Our constitution, July 2012: Ombudsman and Auditor-General

“Independent accountability mechanisms: Ombudsman and Auditor-General”

The Auditor-General is an office established to examine the government’s accounts. The South African Constitution provides that the Auditor-General is to:

annually produces audit reports on all government departments, public entities, municipalities and public institutions. Over and above these entity-specific reports, the audit outcomes are analysed in general reports that cover both the Public Finance Management Act (PFMA) and Municipal Finance Management Act (MFMA) cycles. In addition, reports on discretionary audits, performance audits, and other special audits are also produced. The Auditor-General tables reports to the legislature with a direct interest in the audit, namely Parliament, provincial legislatures or municipal councils. These reports are then used in accordance with their own rules and procedures for oversight.

The Ombudsman Association defines ombudsmmen as:

an independent and impartial means of resolving certain disputes outside the courts.

They cover various public and private bodies and look into matters after a complaint has been made to the relevant body.

Citizens Advice Scotland notes:

Ombudsmen and commissioners are independent, free of charge and impartial- that is, they don’t take sides with the person who is complaining or the organisation being complained about.

In most cases, you must complain to the organisation first, before you make a complaint to the ombudsman or commissioner.

If you need to spend money making a complaint to an ombudsman or commissioner, for example, travel expenses to their office, you may be able to claim this back.

If an ombudsman or commissioner finds that your complaint is justified, they will recommend to the organisation what it should do to put things right. They can’t force an organisation to go along with their recommendations but organisations almost always do.

They add, a note of warning:

Investigations by an ombudsman or commissioner sometimes take a long time.

In September 2011, the Guardian reported that the financial ombudsman had such a backlog that some cases were waiting up to two years to be heard and that many would have found it faster to take a business to the small claims courts.

The FOS, headed by Natalie Ceeney, says only those consumers who are deemed to be in financial hardship are pushed to the top of the queue, everyone else simply has to wait their turn.

Ironically the service was set up to provide a speedy and cheap way to resolve disputes between financial companies and their customers without having to go to court. Anyone who has reached deadlock in a dispute with a bank, insurance company, or similar, can apply to the FOS for independent arbitration. The finance firm involved is bound by the FOS findings and has to pay a £500 fee for every complaint to the FOS brought against it. It is free for the consumer.

In recent years the FOS has been swamped with cases.

The financial services ombudsman blames the long training period necessary for staff meaning that staff expansion is a slow process. Fair point, except that deregulation and recession would have suggested four years ago that there would be an increase in customer complaints about financial services gone unresolved.

Two and a half years ago it was agreed that a new ombudsman for supermarket suppliers and customers was needed – an independent body with powers to strongly recommend better practices to the greedy bloodsuckers that dominate our food supply and our shopping – but it appears likely now that the Supermarkets Ombudsmann isn’t likely to start work till 2013.

Meantime yesterday dairy farmers announced they could not deal with the endless cuts in the price paid to them for their milk (cuts not reflected in the price I pay for a litre of milk):

“Recent price cuts have stripped millions of pounds out of dairy farmers’ businesses and created anger, frustration and fear for the future.”

Brian Dalby, a regional dairy board chairman in the National Union of Farmers and a Leicestershire farmer, said the endless driving down of prices by supermarkets refusing to pay a sustainable price for the milk they buy, meant

“crisis for our family dairy farms”. He said “Dairy farmers are already in a very difficult financial situation with many producers selling their milk for well below the cost of production. I can’t see how some family run dairy farms can survive this round of price cuts, which will take tens of thousands of pounds out of their accounts, with no notice and no come-back whatsoever.”

A summit meeting planned for tomorrow in London is expected to attract at least 2000 dairy farmers from Scotland, Wales, and England: to begin

to tackle the need for retailers working with processors to take responsibility for a sustainable supply chain which returns at least a cost of production for dairy farmers.

A joint statement said: “The catastrophic cuts will drive farmers out of the dairy industry and we are united in our demand for an immediate reversal of recent and planned cuts. There has been an unprecedented outcry of anger and frustration among farmers. We want to harness that strength of feeling and bring together farmers from across England, Scotland and Wales to express their feelings in London next week.

“Farmers have told us they will do whatever it takes to stand up against these cuts. There is a window of opportunity to progress a robust voluntary code of practice, but we shall also be exploring a regulatory solution from the Government.”

From the first of August, most dairy farmers will receive around 25p per litre of milk. The cost of production is estimated by independent analysts to be above 30p a litre. In the supermarket, you’re probably paying over 50p a litre. The supermarkets have the power to cut the prices they pay for the milk they buy while the dairy farmers have to give at least six months notice to terminate their contract to sell.

That’s milk: but the same slow bleeding of the supplier’s profits to benefit the supermarket, not the customer, applies in almost every area.

Supermarket suppliers need to be able to complain to an ombudsman: we as customers need to be able to complain. We need to be able to protest supermarkets installing themselves in flourishing neighbourhoods and driving small businesses out.

But fifty years ago, who would have believed we’d need an ombudsman specifically for supermarkets?

This week at Leveson, Lord Hunt and Lord Black both tried to convince Lord Leveson that there was no need for him to recommend any statutory regulation of press, when the press themselves were now resolved they wanted to do a much better job of regulating themselves. This is exactly what happened before each time a Royal Commissions on the Press was held (in 1947–1949, 1961–1962, and 1974–1977) and again in 1990 following investigation of the Press by a government-appointed committee chaired by David Calcutt. Each time the Press have promised to do better: each time, they’ve set up a system to allow themselves to carry on as before. Should there be a Press Ombudsman, as there is in Ireland?

The Scottish Constitution should require that the auditor-general and ombudsmen should exist, and what in principle is an ombudsman’s role. Should specific areas be Constitutionally mandated to have an ombudsman? We would neither want future generations to find the Constitutional ombudsman too inflexible to be able to deal with the problems of a changing world, nor would we want the government of the day to be able to abolish or diminish an ombudsman’s powers to investigate and recommend.

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