Legal Aid Review by Sir Ian Magee

LSC to go, Social Welfare Law spend devolved?

Review of Legal Aid Delivery and Governance
By Sir Ian Magee CB, March 2010

Sir Ian Magee’s review, commissioned by Ministers in autumn 2009, is likely to precipitate a big shake up in legal aid and the wider Community Legal Service. The Legal Services Commission (LSC) looks set to be replaced, following new legislation, by a new executive business agency directly accountable to the Minister. While many in the advice field expected this move by the Minister to gain control, a recommendation to explore scope for pooling and devolving legal aid spending on social welfare law has flown in from left field.

Magee’s brief was to look at arrangements to ensure Ministerial accountability for legal aid and to explore the possibility of separating Community Legal Service (CLS) and Criminal Defence Service (CDS) spending. Following relatively informal stakeholder consultation, he concludes that urgent action is required to address serious shortcomings in LSC – Ministry of Justice (MoJ) relationships (particularly around policy making) and legal aid governance and financial controls. He finds no evidence to support CLS/CDS separation but instead thinks that money spent by LSC on social welfare law advice (£136m in 08/09) could be separated from other civil spending and devolved to a more local level.

Abolition of LSC

Four options were put forward for the future of legal aid governance, but Ministers were quick to announce on 3 March their desire to remove the LSC – a non departmental public body (NDPB) and bring legal aid policy and delivery into the Ministry. Carolyn Regan, Chief Executive of LSC, promptly announced her resignation.

The move, which has been backed by Conservative justice spokesperson Henry Bellingham MP, will require primary legislation. It will also require establishment of new mechanisms to keep legal aid decisions away from political interference. A new legal aid tribunal to hear complaints and appeals would be established at a cost of £120,000 and with £0.5 - £1 million running costs.

The new executive legal aid agency would simply handle legal aid commissioning and procurement within the Ministry. It would not make policy or give advice on policy – an area of much confusion in recent years with both LSC and MoJ having policy teams. The new body would be akin to Job Centre Plus and the Pensions Agency (which come under Department for Work and Pensions) and the UK Borders Agency (under Home Office).

In recommending this option, Magee noted widespread criticism of the LSC, including recent National Audit Office reports, administrative burdens and an over-focus on inputs rather than outcomes. A review of the Commission was long overdue since it was created 10 years ago.

Abolition and creation of a new agency will clearly take some time and will not interfere directly with the current round of civil legal aid procurement. In the short-term, LSC and MoJ are tasked with reconciling their respective policy functions and policy focus, improving governance (including how differences in public administration and service arrangements in Wales are taken into account) and tackling financial controls, forecasting and potential efficiencies and shared services.

Civil legal aid spending

Despite a 6% shift in spending from CLS to CDS spending during the last ten years, Magee doesn’t think that simply separating the two funds would protect civil from further encroachment. He did, however, suggest three options that would all require Treasury approval: reclassifying CDS as Annually Managed expenditure, ring-fencing CLS and separate votes in parliament on civil and criminal spending.

Social Welfare Law (SWL)

Sir Ian notes that spending on SWL (community care, debt, housing, employment and welfare benefits) increased by 13.4% between 2006 and 2009, producing a 10.4% increase in acts of assistance. But he also notes the slower than expected roll-out of CLACs and CLANs and that the unified civil legal aid contract doesn’t enable providers to deliver flexible local services in a way that other funding does. The LSC’s approach to SWL is ‘intrusive’.

The options Magee puts forward to tackle this are:

Pool SWL funding available to CAB with OGDs [other government departments], such as BIS, and allocate to CAB as grant-in-aid for distribution to local offices
Channel resource through local authority Local Area Agreement framework to fund local advice services
Allocate some areas of funding through local courts overseen by criminal justice boards, family justice boards and local strategic partnerships
Regional contracts with lead providers (lead providers would sub-contract with smaller, locally based services depending on client need and provision in the area)

The Ministry of Justice will be evaluating these options and have not given an early indication of their response. AdviceUK will be seeking opportunities to explore these options with the Minister and indeed other parties as soon as possible. They could clearly have profound implications for our members delivering SWL advice.

View and download the report: http://www.justice.gov.uk/publications/docs/legal-aid-delivery.pdf

Background

In October 2009 the Ministry of Justice announced a review of legal aid, to be conducted by Sir Ian Magee.

Sir Ian's review was charged with assessing the delivery and governance arrangements of the legal aid system and making recommendations to:

explore the separation of the Criminal Defence Service (CDS) and Community Legal Service (CLS) and options for doing so effectively and efficiently should that be the recommended way forward
provide for effective and transparent financial management of both funds and their administration
provide for effective ministerial accountability and policy direction in respect of both the CDS and CLS, while continuing to ensure that every application to the CLS and CDS funds are decided fairly, within the criteria, at arm’s length from government
identify appropriate delivery models for both the CDS and CLS and their relationship with the ministry.

Phil Jew from AdviceUK and Jacky Peacock from AdviceUK member organisation Brent Private Tenants Rights Group, met with Sir Ian Magee and his team on 5 January 2010. We said to Sir Ian:

We are generally supportive of the separation of CDS and CLS but we do take note of the fact that civil spending has increased recently and that ring-fencing civil legal aid will not necessarily protect the budget from future cuts. We also acknowledge that separation may increase administration for solicitors that practice in both fields. Our members only provide civil legal advice under legal aid contracts so we cannot comment on that. On the whole, though we think that separation would prevent future encroachment on the civil budget by criminal defence services and we accept that we will have to argue strongly for political commitment to maintaining civil legal aid spending.

We also mentioned our concern about how the civil budget is used. It is generally felt by advice providers that the current fixed fee arrangements do not cover the true cost of delivering good quality advice. The emphasis in recent years has been on quantity rather than quality. The unintended consequence of recent legal aid reforms is documented in the two reports we gave to Sir Ian – It’s the System Stupid! and Time Well Spent. The way that legal aid funding works also encourages litigation – the fee structures make delivery of a legal aid service in many areas only viable if the provider is moving cases over to certificated work. This is surely perverse and adds cost not only to the legal aid budget but to the courts too.

We strongly believe that administration and management of the CLS should be free from political control.

We have been concerned for some time about the LSC’s direction of travel regarding civil legal aid and the wider CLS. Much of our concern is documented in our It’s the System Stupid! report.

Legal aid procurement policy concerns us because, as stated above, we think the emphasis is moving from quality. The 2010 procurement process seems increasingly a tick box affair, wherein quality can only be managed after contracts have been awarded. We are working on a more intelligent approach to commissioning of advice services (see BOLD Project).

Responsibility for the development of the wider CLS as a network of quality assured providers was of course was given to the Commission in 2000. However, their investment in this has long since proved to be unsustainable. The CLS Quality Mark has not been developed and is now charged for. The CLAC and CLAN experiment has caused considerable concern among providers and has struggled to get off the ground. The bulk of the Commission’s activity has gradually withdrawn to procurement of legal aid. Meanwhile it retains responsibility for the CLS and advice that is not within the scope of legal aid and seeks an influence over development and funding of such advice – notably via joint procurement of CLAS with local authorities. We increasingly think that the two roles are incompatible and that responsibility at Government level for development of advice provision apart from legal aid procurement should be taken away from the Commission and properly resourced. The MoJ may be the best place for wider CLS matters to reside but it is vital that other departments like CLG, DWP, HMT and HMRC have a stake in development.

The MoJ has taken a much keener interest in legal aid and wider CLS issues over the past year or so and we have had useful engagement with the team working on the LALL study. We would support the retention of this team within MoJ and the structures that have been set up (the LALL Steering Group and associated sub-groups). These have enabled on-going dialogue between advice providers, representative bodies, other Government departments and bodies and other stakeholders. They have meant that the Ministry is able to identify barriers to effective delivery and improvement of advice services and hopefully put in place measures to address them. This function, as fixer of problems and obstacles to advisers doing their jobs effectively is surely the role of a Government department.

Finally, we mentioned the need for policy makers to really understand demand and client need. We have pioneered work on a systems thinking approach to advice. This is explained in the aforementioned It's the System Stupid! report. A report on further work being carried out in Nottingham is now available. This work shows the scale of demand that is caused by the failure of public services and administration, the waste that is caused by system conditions and the role that advice services could play if freed up to tackle such failure and waste and concentrate on more valuable work. The value clients place in advisers having time to provide a humanized service should also be noted by policy-makers (see Time Well Spent).