4pm BST update

Department told to 'get a grip' as it spends £11m on handling complaints

The Department for Work and Pensions spends up to £11m a year dealing with complaints but more than 40% of people remain dissatisfied with the outcome, according to a new report.

JobCentre Plus, the Pension Service and the Disability and Carers Service in 2007/08, recorded a total of 70,000 complaints but Whitehall's spending watchdog, the National Audit Office (NAO) estimates this represents only one-fifth of the true level, because of shortcomings in the recording process.

The watchdog believes that more than 250,000 complaints made by the public about the DWP's agencies last year were never actually recorded.

The chairman of the House of Commons public accounts committee said the DWP should "get a firmer grip" on its systems, warning that if complaints are not properly recorded, the department may miss the chance to identify problems with its processes.

In its report, the NAO found the main reasons for dissatisfaction with the handling of complaints by DWP agencies were delays, poor staff knowledge and inadequate responses.

Improving the quality of initial responses to gripes could save significant sums of money, as complaints handled effectively by front-line staff can be up to 40 times cheaper than those escalated up to the final stage of the internal process, said the NAO.

But it said there was "no consistently-applied department-wide quality checking of responses given to complaints" to determine whether they are handled effectively by staff across the three agencies.

Despite the ministry's claim that the cost of handling complaints is £6.2m, the NAO estimates that the figure is actually around £11m.

In addition, some £3.6m was paid out to 15,430 complainants last year - mainly because of delays to paying out pensions and benefits. Awards ranged between £64 to £505.

Auditor-general Tim Burr, the head of the NAO, said: "While there is general satisfaction with the services customers receive from the department and its agencies, there is scope to handle complaints better.

"The three agencies need to record accurately customer complaints so that they can identify where they are not meeting customer needs and can improve services accordingly. Agencies also need to do more to understand why some customers are dissatisfied with the handling of their complaints."

The PAC chairman, Edward Leigh, said: "The Department for Work and Pensions must get a firmer grip on its systems for making complaints.

"Recording of complaints is poor. The number of complaints received by the three agencies of the department could be some five times the number recorded, leading to missed warnings of poor service and missed opportunities to improve services for their customers.

"The department and its agencies do not even know how much dealing with complaints is costing them. The NAO estimates that it could be as much as £11m a year.

"Up to 40% of people who complain are not happy with the outcome of their complaint or how it was handled. Reducing dissatisfaction with the process and outcome could reduce the number of complaints being escalated and significantly improve the economy and efficiency of complaints handling."

The Liberal Democrat work and pensions spokeswoman, Jenny Willott, said: "The department will keep making the same mistakes at huge cost to the taxpayer if it doesn't improve how it records and reviews complaints.

"It is absurd that there is no system in place across the DWP to ensure civil servants are learning from complaints and mistakes, not simply repeating them.

"Ministers must ensure that all complaints are recorded accurately and lessons learnt, or the cost will keep rising."

A DWP spokesman said: "We have 22 million customers and we aim to give every single one of them first-class service every time they deal with us.

"Annual surveys show more than four out of five customers are happy with the service they receive and the number that actually complain is less than 1%.

"We are continually improving our service to ensure it is as efficient and effective as possible."