ASHE

Introduction This paper concentrates on the use made of data taken from the Annual Survey of Hours and Earnings (ASHE) when assessing/calculating IOD pensioners degree of disablement upon review. It should be read in conjunction with 'Earning Capacity Degree of Disablement' which is relevant to the wider topic of how a review of an injury pension should be lawfully conducted. Below I show the origins of the use of ASHE and explore the issue of whether or not its use is lawful. I believe its use is not lawful, and I will try to explain why I have come to that conclusion.

Background I should mention briefly what ASHE actually is before going further. The Annual Survey of Hours and Earnings (ASHE) provides information about the levels, distribution and make-up of earnings and hours worked for employees in all industries and occupations. The ASHE tables contain UK data on earnings for employees by sex and full-time/part-time workers. Further breakdowns include by region, occupation, industry, and age groups. These breakdowns are available for the following variables: gross weekly pay, weekly pay excluding overtime, basic pay including other pay, overtime pay, gross hourly pay, hourly pay excluding overtime, gross annual pay, annual incentive pay, total paid hours, basic paid hours and paid overtime hours. The earnings information presented relates to gross pay before tax, National Insurance or other deductions. ASHE is based on a one per cent sample of employee jobs taken from HM Revenue & Customs (HMRC) PAYE records. It has many uses, but its purpose is to provide a broad brush stroke indicator of trends. It is apparent that use of ASHE is widespread1, but so far it has not been directly challenged in the High Court nor has the Pensions Ombudsman made comment. There has been a suggestion, from the pensioners' camp, that ASHE is not a direct threat to IOD pensions that when it is used there is ample opportunity to counter whatever an SMP or pension administrator produces. This is a pragmatic approach that no doubt can bring favourable results, but it has two unfortunate side effects: by not directly challenging the use of ASHE as unlawful it gives passive approval for its use; and pensioners may be being disadvantaged by its use without realising2, or may be unable to mount an effective challenge by way of appeal once their pension has been reduced. There is nothing in the Police (Injury Benefit) Regulations that points to the use of ASHE. There are no gaps or silences in the Regulations into which ASHE can be slotted. The Regulations set out very clearly, in Schedule 3, how an injury pension is calculated. The amount of injury pension paid is arrived at from years of service, average pensionable (police) pay and degree of disablement. Once an injury pension has been calculated, at the point of its initial grant, that is a final decision, subject only to appeal and the provision for review at such intervals as may be suitable during retirement. The amount of pension paid cannot be altered unless there is found, on review, to be a

Recent research indicates that SMPs, forces and police authorities, though now aware of the unlawfulness of reducing degree of disablement at age 65, may continue to believe that the similar age-related trigger of having reached normal force retirement age allows lawful use of ASHE. 2 Neither NARPO, nor the Federation at local or national level have contact with all former officers who are in receipt of an injury pension.

substantial alteration in degree of disablement, as a result of an improvement or deterioration in the effects of the duty injury on the pensioner's capacity to work and thus to earn. The origin of the suggestion that ASHE has a part in the review of injury pensions is readily identified. It has but one source guidance issued by the Police Pensions and Retirement Policy Section of the Home Office. The guidance is contained in two publications. One is the lengthy and detailed 'Guidance on Medical Appeals Under The Police Pensions Regulations 1987 And The Police (Injury Benefits) Regulations 2006.' The other is the now infamous Annex C to Home Office circular 46/2004. Neither pieces of guidance are reliable. Parts of both, relating to reviews at age 65, have been declared unlawful by the High Court3. That fact must inevitably taint the rest of the guidance. Annex C has long been moribund, though it has yet to be withdrawn. Guidance on Medical Appeals has so far escaped much of the attention focussed on Annex C but it must now be regarded as equally moribund. Both pieces of guidance are available on www.scribd.com/wdtk A revision of the Annex C guidance was promised on the 11th September 2009 by the then Minister of State for Security, Counter-Terrorism, Crime and Policing, David Hanson. On the 10th March 2010 the Home Office advised that all reviews be suspended. To date no revised guidance has been issued, though a draft was circulated for comment in January 2011. Astoundingly, it still contained advice that injury pensions could be reduced to band one at age 65. ASHE was also still included. The responses to the draft guidance make interesting reading4 as they show the extent of the confusion that surrounds the process of review. The draft guidance has not progressed further and Mr Peter Spreadbury of the Police Finance and Pensions Unit at the Home Office gave evidence at the Simpson case in February 2012 in which he stated: '38. . . . Should it appear that repeated legal challenges and uncertainty are likely to continue in this area, one possible option is the withdrawal of the relevant guidance and the abandonment of any attempt to give central guidance on the topic.' Currently, the Deputy Chief Constable of Cambridgeshire Constabulary has announced that he has become ACPO lead on police injury pensions. He is working on a new policy for his force and will have to decide whether ASHE has any lawful place in a review or whether it is lawful to hold a review at normal force retirement age simply because that point has been reached. The focus may thus shift from paralysed Home Office guidance to whatever ACPO might endorse as best practice. The history of the World is littered with the victims of regimes who believed they were doing the right thing or had a right to do the wrong thing. Use of ASHE is a case in point. It is an invention of the Home Office, via guidance, that seems to have but one purpose to circumvent the Regulations in a way that would result in a lower value of pension being paid when former officers reach what would have been the age when they would normally have retired from the police service. Unfortunately, the Home Office has a loud voice which commands the attention of SMPs, PMABs, police forces and police authorities in such a way they are led to believe the nonsense that has emanated from that source. And it is indeed nonsense. The Home Office seeks to bring SMPs, forces and police authorities to believe an injury pension is compensation for loss of earnings, and from that false and misleading assumption devises a method of reassessing degree of disablement that is unlawful.
3 4

Simpson [2012] EWHC 808 (Admin) Available at www.scribd.com/wdtk

In order to bury any lingering uncertainties that may remain about the status of Home Office guidance let me make it clear that it has no more value than any other advice. It can be ignored with impunity wherever and whenever it is evaluated as advising unlawful actions. It can be ignored with impunity wherever and whenever other advice makes a case for preferable alternative actions. Indeed, there is a grave inherent danger in treating Home Office guidance as authoritative. At least one (former) Chief Constable would have had us believe that Home Office guidance was mandatory. Many others seem to think that it is at least on a par with legislation or is of such eminent quality that it should be accepted without the bother of applying critical assessment. In the recent case of Haworth v. Northumbria Police Authority the Judge opined, concerning Home Office guidance: 'As a matter of principle such extra statutory guidance cannot be effective to cut down the scope of a statutory power . . . ' [My emphasis] The Guidance effectively usurps the professional discretion on choice of methodology that rests with the SMP or PMAB. By advising that ASHE should be used it effectively closes the door on any other approach. It has to be noted, however, that the Home Office does say that, 'It will be for the SMP, after seeking such information from the police authority about the background to this case as he or she needs, to decide whether the ASHE figure can be used.' However, as no alternative way of calculating earning capacity is offered it is no surprise to learn that most SMPs seem to be content to use it. A combination of lethargy by SMPs and their paymasters, and powerful suggestion from the Home Office combine to help ensure that ASHE is used whilst allowing the Home Office to hide behind its oft-repeated claim that it is only an innocent bystander offering advice. I believe that the SMP, on review, has a wide discretion over how he approaches his task. The task is referred to him under the Regulations as an independent medically qualified professional. It is a statutory task. It follows that the SMP should be free to apply his professional judgement to how he approaches the statutory task. The Guidance imposes a control over the way the SMP approaches his task, and this control is further reinforced by the training provided by the National Policing Improvement Agency a quango fully funded by the Home Office. It seems clear therefore that the Guidance does seek to limit and control the scope of SMPs and PMABs to determine degree of disablement or alteration in degree of disablement in any manner they are satisfied complies with the Regulations. This control amounts to a fetter on the power of discretion granted to the SMP by the Regulations and a restraint on the scope of a statutory power. The Home Office itself claims a wide use of ASHE, for it says in Guidance on Medical Appeals that the procedure for assessing degree of disablement has been followed by most forces and by boards in recent years. The fact of the guidance exerting a controlling effect such as to reduce the scope of a statutory power is therefore inadvertently admitted by the Home Office.

ASHE is Unlawful

I must stress at the outset that I see no need whatever for a pensioner's earnings or employment to be used to assess/calculate degree of disablement either at review or initial grant of an injury pension. At review the SMP should need only to ascertain if there is any alteration in the medical condition resulting from the duty injury. The injury is the basis for the pension. Its effect on earning capacity is the substance on which degree of disablement is based. Yet, when use is made of ASHE the intentions of the Regulations are turned on their head. ASHE is used specifically when pensioners have reached what would have been the age at which they would normally have retired from the police service. ASHE is then used to provide a nominal 'lost wage' instead of a 'lost police wage' at that point. It is used as a comparator against what the pensioner is either actually earning or might be able to earn. This approach is not compatible with the provision of the Regulations concerning reviews. It is an assessment of entirely the wrong thing. It is an assessment of loss of earnings instead of the required test, which is to determine if there has been any alteration in degree of disablement. This aspect is covered more fully in the companion paper 'Degree of Disablement Earning Capacity', however, it is sufficient to say here that essentially the SMP uses ASHE to conduct an entirely fresh assessment of degree of disablement something that he is prohibited from doing. For authority on this refer to Simpson 32: 'I accept Mr Lock's submission that the SMP and the PMAB cannot conduct a fresh review of the uninjured earning capacity and the actual earning capacity of the former officer and then, comparing the outcome of that assessment with the previously determined degree of disablement, conclude that there has been an alteration in the former officer's degree of disablement. That approach is contrary to the analysis approved in Turner and confirmed in Laws and reverses the approach required to be taken by Regulation 37(1). The statutory scheme requires an assessment as to whether there has been an alteration in the degree of disablement first. A further quantum decision on the present degree of disablement is only permissible if the police authority, acting by the SMP, have first decided that there is a substantial alteration in the former officer's degree of disablement. ' In Laws Appeal the Judge had opined; '18. So much is surely confirmed by the terms of Regulation 37(1), under which the police authority (via the SMP/Board are to "consider whether the degree of the pensioner's disablement has altered". The premise is that the earlier decision as to the degree of disablement is taken as a given; and the duty the only duty is to decide whether, since then, there has been a change: "substantially altered", in the words of the Regulation. The focus is not merely on the outturn figure, but on the substance of the degree of disablement.' When a SMP turns to ASHE, he is attempting to quantify what a pensioner might be expected to earn but for the effects of the duty injury. That is not a task that he is permitted to undertake for he is seeking to determine the uninjured earning capacity of the pensioner with a view to comparing that to what the pensioner might be earning. This amounts to a fresh review.

Moreover, we have to understand exactly how use of ASHE is triggered. I trust that it is understood now that reviews cannot be held speculatively. This was set out a good while ago, before the Guidance was issued, in the case of Crocker: '38, I regard the review provision as the key. There is no need to speculate. As and when circumstances dictate, the pension is reviewed.' [My emphasis] The circumstances that have been used to dictate a review where ASHE can be used are nothing more nor less than the former officer having reached or passed a certain age the age at which he would have normally retired had he still been employed as a police officer. I accept that under the widespread mass reviews that we have seen in certain forces since Annex C was published it is possible that pensioners were reviewed for no other reason that they were swept up in a general intention to review the injury pensions of all former officers. None-the-less, having been swept up in the net, their age marked them out as deserving of a different approach to all others. They were to be given a fresh assessment of their degree of disablement, due to their age. The Pensions Ombudsman made it clear, in the case of Ayre, that age does not allow a different approach at review due to a person's age. He was referring to age 65, but his comment is equally appropriate when applied to any other age. If an SMP wishes to use ASHE to assess or calculate any alteration in degree of disablement he first needs to labour under a misapprehension and an illogical assumption. The misapprehension is that degree of disablement is a measure of loss of earnings. Hence the search for a nominal 'lost' wage, drawn from ASHE data against which the SMP can compare either an actual wage currently being earned by the pensioner or a wage that he thinks the pensioner ought to be capable of earning, allowing for the disabling effects of the duty injury. The SMP is, of course, completely wrong to take this approach, for degree of disablement is intended by the Regulations to be an expression of the available capacity to engage in paid employment. It is a measure of the available physical and mental powers that allow the pensioner to undertake work that results in payment. As opposed to, say, work that results in prize petunias. If that had been the criteria set by the Regulations, would the Home Office expect a duly qualified horticulturist to measure the number of petunias produced, or potentially produced, or the average or mean produced nationally by gardeners everywhere, (as set out in ASHE the Annual Survey of Horticultural Endeavour) and from that deduce degree of disablement? The fact is, a duly qualified medical practitioner is specified by the Regulations because the task at review is entirely and exclusively a medical one an assessment of mental and physical function set within the environment of paid employment. The assumption that the SMP must adopt before using ASHE is a wild one, for which the SMP can thank the Home Office, who invented and promulgated it. It appears in both sets of guidance. In Part 5 of Guidance on Medical Appeals and in Annex C. It says respectively, 'Once a former officer reaches what would have been his or her compulsory retirement age (CRA) under the Police Pensions Regulations it is no longer appropriate to use a police pay scale as the basis for his or her pre-injury earning capacity.' (Part 5 of Guidance on Medical Appeals.) 'Once a former officer receiving an injury pension reaches what would have been his compulsory retirement age under the Police Pensions Regulations (55, 57, 60 or 65 depending on the persons force and rank at the point of leaving the

police service) the force should consider a review of the award payable, since it is no longer appropriate to use the former officers police pay scale as the basis for his or her pre-injury earning capacity.' (Annex C) The guidance then goes on to suggest: 'In the absence of a cogent reason for a higher or lower outside earnings level, it is suggested that the basis for the persons earning capacity, had there been no injury, should be the national mean earnings (from the Annual Survey of Hours and Earnings - ASHE). The ASHE figure taken should be the average for the population overall. Separate figures for males and females, and regional variations should not be considered.' The advice to use ASHE is based entirely on the assumption is that it is 'no longer appropriate' to use police pay scales. No reason is given, no case law is quoted. It is a huge assumption, presented as though it were a fact. It is, however, merely the opinion of a civil servant, whose opinion on other aspects of the administration of injury pensions has been declared to be unlawful. In the cold light of reason, I hope you can see the assumption is based on the false premise the only job the former officer's pre-injury earning capacity could be based on up to normal force retirement age is a police pay scale. This is completely ridiculous. Once a person has left the police service he or she is free to take up any employment they wish or, rather, any employment their disability allows. So why should there be any link with police pay scales? Comparison with a police wage, if it were a lawful method to assess earning capacity, which it is not, would only be applicable at or shortly after an officer is retired. It is the most recent, and thus most relevant, record of a wage earned. A few years down the line the police wage is ancient history and if the SMP is seeking, erroneously, to determine degree of disablement by comparing what a person used to earn and what he might be able to earn now he commits the double fault of: a) conducting a completely new assessment of degree of disablement and b) trying to work out degree of disablement from looking at earnings rather than at the effects of the duty injury on earning capacity. The fact of the matter is that at review no comparison of earnings is needed. The guidance is describing and recommending an unlawful approach - a method for measuring loss of earnings rather than the true required test, which is to assess if there has been any alteration in available earning capacity. The Guidance suggests that the SMP measures the output of available effort earnings and uses that figure to work backwards to determine earning capacity. That amounts to a fresh assessment of earning capacity. Put simply, you can't look at earnings, whether they be past, present or potential, and use them as a reliable indicator of earning capacity and thus degree of disablement. Earning capacity determines degree of disablement. Regulation 7-(5) 'Where it is necessary to determine the degree of a persons disablement it shall be determined by reference to the degree to which his earning capacity has been affected as a result of an injury received without his own default in the execution of his duty as a member of a police force . . .'

Earning capacity is an exercisable power, not amenable to measurement in terms of earnings. Look at it this way an engine's cubic capacity (which we could call earning capacity) does not tell us the the maximum speed the car can go (which we could call earnings). If we knew the maximum speed of a car could we use that to determine the cubic capacity of the engine? I think not. If we later reviewed the situation and determined the maximum speed had declined could we conclude that the cubic capacity had also declined? Again, I think not. Similarly, no amount of juggling of earnings, wages, jobs whether past, present or potential can ever lead one back to quantifying earning capacity. The Home Office is guilty of muddled thinking. It all stems from a basic misconception that the pension is there to compensate for loss of earnings. That is why the Home Office thinks that once a police salary is no longer 'lost' at normal force retirement age then some other wage must take its place and be identified as a 'lost wage', hence the insertion of ASHE. It is really the most arrant kind of nonsense and needs to be firmly kicked into touch. Every injury pensioner has indeed 'lost' a police wage, but that is not the point. The Regulations are not compensation for a lost income but are compensation for a duty injury. The Explanatory Memorandum to the 2006 Regulations tell us that injury awards, '. . . are in effect compensation for work-related injuries.' The amount of pension paid is calculated against average police pay, years of service and degree of disablement. That is a final decision. Degree of disablement does not then get reassessed on review by going back to calculating lost income, but only encompasses the degree of alteration (if any) by which the ability to work (and thus to earn) has been compromised by the injury. Income or the loss of it plays no part in assessing any alteration in degree of disablement at review. I argue that at review there need be no calculation of earnings, whether 'lost', potential, real, promised, available or whatever. That approach is a blind alley and a gross distortion of what the Regulations intend, and what they say. Moreover, use of ASHE completely destroys the requirement to make an individual assessment of any alteration in degree of disablement. It takes a figure of earnings that is a national mean. In statistical terms the mean summarizes the properties of a group. It is important to understand that the mean does not represent an individual in fact, there may be no individual whose value matches the mean; but the mean is a summary of the entire sample population. Use of a mean figure from ASHE bears about as much relationship to an individual assessment of potential earnings, or 'lost' earnings as a chicken does to a savoy cabbage. So, not only is ASHE brought into play on the back of an erroneous view that earning capacity can be quantified by looking at earnings, and then by taking a general figure of earnings and attempting to apply it to an individual, but there is a further deficiency: ASHE only comes into play, in the Home Office's peculiar view of how things should be done, when an officer reaches a certain age. The courts have ruled age is not a relevant factor when assessing degree of disablement and thus is not a factor which can be used as reason for holding a review. ASHE and age are inextricably interlinked. You can't get to ASHE without going through age. Its whole reason for inclusion is based on an individual having reached a certain age and an illogical leap to thinking age can affect earning capacity. In the strict context of the Regulations, it cannot. Yes, earning capacity can alter, at any age, but the Regulations only count as valid any alteration caused by the effects of the duty injury nothing else. As age is an unlawful factor, then

so is ASHE. If the SMP uses ASHE he is inevitably and unlawfully using the pensioner's age, and an irrelevant assumption about income based on age, as a factor to assess degree of disablement. Finally, the task of the SMP on review the courts have said his only task is to determine if there has been any alteration in degree of disablement since the time of the last final decision. This means the SMP is precluded from conducting an entirely fresh assessment of degree of disablement. He cannot start from scratch. Yet, this is precisely what he would be doing if he used ASHE. The level of pension paid is set out clearly in Schedule 3 of the Regulations and it depends on years of service, degree of disablement and average police pay. Only if the SMP decides there has been a substantial alteration in the medical condition is he brought to earning capacity. Note very firmly: in earning capacity not in earnings, loss of earnings or expected or potential earnings. There is then, no need whatever for the SMP to use any comparator whatever that task was completed when the injury pension was first granted, in the sense that the amount of pension was determined according to Schedule 3. The decision made at that time cannot be revisited. ASHE arises from dubious and unsound guidance, but that alone will not be sufficient reason for police authorities to abandon it. They need to be persuaded that using ASHE must be unlawful on the double grounds of being tied to age and being used to conduct a completely new assessment of degree of disablement. Its use needs to be challenged in the High Court and I trust that will happen in the not too distant future. ----------------------------The usual caveats apply to this document. I am not a qualified legal expert. This document sets out my view on ASHE and needs to be considered against any opposing views. I could take a tip from the technique employed by the Home Office and say it is only guidance, whilst intending the guidance to be followed without accepting any responsibility for any consequential difficulties. The Simpson case has put paid to that slippery subterfuge and I have to admit to a warm feeling of schadenfreude at seeing the Home Office finally being criticised for its actions and being told its guidance is unlawful. As a retired former officer on an injury pension my aim is to do what I can to inform and to encourage other IOD pensioners to stand up for their rights. I welcome any comments on this, and other documents posted on www.scribd.com/wdtk please don't be shy, contribute to the discussion and help sharpen our understanding of the developing situation. Email me at: atebion2me[AT]gmail.com No IOD pensioner need face maladministration without help. There is support from NARPO and the Federation at local and national level and these two organisations should be the first port of call for anyone needing advice. However, there is also advice and support available via the web site of http://www.pipin.org.uk/ and also there is an email based support group send an introductory email establishing your bona fides to: whatsyourforcedoing[AT]yahoo.co.uk