’ money.”

Labour MP Brian Leishman said he was “appalled” at the decision to not provide financial compensation to the Waspi women.

The MP for Alloa and Grangemouth told the Commons: “Firstly I’d like to say I’m appalled at this announcement and I have campaigned with Waspi women, as have many parliamentary colleagues, and this is an incredible let down.

“WASPI women, in my opinion, certainly do not need words of disappointment and they certainly do not need hollow statements. What they need is justice. Does the Secretary of State not agree with that?”

Ms Kendall said: “I believe that this is a difficult decision but the right and fair one.”

She offered to meet Mr Leishman to discuss the matter further.

Sir Steve Webb, a former Liberal Democrat pensions minister who is now a partner at pension consultants LCP (Lane Clark & Peacock) said: “The Government’s handling of this issue sets an extremely worrying precedent.

“If it is acceptable for a department to completely reject the findings of a report by the independent Parliamentary Ombudsman, this strikes a blow at the heart of the whole process.

“There is a risk that governments will now feel emboldened to ‘pick and choose’ when faced with a critical Ombudsman report, effectively setting themselves up as judge and jury.

“Even if the Government felt it could not afford to implement the recommendations in full, there were many options which would have offered some redress to those most affected. Outright rejection of the Ombudsman’s report raises much wider issues than compensation over pension age changes, and MPs should not take this decision lying down.

“The fact that many of the women affected will also be coping with the loss of their Winter Fuel Payment this year will intensify their sense of injustice.”