Report

by the Comptroller
and Auditor General

Cross-government

Public service markets: Putting things right when they go wrong

HC 84 Session 2015-16 17 June 2015

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Report by the Comptroller and Auditor General

Ordered by the House of Commons
to be printed on 15 June 2015

This report has been prepared under Section 6 of the National Audit Act 1983 for presentation to the House of Commons in accordance with Section 9 of the Act

Sir Amyas Morse KCB
Comptroller and Auditor General
National Audit Office

12 June 2015

This study examines the complaints and redress system in public services, with a particular focus on parts of the public sector where the government has given users greatest choice.

© National Audit Office 2015

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10756 06/15 NAO

The National Audit Office study team consisted of:
Stephanie Bryant, Toby Coaker, Charlie Gluckman, Dimitris Korres, Charles Nancarrow and Ivan O’Brien, under the direction of Joe Perkins.

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Key facts

Summary

1 The government has expanded user choice in public services, aiming to improve quality and make services more personalised and responsive to users’ needs. Users have more discretion to choose their provider in public services, particularly in care services, education and health. For example, in 2014 the government spent £2.9 billion on education for 2- to 4-year-olds (the early years entitlement) and £3.3 billion on personal budgets for adult social care users.

2 Having user choice and market-based provision in public services brings risks and opportunities for value for money. Where markets work well, providers are incentivised to offer good-quality services that meet users’ needs and poor-performing providers leave the market. However, markets can often fail, for reasons including poor information on service quality, difficulties in changing providers and limited competition. This is particularly so in public markets and is why the government often intervenes. User complaints are an essential part of getting value for money, since they can lead the user to gain redress for any detriment suffered and encourage service providers to improve.

3 Many bodies are involved in the complaints and redress system, which typically has at least two tiers. The first tier is local resolution, where complaints are raised with the public or private provider and, where relevant, with the commissioning body. The final tier is escalation to an independent review, usually by a public service ombudsman. This tier is intended for users whose complaints have not been remedied at the local level.

4 Outside of these arrangements, other publicly funded bodies have an interest in complaints and redress, including:

advocates such as Citizens Advice;

regulators such as Ofsted and the Care Quality Commission, who can use complaints data to inform inspections and other interventions; and

government departments who oversee public policy. The Department for Business, Innovation & Skills has overall oversight of consumer issues. The Cabinet Office has general oversight regarding policy on public service complaints and public service ombudsmen, while the Department of Health oversees health complaints policy.

5 The principle of users complaining to an independent ombudsman and seeking redress first began in the public sector in the 1960s. There are two main public service ombudsmen in England. The Local Government Ombudsman (LGO) has jurisdiction over local authorities in England and registered care providers; it is sponsored by the Department for Communities and Local Government. The Parliamentary and Health Service Ombudsman (PHSO) can investigate complaints about government departments and their agencies, other public organisations and the National Health Service in England; it is directly accountable to Parliament. Together, they cost £48.5 million annually. Other public service ombudsmen cover complaints about social housing, higher education institutions and the police. Several ombudsmen cover private sector markets.

6 The Cabinet Office oversees public service reform, working in partnership with other government departments. In March 2015, it published a review of ombudsmen arrangements setting out some challenges for the public service ombudsman landscape and making recommendations about potential reforms. In May 2015, the government announced that it intends to introduce a Public Services Ombudsman Bill to set up a public service ombudsman in England. This will absorb the functions of the PHSO, the LGO, and potentially the Housing Ombudsman. This follows work undertaken by the Public Administration Select Committee, the PHSO and the LGO recommending reforms to complaint systems and ombudsmen arrangements.

Scope of this report

7 In this report we assess the complaints and redress system for public service users who have experienced service failures. We do not look at redress for other problems such as appeals against school allocations. We focus on parts of the public sector where the government has given users most choice, in particular adult social care and early years education, and therefore where user behaviour is vital in achieving value for money. We also examine the overall experience of users in complaining about public services, meaning that the report has relevance to the entire system of complaints and redress.

8 We assess:

how complaints and redress help to improve service delivery and describe the main bodies involved (Part One);

the consumer experience in complaining and seeking redress (Part Two); and

how well public bodies use complaints and redress data to improve services and systems and the satisfaction of users (Part Three).

Key findings

Effective complaints and redress systems

9 In 2014 around 10.6 million users across the UK (approximately 1 in 5) had a problem with using a public service. The problems users had ranged from quite straightforward issues, such as the type of food in care homes or an early years setting, to serious and life-threatening safeguarding issues. We estimate that some 320,000 users had problems in adult social care, with the most prominent issues being poor quality of service, communications and service management. Of the 10% of childcare users who experienced a problem, common issues were quality of advice, safety concerns and service quality. Consumer satisfaction with public services is below most comparator sectors in the private sector (paragraphs 2.2 and 2.3, Figures 3, 4 and 5).

10 The complaints and redress landscape is complex, consumers find it difficult to navigate and there are gaps in the system.

Over many years, government has established ombudsmen and complaints bodies in various parts of the public sector, each with different legislative provisions, protocols and powers. There are different processes for complaining about central government, local government and the NHS. Finding out how to complain was difficult for 47% of complainants in health and care (paragraphs 1.7 to 1.9, 2.7 and 2.9).

Consumers find the system confusing, often have to deal with many different bodies and have low awareness of the key redress organisations. In health and social care, 1 in 4 people who did not complain after seeing or experiencing poor care did not know who to complain to. Around one-third of people contacting the ombudsmen initially contact the wrong organisation, and are redirected to another complaints body (paragraphs 2.8, 2.9 and 2.13 to 2.15).

There are several areas with no independent formal route to seek redress, such as complaints about academies or general quality of service issues in early years education provided by private or independent organisations (paragraph 2.19).

11 Consumers are much less likely to complain about a public service than a private service. Around half of consumers who have a problem with a public service go on to complain. In the private sector, 90% of consumers will complain to a high street retailer, bank or tradesperson, with 83% doing so in the energy sector. The main reasons that consumers do not complain about public services are that they do not feel it would be worth the effort (35%), or they think nothing can be done (35%) (paragraphs 2.4, 2.5 and Figure 6).

12 The complaints process can take too long to provide timely redress. In 2014, 36% of complainants spent more than a year trying to resolve their problem with their local authority, care provider or school before going to the LGO. An ombudsman investigation then takes, on average, a further 4 months to reach a finding. In complex cases, investigations can take more than a year to conclude. We examined some adult social care cases where the complainant was no longer alive to benefit from redress (paragraphs 2.17, 2.18, Figures 11 and 12).

13 Across public services only 31% of complainants were satisfied with the outcome of their complaint. The main reasons users were dissatisfied were because they lacked confidence that the complaint had been taken on board, or lacked feedback on what had happened after complaining. Financial redress is not intended to be punitive on providers and can be small. Of the 691 complaints upheld by the LGO in 2014, more than 80% involved financial redress of less than £500. Satisfaction with the performance of the individual ombudsmen is substantially higher (paragraphs 2.20 to 2.25, Figures 13, 14 and 15).

Using complaints and redress to improve services

14 There is poor central leadership to make system-wide improvements to the complaints process. Parliament has recently inquired into complaints handling in public services and ombudsmen arrangements, and many stakeholders we met during our review accepted the need for improvements. However, there is no overall coordination or leadership. Responsibility for different parts of the system sit with different parts of central and local government, each with different governance and accountability arrangements. The government is improving consumer complaints and redress in private markets (following the Consumer Rights Act and Alternative Disputes Resolution Directive) as a separate process from work in public markets. This is despite many public markets being mixed economies – with public and private funding and providers (paragraphs 1.13 to 1.15 and 3.4 to 3.6).

15 Public service organisations do not make enough use of complaints to improve services and there are serious impediments to doing so. Complaints intelligence and the ability to intervene are fragmented across the system, and neither the LGO nor the PHSO can enforce redress. There is no standard approach to recording or reporting on complaints. Data cannot be aggregated beyond each organisation to identify emerging trends in complaints, or analyse the user’s perspective. Despite some examples of good practice, data-sharing is irregular and informal. Public service organisations rarely take an active approach to gathering information about consumer concerns. While more than 90% of local authorities in the UK have Twitter accounts, neither they nor other complaints and redress bodies use social media to gather consumer views (paragraphs 3.8 to 3.19).

Conclusion on value for money

16 Effective consumer complaints and redress systems enable providers to be held accountable, improve quality, and identify failure and malpractice. Around 10.6 million users (1 in 5) had a problem with a public service in 2014. And serious detriment can occur. If government took the power of complaints and redress to improve public services seriously, it would recognise that the present landscape is incoherent and dissatisfying to users, and would show urgency in reforming and rationalising the system. At present the complaints and redress system cannot be regarded as good value for money.

Diagnosis and recommendations

17 Public service providers and their commissioners frequently see complaints as an embarrassment, rather than information to help them improve. This is reinforced by incentives and reporting structures that can encourage them to downplay or attempt to dissuade complaints. Fragmentation of complaints bodies makes it hard for information to reach the organisations that can make use of it, and means that consumers can be frustrated in their attempts to gain redress. Our recommendations aim to achieve substantial change in these structures. If implemented rapidly, they could provide important assistance in improving public services for users.

18 The Cabinet Office should:

a Nominate an authority within government to manage reforms. The nominated authority should have the governance and mandate to change the complaints and redress system. It should have a mandate to consider how to integrate the redress system in public markets with that in private markets.

The Cabinet Office should work with Whitehall departments including the Department for Communities and Local Government, the Department for Business, Innovation & Skills, and the Department of Health to:

b Ensure that service users can access redress easily and increase consistency in complaints handling across ombudsmen and other complaints bodies. It should remove gaps in providing redress and assess how the system as a whole can become more integrated in light of recent proposals for a single ombudsman for England.

c Make the complaints and redress system easier to navigate for consumers. Many consumers who have problems with public services do not complain. They are vulnerable, cannot navigate the system and find the process lengthy and unwieldy. Better signposting could help consumers, particularly those who are vulnerable, to get consistent support when they complain.

d Review the effectiveness of complaints-handling arrangements for private providers where they receive public money. Currently, public authorities are unable to enforce complaints-handling standards or levels of redress from private providers and have been using tools such as commissioning mechanisms to influence provider behaviour. This review should consider the effectiveness of these approaches, possibly involving the behavioural insights unit, against a more formal enforcement approach.

The ombudsmen should:

e Encourage better collection and use of complaints data across the system, to improve quality. The incentives on many complaints bodies within the system work against a culture that welcomes complaints. The ombudsmen should work with public service leaders to set out best practice. This should include consideration of reporting arrangements to encourage a positive culture towards complaints, and introducing data standards to use complaints more, as intelligence. The ombudsmen should work with the bodies in the complaints system to use social media to understand where problems occur.

Local authorities and government departments should:

f Ensure that council executives and departmental boards review their own complaints and complaint handling as a matter of course, and that complaints handling meets best practice. The ombudsmen have outlined best practice for handling complaints, and authorities can also learn from each other. However, there are wide variations in the quality of complaints handling across local authorities. This limits opportunities to improve services and reduces user confidence in the system.

Part One

Redress and value for money

1.1 In this part, we set out how complaints and redress could improve value for money within public services. We describe how bodies handle complaints, provide redress and ensure that complaints help to improve quality.

Value for money

1.2 From the early 1990s onwards, governments have expanded market mechanisms and user choice in public services, particularly in healthcare and education. One of the main aims in allowing users choice over their provider is to make services personalised and ensure that providers respond to users’ needs. Public markets are now prevalent in many public services such as adult care, education, skills training, early years education, family services, and health and social housing.

1.3 We have published two principles papers on achieving value for money from public service markets.1 One of the main requirements is that users have effective ways to complain and seek redress if services fail or are poorly administered. This is particularly important in public markets as users are often vulnerable (for example, having a serious health condition, or using very personal services such as childcare), and switching provider may not be viable.

1.4 For example, in our 2011 report on user choice in care markets, we found that elderly social care users often found it difficult to change providers and the Office of Fair Trading found that switching rates were very low. Switching was considered to be a last resort by most residents, particularly since switching homes can adversely affect the health of residents. In such circumstances, the provider has little incentive to improve services or provide redress for the user.2

1.5 Figure 1 shows the serious detriment that can occur when things go wrong, and how important complaints and redress are to identifying failures and possible improvements in public services and strengthening accountability. In this example, the care home failed to contact an ambulance when the complainant’s mother had a stroke. The complaint highlighted failings in accountability and led to recommendations for system improvements and a financial settlement. However, redress could not entirely remedy the failure, and the Local Government Ombudsman’s (LGO’s) remit does not extend to checking whether systemic improvements are effective.

1.6 Recent high-profile public service failures have highlighted potential problems when users’ complaints are ignored, or users have no route to complain. Prominent examples include the Francis report into failings at Mid-Staffordshire NHS trust, the Independent Inquiry into Child Sexual Exploitation in Rotherham and the Serious Case Review of Winterbourne View Hospital.3,4 In these cases, failures were compounded by people being unwilling or unable to complain, a culture of not taking complaints seriously and poor complaints handling.

The complaints and redress system

1.7 The complaints and redress system across public services involves many organisations including: service providers (local authorities or private providers); consumer bodies; regulators; government departments; and ombudsmen. Many bodies are involved in the complaints and redress system, which typically has at least two tiers. The first tier is local resolution, where complaints are raised with the public or private provider and, where relevant, with the commissioning body. Within this tier, the complainant may be able to escalate their case for independent review. The final tier is escalation to an independent review stage, usually by a public service ombudsman. This tier is intended for users whose complaints have not been remedied at the local level.

1.8 Outside of these arrangements, other publicly-funded bodies have an interest in complaints and redress, including:

advocates such as Citizens Advice;

regulators such as Ofsted and the Care Quality Commission, who can use complaints data to inform inspections and other interventions; and

government departments who oversee public policy. The Department for Business, Innovation & Skills has overall oversight of consumer issues. The Cabinet Office has general oversight regarding policy on public service complaints and public service ombudsmen, while the Department of Health oversees health complaints policy.

1.9 The purpose of redress, defined by the Parliamentary and Health Service Ombdusman (PHSO), is to remedy the injustice or hardship suffered. Where possible, it returns the complainant to the position they would have been in before the situation went wrong. We identified from stakeholder interviews and case file review several different types of redress hoped for by consumers, including:

An apology from the organisation.

Providing a service that should have been received at first.

Taking action or making a decision that the organisation should have done before.

Reconsidering an incorrect decision.

Improving procedures so that similar problems do not happen again.

Providing financial compensation for harm or distress caused.

1.10 The public sector established independent ombudsmen for users to complain to in the 1960s and extended them thereafter. This report focuses on complaints following service failures, and therefore includes the work of the:

Local Government Ombudsman, with 160 staff. It aims to “provide an independent means of redress to individuals for injustice caused by unfair treatment or service failure by local authorities, schools and care providers, and use our learning to promote good public administration and service improvement”; and

Parliamentary and Health Service Ombudsman, with 427 staff. Its statutory goal is to “investigate complaints that individuals have been treated unfairly or have received poor service from government departments and other public organisations and the NHS in England”.

Other public sector ombudsmen and complaints bodies cover complaints on social housing, higher education institutions and the police (Figure 2). Some ombudsmen, such as Ombudsman Services, are private bodies that cover only private sector markets, and fall outside the scope of this review.

Cost of complaints and redress

1.11 There is little information on the overall cost of the complaints and redress system. Most complaints are handled by service providers or local authorities. The wide variety of these bodies and their differing approaches mean that we have been unable to cost the complaints and redress system overall. However, we asked local authorities to estimate their cost per complaint. We found no authorities that routinely capture cost data, but from our sample we estimate that cost per complaint ranges between £250 and £1,100. Cost varies widely depending on the complexity of the subject, with a few cases costing much more.

1.12 It is more straightforward to estimate the costs of final-tier complaints. The LGO and the PHSO cost £48.5 million to run in 2013-14. The LGO handled 20,306 complaints in 2013-14. Its cost per complaint was £606 (down from £666 in 2012-13). The PHSO handled 27,566 complaints in 2013-14. Its cost per complaint was £1,228 (down from £1,239 in 2012-13).

Developments in redress

1.13 Parliament has taken interest recently in arrangements for complaints and redress. The Public Administration Select Committee produced two reports on the need for better complaint systems to improve public services and coherence in the ombudsmen system.5 In March 2015, the Cabinet Office issued a report by Robert Gordon on ombudsmen reform and launched a public consultation.6 In May 2015, the government announced that it intends to introduce a Public Services Ombudsman Bill to set up a public service ombudsman in England to absorb the functions of the PHSO (including dealing with complaints relating to matters reserved to the UK parliament), the LGO, and potentially the Housing Ombudsman. This follows work undertaken by the Public Administration Select Committee, the PHSO and the LGO.

1.14 The Department for Business, Innovation & Skills is implementing two pieces of legislation that cover consumer rights and redress in private markets. The Consumer Rights Act is aimed at simplifying consumer law and clarifying consumer rights, while the EU Directive on Alternative Dispute Resolution provides for all consumers in private markets to have access to redress.

1.15 In addition, the 2014 Care Act has some implications for consumer redress. It provides powers for the introduction of a user right to appeal against local authority decisions about their care and support. The LGO would still be expected to provide redress to users who are unhappy with the outcome of complaints heard at a local level.

Scope of this report

1.16 This report examines the complaints and redress system in public services, especially where there is greater user choice. We add to the work of previous reviews by taking a broader approach, focusing on the experience of consumers as they travel through the complaints system, rather than starting from current institutional arrangements. We therefore examine the work of many different organisations, including local authorities, government departments, regulators and the ombudsmen.

1.17 We focus on adult social care and early years education. These are two highly devolved markets where users have discretion over provider choice, meaning that user behaviour affects value for money. Of eligible adult social care users, 76% have a personal budget to choose services and providers to meet their assessed care needs. All 3- and 4-year-olds, as well as some 2-year-olds, can have 15 hours of free early years education per week. The government spent £3.3 billion on personal budgets and £2.9 billion on the early years entitlement in 2014. In addition, social care and early years education markets include substantial privately funded provision. We assess only the publicly funded components of these markets.

1.18 This report considers:

the consumer experience in complaining and seeking redress (Part Two); and

how well public bodies use complaints and redress data to raise accountability and improve services and systems (Part Three).

Appendix One outlines our audit approach and Appendix Two our evidence base.

1 National Audit Office Principles Paper, Delivering public services through markets: principles for achieving value for money, June 2012; and National Audit Office Principles Paper, Deciding prices in public services markets: principles for value for money, December 2013.

2 Comptroller and Auditor General, Oversight of user choice and provider competition in care markets, Session 2010–2012, HC 1458, National Audit Office, September 2011.

3 Rotherham Metropolitan Borough Council, Independent Inquiry into Child Sexual Exploitation in Rotherham, September 2013.

4 Margaret Flynn and South Gloucestershire Safeguarding Adults Board, Serious Case Review of Winterbourne View Hospital, August 2012.

5 HC Committee of Public Administration, More Complaints Please!, Twelfth Report of Session 2013-14, HC 229, April 2014; and HC Committee of Public Administration, Time for a People’s Ombudsman Service, Fourteenth Report of Session 2013-14, HC 655, April 2014.

6 Cabinet Office, A Public Service Ombudsman: a Consultation, March 2015.

Part Two

Consumer experience

2.1 In this part, we examine the consumer experience in complaining and seeking redress, and assess whether public complaints and redress systems provide for timely redress in the event of service failure.

Consumer problems and complaints

2.2 We analysed data from a Which? national survey in 2015 on consumer experience of public services, particularly when trying to resolve and remedy problems. Around 10.6 million consumers across the UK (approximately 1 in 5) experienced a service quality problem in 2014. Similarly, in 2014, an omnibus survey carried out by the Parliamentary and Health Service Ombudsman (PHSO) found that 22% of the UK population had experienced a problem in the previous 12 months.7 Our analysis of the Which? survey data found that 25% of adult social care consumers (some 320,000) and 10% of childcare users had a problem (Figure 3).8,9 On average, people are less satisfied with public service quality than with private sector markets. Public services are near the bottom of the UK Customer Satisfaction Index (Figure 4).

2.3 Consumers had problems spanning straightforward issues, such as the type of food in care homes or an early years setting, to serious and life-threatening safeguarding issues. Our analysis of Which? survey data found that users experienced problems with service quality and waiting times across public services (Figure 5). Common problems experienced in childcare included poor-quality advice and safety concerns. The most prevalent problems in social care were poor service quality and professionals’ communication.

2.4 Despite the many users experiencing problems, our analysis of Which? survey data found that 49% of those with a problem with public services did not complain. Recent research by Healthwatch (a national consumer champion in health and care) found that 3 in 5 who had or witnessed a problem with health or social care services in the past 2 years have not complained. These figures are much lower than in comparator private markets. Around 90% of consumers will complain to a high street retailer, bank or trades person if they have a problem, with 83% doing so in the energy sector.

2.5 The most prevalent reason for consumers not complaining is that they think it is not worth the effort or the complaint will not make a difference. Of users who did not complain, 35% felt it would not be worth the effort, and 35% thought nothing would or could be done by complaining (Figure 6). Research by the PHSO found that 42% of people who did not complain felt it would be pointless and not make a difference, while  10% did not think their complaint would be taken seriously.

Problems faced by consumers accessing redress

2.6 The complexity of the redress system, combined with an incentive structure which discourages complaints, causes users problems in 5 main areas:

Knowing who to complain to.

Difficulties in raising a complaint.

Navigating the sytem once a complaint has been raised.

Lack of timeliness in obtaining redress.

Gaps in the system.

2.7 Figure 7 shows the main bodies and relationships for complaints and redress in public services. It is not comprehensive but shows that consumers who want to complain must deal with a very complex system. There are many points of entry into the complaints system as well as many requirements for raising a complaint. For example, a service user must complain to their MP before approaching the PHSO – unless their issue is about the NHS, in which case they can approach the ombudsman directly, but only in writing. If the complaint is about a local authority service, the user can approach the Local Government Ombudsman (LGO) directly, as long as they have complained to the provider or authority first.

Knowing who to complain to

2.8 Consumers have a low level of awareness of the various relevant regulatory and public complaints authorities in our case study areas, with the exception of Ofsted. Our analysis of Which? survey data indicates that 47% of the general public had never heard of the PHSO, with an equivalent figure of 31% for both the LGO and Care Quality Commission (CQC). This is compared with only 4% who had never heard of Trading Standards, which deals mainly with private sector providers (Figure 8).

2.9 Service providers should direct users who want to raise a complaint to the relevant complaints body. However, Healthwatch England found that 47% of complainants in health and social care found it hard to find out how to complain and 1 in 4 people who did not complain after seeing or experiencing poor care did not know who to complain to. Many stakeholders we interviewed felt that providers fail to give sufficient information, such as details on how to escalate a complaint.

Difficulties in raising a complaint

2.10 In most public services the user must first complain to the provider. However, a recent Which? survey found that, in adult social care and childcare, a minority of consumers trusted that providers will act in their best interests (25% and 32% respectively).10 Users are often vulnerable and cannot realistically switch provider, so must continue with the provider that they complained about. Figure 6 shows that 14% of those not complaining about public services were worried that doing so would result in worse treatment. Healthwatch found the equivalent figure in care to be higher at 26%. The PHSO found that, in its jurisdiction, 52% of those that had complained were worried that their complaint would affect how they would be treated.

2.11 These concerns could be exacerbated by incentive systems which encourage local authorities to minimise the complaints they receive. Several local authorities we visited cited a high number of complaints as a risk to authority performance in their risk registers.

2.12 Furthermore, the LGO reports the number of complaints it receives about each authority compared with other similar authorities and complaints per head of population by authority. This approach risks creating the wrong incentives since, as the LGO itself notes, complaints may reflect a good complaints process and a positive complaints culture, rather than poor performance. Indeed, we found only a very weak relationship between ombudsmen complaint levels and overall service satisfaction. Local authorities suggested that other measures could be more effective in providing accountability, such as response times to complaints.

Navigating the system

2.13 Potential complainants find the complaints and redress system difficult to navigate once they have decided to complain. The system’s complexity was a constant issue in our stakeholder interviews. Many users either contact the wrong complaints body or approach it too early. We estimate that at least 20% of the contacts the LGO received in 2014 were for issues it could not deal with, with an equivalent figure of 33% for the PHSO. Our work-shadowing found that ombudsmen spend substantial time redirecting complaints to the right place in the complaints process.

2.14 Figure 9 describes the various different bodies that deal with complaints and redress in adult social care. Most complaints will involve the complainant having to contact more than one individual or organisation, with just 1 in 5 people being able to complain once to one person or organisation. Our case file review found that taking a complaint through the system can cause extra stress to already vulnerable users.

2.15 We examined the support that complainants receive in navigating the system. Around 1 in 5 councils offer a dedicated complaints support service for social care users. Other authorities said they provide a general advocacy service, but more than one-third provide no support services for those intending to complain about care quality. Under the 2014 Care Act, from April 2015 local authorities are required to provide independent advocacy support to care service users who have a ‘substantial difficulty’ in being involved in decisions about themselves and lack appropriate support. The PHSO found that, in its jurisdiction, only 28% of people who complained were offered support with their complaint by the organisation being complained about.

2.16 In early years education, a user can complain to Ofsted about a failure to meet the requirements of the Statutory Framework for the Early Years Foundation Stage (including education and safeguarding issues), the local authority if the complaint concerns the sufficiency of places, or the provider for general service quality issues (Figure 10). A 2014 Which? survey found that 48% of parents with children in a nursery or who have a childminder did not know who to complain to.11 The figure for first-time parents was higher at 56%.

Timeliness of redress

2.17 A key element of a well-functioning complaints and redress system is that user problems are dealt with in a timely way. This is particularly important in our case study areas because users of adult social care services often suffer deteriorating health, while early years education users do not use the service for very long.

2.18 Complaints can take a long time to resolve (Figure 11). In 2014, around 36% of complainants spent more than a year trying to resolve their problem with their local authority, care provider or school before going to the LGO.12 The LGO told us that in 2014-15, it completed 83% of its investigations within 13 weeks, 94% within 26 weeks and 99% within 52 weeks. We found that in 2013-14, the LGO took 4 months on average to decide adult social care cases.13 In some of the case files we examined, the complainant was no longer alive to benefit from redress (see Figure 12).

Gaps in the system of redress

2.19 Gaps in the redress system mean that consumers may fail to gain redress for the harm they have suffered. For instance, there is no independent ombudsman to recommend redress for users who experience problems with academies. By contrast, users of local authority-maintained schools have access to redress through the LGO on issues within its jurisdiction, such as complaints relating to admissions appeals. In early years, there is no access to independent redress for complaints on service quality, such as about the quality of food provided, unless the provider is the local authority. Although Ofsted takes note of user concerns about a failure to meet the requirements of the Statutory Framework for the Early Years Foundation Stage (including education and safeguarding issues), it does not provide independent remedy for problems suffered by users.

Consumer satisfaction with outcomes

2.20 We found that users are largely dissatisfied with the performance of the redress system. Only 31% of consumers who complained to an official body were ‘satisfied’ or ‘very satisfied’ with the outcome of their complaint and 38% were ‘not satisfied’ or ‘not at all satisfied’ (Figure 13). In social care, 33% of consumers who complained were ‘satisfied’ or ‘very satisfied’ with their response. Based on the total numbers who experienced a problem, this means that around 240,000 adult social care users (19% of all users) did not get a satisfactory outcome.

2.21 Satisfaction with the performance of the individual ombudsmen is higher. According to the report of the BMG Research survey (commissioned by the LGO), 50% of complainants were satisfied with the handling of their complaint by the LGO. The PHSO does not assess overall consumer satisfaction with its complaint handling, but it reports that in 2013-14, 64% of complainants whose complaints resulted in an investigation expressed satisfaction with its investigations.

Complaints not addressed, or worth the effort

2.22 Most dissatisfied users either lacked confidence that the complaint had been taken on board, lacked feedback on what had happened after complaining, or were disappointed with the level of redress. Figure 14 describes a case where a care home made no improvements after a serious complaint.

2.23 Across all public services only 36% of complainants felt their complaint had been taken on board by the service involved.14 Of those whose most recent problem was in adult social care, 44% felt it was taken on board. In our work-shadowing and stakeholder interviews there were many instances where users will not hear the outcomes of their complaint. This is particularly the case at the quality regulators, Ofsted and CQC, who invite user concerns but are not redress institutions and do not routinely provide information on how these concerns were addressed. Healthwatch found that 84% of users in health and social care would be more likely to complain if they had confidence that the complaint helped to develop the performance of staff and services.

2.24 Some stakeholders highlighted the low levels of financial redress when compared to other sectors, such as financial services, as a reason for dissatisfaction with the outcomes of redress. A general principle of complaints resolution is to remedy the service failure, for example through recommending changes in practice or policy. Where the complainant has suffered quantifiable financial loss this is normally recompensed, but remedy payments are usually small for distress or inconvenience caused.

2.25 We found that, of the 690 complaints upheld by the LGO in adult care and education services in 2014, more than 80% involved financial redress of less than £500 (Figure 15). Complainants are though able to pursue their cases in the courts even after an ombudsman’s judgment, meaning that they may ultimately receive larger financial settlements.

7 YouGov, on behalf of PHSO, interviewed 4,263 UK adults online between 31 March and 1 April 2015. Data were weighted to be demographically representative of the UK population.

8 Based on an adult social care user population of 1.3 million.

9 1.4 million 2-, 3- and 4-year-old children received funded early years education in 2014, suggesting that 140,000 experienced a problem.

10 Populus, on behalf of Which?, interviewed 2,100 UK adults online between 15 April and 16 April 2015. Data were weighted to be demographically representative of the UK population.

11 Populus, on behalf of Which?, interviewed 1,001 parents, resident in England, with children under 5 years and who were sole or joint decision-makers on childcare, between 13 December 2013 and 2 January 2014.

12 BMG Research report: Local Government Ombudsman Customer Satisfaction Survey 2014.

13 This excludes cases deemed premature or non-LGO related, which are decided on the same day.

14 Populus, on behalf of Which?, interviewed 4,132 UK adults online between 19 February and 23 February 2014. Data were weighted to be demographically representative of the UK population.

Part Three

Improving services

3.1 In this part, we examine how well organisations use complaints and redress to improve public services and consumer satisfaction, and the outcomes of the system as a whole.

Learning from complaints

3.2 The system of complaints and redress is one of several drivers to help improve public services, including regulatory interventions and intelligent commissioning. Our 2011 report on consumer protection, and the Committee of Public Accounts hearing, showed that consumer data, in particular complaints data, is vital for public authorities to gain insight on service quality and learn from service failures.15 User complaints are also crucial for identifying malpractice, as set out by the Francis report into serious failings at the Mid-Staffordshire NHS Foundation Trust (Figure 16). This established the principle of not just collecting complaints data, but using and sharing it to identify problems and take action.

3.3 We found that there are significant impediments to using complaints data for service improvement:

There is a lack of system leadership.

Complaints data and powers to enable improvement are fragmented.

There is little innovation in analysing consumer data.

System leadership

3.4 Stakeholders consistently told us that the complaints and redress system is not working well and that there is little drive to learn from complaints data. However, there are significant barriers to system reform and improvement, with no overall ownership in government of the whole system.

3.5 There are different governance arrangements for the main ombudsmen. The Local Government Ombudsman (LGO) reports to the Department for Communities and Local Government while the Parliamentary and Health Service Ombudsman (PHSO) reports directly to Parliament and is independent of government. Sponsorship for each of the public markets we reviewed is in different parts of central or local government, with accountabilities to both Parliament and local councillors. The Department for Business, Innovation & Skills is responsible for redress and consumer issues in private markets. It is making changes to private sector redress, independent of developments in the public sector.

3.6 There are moves to make the redress system work better. For instance, the PHSO and LGO have recently set up a joint convergence committee, to coordinate a programme of activities. Its work includes: a common approach to information security standards; harmonising back-office financial systems; and joint procurement of a new casework management system. In 2013-14 the ombudsmen did 40 joint investigations, and they are setting up a joint investigation unit to handle complaints involving health and social care. However, while such developments are welcome, they do not incorporate those bodies that might be expected to learn from complaints information, such as local authorities and providers. In health and social care, the Department of Health Complaints Programme Board brought system partners together to improve the handling of care complaints at a local level, including encouraging system learning.

Fragmentation of data and remedial powers

3.7 Complaints are not recorded or coded consistently across the system. Data providing insight into problems are often unavailable to the organisations who have the power to remedy problems and improve quality of services.

No system-wide data standards

3.8 The complexity of the public service complaints system means that data are spread across many bodies. In our case study areas of adult social care and early years we found no standardisation of IT infrastructure or common data standards. Local authorities use different IT systems to record complaints data and categorise complaints, or authorities do not categorise them at all. Similarly, the ombudsmen, the quality regulators and Citizens Advice had different IT systems and unique categories for recording complaints.

3.9 Disparate approaches create disaggregated and fragmented data. It is not possible to amalgamate complaints data beyond each public authority and there is limited capacity to use complaints data intelligently. For example, different bodies holding complaints on the same provider cannot easily identify complaints about that provider.

3.10 Some healthcare providers have tried to code complaints data. In response to the 2013 Review of the NHS Hospitals Complaints System, the Department of Health said it intends to work with the Health and Social Care Information Centre to put complaints data into the NHS central electronic data collection system.16 This should allow comparison between hospitals, but is at an early stage.

Inconsistent complaints reporting and informal data-sharing

3.11 Without a common approach to recording or aggregating data, we examined how bodies report and share data, for adult social care and early years education.

3.12 We found little standardisation in reporting complaints data across local authorities or ombudsmen. In adult social care, authorities have some core requirements for reporting complaints. Beyond this, we found many approaches to reporting. For example, in 2014 73 local authorities (48%) published adult social care complaints figures. Of these, 40 (26% of the total) compared complaints figures with previous years. Only 36 (24%) explained what action they had taken to address complaints. The LGO publishes all of its decision statements on the complaints it receives, while the PHSO publishes a sample.

3.13 Much of the data-sharing between organisations is ad hoc. Most local authorities we visited produce regular internal reports on complaints for their council’s executive, but these are not routinely shared with quality regulators. The LGO does, however, have a more systematic approach to sharing. For example, it has a memorandum of understanding with the Care Quality Commission (CQC), setting out information-sharing protocols. It also has dedicated authority ‘link officers’ to share case information.

Fragmented powers to make improvements

3.14 Several local authorities analyse adult social care user complaints to identify systemic problems with services or particular providers. For example, Figure 17 describes an example of the use of complaints data to improve social care commissioning processes. Since April 2015, and the implementation of the Care Act, local authorities are encouraged to use commissioning to encourage innovation, investment and improvement. However, local authorities have no direct influence to improve quality or complaints-handling standards, or to ensure redress where services come direct from a non-registered provider or a non-contracted private provider.

3.15 Nationally, the CQC inspects services to hold them to account for their safety and quality and is developing further ways to learn from complaints to support its work. It gets about 50 concerns daily through its national customer service centre.17 The CQC is trying to take a more systematic approach to assessing the arrangements providers have in place to handle complaints during the course of its inspections. However, it believes that some providers are not properly encouraging or recording complaints. Some providers receive few complaints (often fewer than 5 a year), which can limit the evidence the CQC can use to make informed judgements about how they handle complaints.

3.16 In early years education, Ofsted examines quality requirements for the early years foundation stage. Ofsted takes into account previous concerns about providers as part of its regulation and inspection work. The Department for Education considers that local authorities are responsible for those service quality issues outside Ofsted’s jurisdiction. Local authorities are expected to withdraw funding as soon as it is practical from providers that Ofsted has judged to be inadequate, and they also have some power to improve quality in providers rated as ‘requires improvement’. However, they cannot use commissioning tools to improve quality in providers rated as ‘good’ or ‘better’. The authorities we visited felt that, in practice, their remit to improve quality was very limited.

3.17 The ombudsmen do use complaints to identify systemic issues and suggest redress. The LGO issues ‘focus reports’ which include proposed sector remedies, while the PHSO publishes thematic reports, for example on midwifery regulation. Neither ombudsman can require a private provider to pay redress, despite the increase in private institutions providing public services. This is unlike other ombudsmen who deal with mainly private providers. For example, decisions made by the Financial Ombudsman Service can be binding on businesses.

Analysing social and online media

3.18 While only around half of users who experience problems make a formal complaint they are increasingly using social media and online forums to express their concerns, complaints and opinions on service quality. We built a tool to examine whether social media could be used to identify service quality problems. This measures the sentiment users have towards an organisation or sector, and groups the topics discussed into themes. The sentiment and thematic analysis identify when consumer sentiment towards a particular issue changes or increases in profile. This could provide an early monitoring framework to assess the risk of service or market failures. We applied the tool to 55,000 posts on part of a forum about nurseries (Mumsnet). Figure 18 is a visual representation of the frequency and sentiment of words on the forum relating to complaints about nurseries and gives an indication of the issues of concern. One of the most prevalent consumer concerns we identified, at the time we ran the tool, was children being left unsupervised. The only organisation in our study dealing with early years that identified this as an issue and an increasing trend was Ofsted, which aggregates complaints data.

3.19 More than 90% of local authorities in the UK have Twitter accounts.18 We found that authorities tend to use social media as an outbound communication tool rather than for consumers to give opinions on services. Quality regulators and ombudsmen also used social media rarely as a source of intelligence. This is in contrast to several private sector organisations which use social media as a source of consumer intelligence. For example, financial service providers often maintain Twitter profiles both to promote their brand and to provide immediate help to consumers.

15 Comptroller and Auditor General, Protecting consumers – the system for enforcing consumer law, Session 2010–2012, HC 1087, National Audit Office, June 2011.

16 Right Honourable Ann Clwyd MP and Professor Tricia Hart, A Review of the NHS Hospitals Complaints System: Putting Patients Back in the Picture, October 2013.

17 Care Quality Commission, Complaints Matter, December 2014.

18 A Mickoleit, Social Media Use by Governments: A Policy Primer to Discuss Trends, Identify Policy Opportunities and Guide Decision Makers, OECD working papers on public governance, No.26, OECD Publishing, 2014.

Appendix One

Our audit approach

1 This study examines the complaints systems and access to redress in parts of the public sector where the government has given users greatest choice. Therefore user behaviour helps to achieve value for money. To do this, we assessed how bodies:

use complaints and redress to improve services, and which main bodies do this work;

support users in raising complaints, and in getting redress; and

use complaints and redress data to increase accountability and improve services and systems.

2 Figure 19 summarises our audit approach. Our evidence is described in Appendix Two.

Appendix Two

Our evidence base

Evidence

1 We reached independent conclusions on the complaints and redress system after analysing the evidence gathered between December 2014 and April 2015. Our audit approach is described in Appendix One.

2 We used several study methods to reach our conclusion. For most of the study methods used we examined two case study markets – adult social care and early years education. We used the study methods below:

3 We held semi-structured interviews with officials at several organisations involved in public services complaints, including:

ombudsmen (Local Government Ombudsman (LGO), Parliamentary and Health Service Ombudsman (PHSO), Housing Ombudsman Service and Ombudsman Services);

regulators (Ofsted and the Care Quality Commission); and

departments (the Department for Education, the Department of Health, Cabinet Office, the Department of Business, Innovation & Skills and the Department for Communities and Local Government).

4 We consulted stakeholders and interest groups within the complaints system, including:

Which?;

Healthwatch;

the Local Government Association;

Citizens Advice;

the National Day Nurseries Association; and

Association of Directors of Adult Social Services.

5 We visited the complaints case-handling teams for Ofsted and the LGO to learn how they manage and organise complaints, and collect and use data. We held semi-structured interviews and work-shadowed participants involved in the process.

6 We visited several local authorities across the country to understand their complaints processes, in particular for adult social care and early years education. We also reviewed documents the local authorities gave us.

7 We mapped complaints and redress in adult social care and early years education.

8 We reviewed published reports and documents on the topic. These included recent high-profile investigations into delivery failures where users’ complaints were ignored, for example the Francis report into failings at Mid-Staffordshire NHS Trust. We also reviewed academic research, government reports and reports published by interest groups relating to the subject.

9 We analysed the cost of the complaints and redress system. We reviewed the cost of public and private sector ombudsmen; efficiencies in the LGO and the PHSO and the unit cost of processing complaints by local authorities.

10 We analysed data from the Which? 2015 complaints survey to show the detriment to public service users, the type of problems and the level of satisfaction with the complaints system.19 We carried out a validation assessment of the survey to assess whether the survey data and findings are likely to be reliable, representative and relevant to our study.

11 We analysed data from the PHSO 2015 Omnibus survey commissioned from YouGov. We carried out a validation assessment of the survey to assess whether the survey data and findings are likely to be reliable, representative and relevant to our study.

12 We analysed data from the Healthwatch 2014 research report Suffering in Silence. We carried out a validation assessment of the survey to assess whether the survey data and findings are likely to be reliable, representative and relevant to our study.

13 We analysed LGO management information. We modelled the relationship between satisfaction with adult care services (from the Health and Social Care Information Centre) in each authority and the number of complaints per head of population that go to the ombudsman.

14 We reviewed case files of a sample of adult social care and early years education complaints cases provided by the LGO.

15 We benchmarked the English and Scottish public service complaints and redress systems, and spoke to representatives from the Scottish Public Services Ombudsman.

16 We analysed publicly available online data. In particular, we used the Twitter Application Programming Interface to get tweets with relevant search terms. In total, we logged about 500,000 tweets in 4 months. Using R20 and the package qdap21 for text analysis we classified tweets into neutral, positive or negative categories. For retrieving forum posts we used web-scraping libraries for the Python22 programming language. Using the library “topic models”23 that applies the Latent Dirichlet Allocation algorithm24 we identified prevalent topics across the forum entries.

19 Populus, on behalf of Which?, interviewed 4,058 UK adults online between 6 February and 12 February 2015. Data were weighted to be demographically representative of the UK population.

20 R Core Team. R: A language and environment for statistical computing. R Foundation for Statistical Computing, 2014. Available at: www.R-project.org/

21 TW Rinker. qdap: Quantitative Discourse Analysis Package version 2.2.0. University of Buffalo. Buffalo, 2013. Available at: http://github.com/trinker/qdap

22 Python Software Foundation. Python Language Reference, version 2.7. Available at: www.python.org

23 B Gruen, K Hornik. Topic models: An R Package for Fitting Topic Models. Journal of Statistical Software, vol 40, issue 13, pp. 1–30. Available at: www.jstatsoft.org/v40/i13/

24 Latent Dirichlet allocation: http://en.wikipedia.org/wiki/Latent_Dirichlet_allocation

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