The Pensions Ombudsman (TPO) has had to pause 14 ongoing scam cases due to a shortage of resources, pensions ombudsman, Dominic Harris, has revealed, suggesting that a change in the way TPO is funded could be needed to help address customer wait times.

Speaking at a Work and Pensions Committee (WPC) hearing, Harris emphasised that TPO is a “small organisation”, with limited resources, and has had to make pragmatic decisions as to which cases it will prioritise given this.

Asked whether cases such as Norton had an impact on other investigations, given the size and resources required, TPO interim chair and deputy ombudsman, Anthony Arter, acknowledged that this was a “big decision to make”.

However, he argued that it was a "really important area" for TPO to focus on, explaining that if the individual complaints surrounding the case had been handled separately, they would have taken "considerable resource" and could have overlapped, which would have been a "complete waste of resource".

But resource limitations are impacting cases, as Harris noted that while there are "many more cases of this nature that have come in", not all are being progressed currently.

"At the moment we have nine cases on foot, but we have a further 14 that are paused, and the reason they are paused is simply because of resources, so we are having to make pragmatic decisions on which ones are most likely to get justice," he stated.

In particular, Harris explained that TPO is looking to go after cases that set a particular type of precedent, as in the case of Norton, arguing that that this was "important" to show the industry was going on, "even if monies weren't recovered".

He continued: "Now we're looking more at pragmatic decisions such as which ones are we most likely to get returns for the members, which ones are most likely to act as a deterrent on, which show a new type of scam or a new way that we can deal with something."

For instance, Harris said the ombudsman is currently looking at a case considering whether it is possible to "pierce the corporate veil", amid reports that trustees are setting themselves up as companies and sitting behind the corporate veil to protect assets.

"Even if there is no actual recovery there, that would be an important case to deal with those sort of issues, so people don't think that's the right way to go to try and protect the wrongdoer from liability," he explained.

Harris also admitted that "frankly" the nine cases that are ongoing probably wouldn't be if it wasn't for the additional funding given to support the Pensions Dishonesty Unit (PDU) which was part of a two-year trial, set to come to an end this year.

"We do expect to still see cases," he added though, arguing that "there is a real need for something similar to the PDU going forward, whether it's the PDU or a more general scans and complex cases unit".

Asked more broadly about the ombudsman’s ability to address customer waiting times given resource concerns, Harris stressed that “it’s really a function of supply and demand and demand is going up and keeps going up", while on the supply side, funding hasn't kept up.

Whilst Harris said that the ombudsman was “very grateful” for the temporary increases granted by DWP, he argued that “ultimately those temporary increases aren't enough to deal with both the increases and the historical backlog".

"It effectively keeps our head above water for the increase in demand, but does nothing to erode that historical backlog," he said.

In addition to this, he pointed out that temporary increases also cause an issue with recruiting people and training them up to deal with what is "frankly a pretty complicated area".

Given this, Harris said that the spending review due this year, election depending, could be a chance to "reset [TPO's] baseline funding", while the public bodies review, delayed from last year, could allow for a broader change in the structure of TPO's funding.

He stated: "We would very much like to discuss the prospect of some sort of demand-led funding model similar to that which the Financial Ombudsman Service has, so that when we have unexpected increase in demand, we can flex with it rather than be perpetually in this discussion over what happened last year and what we need this year, which then gets overtaken by increases in demand the following year as well."

However, Harris acknowledged that there are also levers TPO can make use of directly to help improve efficiency, with TPO's operating model review due to be finalised "at the end of this month, beginning of next month".

"So we're looking at earlier closures, fewer handovers," he explained, suggesting that TPO would also like to be "much more of a court".

He explained: "A court can deal with cases through summary judgement at a very, very early stage.

"There must be a way of disposing [simple cases] more quickly, but at the moment the legislation says that every member has a right to take it through to determination.

"We can't even put them through into our resolution team without their consent, and our resolution team is really successful, they close 80 per cent of the cases they receive, so we need to be able to send the appropriate cases.

"We've got to be able to close through similar things for summary judgement cases earlier and that will mean that we're concentrating and dealing with only the most complicated cases, like Norton."

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