Select Committee on Public Accounts Minutes of Evidence

Examination of Witness (Questions 1 - 19)




  1. Order, order. Good afternoon, ladies and gentlemen and welcome to the Committee, Sir Hayden. Thank you for coming today to speak to us about the Comptroller and Auditor General's Report on the Collection of fines and other penalties in the Criminal Justice System. For years I used to practise in the criminal courts as a barrister; I do not know whether I should declare that. I no longer practise but I do know a little bit about the problems you face in the collection of penalties and other fines. May I start by referring to Appendix 2 on page 28? You will see it refers to a very large number of reports into the efficiency and effectiveness of financial penalties over the last 13 years, yet in 2000-01 we learn that only 63% of financial penalties were collected, in 2001 the rate fell to 59%. It is a pretty poor record. Why does performance continue to be so poor?

  (Sir Hayden Phillips) Despite the giving of all the guidance, much of it in quite some detail, the problems have remained really quite intractable. Essentially there is a number of reasons. First of all, until a year ago the system was very much a divided system with no-one really in charge. I hope we have made progress in changing that. Secondly, here is an area of great importance but of very hard work, often extremely difficult work, which has not been given the priority which it necessarily ought to be given for a variety of reasons, one of which is resources. We have done something now to change that. Thirdly, it is intractable for a lot of other reasons. A lot of the problems in enforcement are about tracing the people concerned: a lot of them cannot pay, many of them will not pay. You are dealing therefore, to put it crudely, with human nature as well as with bureaucracy and systems. I want to try to persuade the Committee if possible, that we are trying to position ourselves now to be able to achieve more and better in a way which was not easily possible in the past, despite all the guidance which has been given out.

  2. That is what I want to come onto straightaway. There are intractable problems with the whole system. You are often dealing with an underclass of people with no means anyway, no fixed employment, that is why they are in the courts, problems of means to pay, keeping track of defaulters, that on top of weaknesses in training, poor record keeping, incomplete management information. You might feel you could address those latter points but the former ones are far more difficult. Does all this add up to a fundamental weakness in the way that fines and other financial penalties are enforced or indeed a fundamental weakness in the whole system?
  (Sir Hayden Phillips) There are and have been systemic problems. I actually believe—you might say optimistically—that we can put in place a range of measures administratively which can make a real difference. I have been encouraged by the way in which magistrates, their staff, other stakeholders in the system all across the country have this year come together in five regional conferences to share best practice, to talk about new standard setting, sharper timescales. We have for the first time a performance target for the payment rate. We are making funds available to each magistrates' courts committee to fund what they believe is necessary to improve their performance. I do accept that not enough has been done and not enough has been achieved, but we are positioning ourselves to do better. We will still have to deal—and this requires a lot of detailed and careful work by staff and magistrates on the ground—with a lot of people who are fined, who cannot pay or will not pay and whose social lives and backgrounds are such that it is going to be very difficult to tackle that. We have an information exchange system this year for the first time with the Department for Work and Pensions and we can go to them, when we have tried every other means and we cannot find them. We have raise £465,000 this last year in fines which would otherwise have been uncollected as a result of better being able to trace defaulters. In those sorts of ways I do believe we can make progress.

  3. I want to turn now to the victims. Case study 5 on page 23 is an interesting case. There you have a victim who is still waiting ten years after the event for compensation. That is a pretty sorry saga, is it not? There are other cases on that page which are perhaps not quite as serious as that. What are you doing to ensure that victims do get these awards paid to them as quickly as possible?
  (Sir Hayden Phillips) I agree with you about that; I am not pretending that is a good story. The present arrangements are that victims who are waiting for compensation have to wait for compensation until the funds are brought in from the offender to enable that to be done. Suggestions have been made from time to time that what the Government ought to do was produce a compensation fund, funded by the taxpayer, which would then pay compensation out to the victims immediately and it would be refunded over time. That is probably the only way in which that situation can readily be changed radically, other than by what I hope will happen anyway, which is a progressive improvement in the speed of collection. Obviously a fund of that nature raises important issues of principle about whether the taxpayer should be asked to do this and raises issues of cost.

  4. A lot of the problem with the courts is delays; a lot of the problem with enforcement is that it has to be referred back to the courts. Some courts are trying to delegate some responsibilities to administrative staff. Is there any scope for easing this process by reducing referrals back to court and delegating more work to staff?
  (Sir Hayden Phillips) The current position on delegation, which is laid out in the statute and regulations is actually clear. I have no reason to think that courts do not use that delegation to the maximum. If you are going to transfer more responsibility to court officers, you do require primary legislation to enable that to be done so that officials can get on and deal more directly and regularly with the person who has been fined, try to find ways to get the fine in more quickly, without having to go back to court.

  5. That is presumably a good process and we should encourage that process.
  (Sir Hayden Phillips) We should encourage that process and this is something which will be on the list for legislation at some point.

  6. Paragraph 2.17 notes that 90% of penalties which are written off, are written off simply because the offenders cannot be traced. What are you doing to try to help magistrates' courts keep better track of defaulters?
  (Sir Hayden Phillips) I agree with you that the level of write-offs is important. Clearly the payment rate is the thing we have to try to improve. We also want to see the level of write-offs going down, because on the whole they indicate that penalties are not simply unenforceable but have been too difficult to enforce. Last year the write-off rate went down from £74 million the year before to £57 million, which is an indicator of a degree of improvement there. The main way in which we want to speed up the process is by giving magistrates' courts committees the resources and the information to be able to put more people onto the case more frequently, to use new ways of trying to contact people. Simply by putting more effort into the process, which they can now do from 1 April this year, we can try to make real progress in that area. Some of the improvements you have touched on and implied by your questions, do require legislative action as well as administrative action.

  7. May I ask you now about your performance data? If you look at paragraph 1.2, you will see that some courts cannot even distinguish between civil and criminal impositions. What are you doing to try to improve the reliability and consistency of data so that you and we know what is going on?
  (Sir Hayden Phillips) This essentially means changing existing IT and manual systems into one which is in a standard form and which can be relied on to provide local management information and on a monthly, quarterly, annual basis can sensibly be aggregated nationally rather than the present range of differing systems which exists. We have a programme to put that in place. The infrastructure for the IT has been rolled out across 75% of magistrates' courts committees, but it will be a little while before we have consistent and reliable data for every area which can build up a clear national picture.

  8. Can you just look to the further horizons? We discussed the fundamental weaknesses in the whole system of fines, in tracking offenders, in getting them to pay and all these other problems. I should like to ask you to ponder on what you are doing to look at the wider sentencing framework and whether there are other ways forward. If a penalty is unlikely to be paid and we all know that many of the people who come through the courts are unlikely to pay a penalty, cannot pay a penalty, will not pay a penalty, already have a large number of fines outstanding against them, all the other reasons we are all familiar with, do you think the courts have sufficient sentencing options available to them? Should we resort more to sequestration of treasured possessions such as cars, curfew orders, weekend prisons, all these other options and get out of this fixation on fines which you apparently have so little success in enforcing?
  (Sir Hayden Phillips) There is a range of things we would want to look at. There are some in the Crime Sentences Act which may be brought into force, which is being able to impose community penalties where fines are found not to be right, indeed to impose a community penalty where otherwise someone might be sent to prison for default. Both in Australia and New Zealand they have found a battery of measures like that, together with other options such as registering people thereby ensuring they cannot get further credit facilities, clamping vehicles, taking away people's right to drive, looking at more fixed penalties if necessary. TV and vehicle licence evasion accounts for something like 27% of all fines. Maybe they are suitable for fixed penalties. There is a range of measures which will require legislation which we can look at to broaden the range of penalties which is available to that progressively as well as improving the system we have, we actually have a more sensitive range of penalties which magistrates can reach for.

Jon Trickett

  9. I am actually shocked by this report. I guess I knew intuitively that the situation was not very good but it is quite shocking how poor our collection rates are, is it not?
  (Sir Hayden Phillips) The payment rate has hovered around 60% rather persistently for a while. We clearly want to get that up. We set a target that this year it should reach 68% and I hope that with the extra £10 million of resources we put into the enforcement budget, we will stand a chance of positioning ourselves to make a real breakthrough here.

  10. Are you able to say whether you are going to achieve the 68%?
  (Sir Hayden Phillips) We have been to every magistrates' courts committee in the country. They set out what they wanted to use new resources for. We have been able to meet every bid in full. They have their own targets and it is now down to them to deliver the results. I can go into great detail about the practical things which need to be done, but there is a chance here that this could work and we could gradually begin to see a change in the pattern. Having said that, one does actually have to take account also of the number of penalties which are cancelled. I am not talking about write-offs here, just having an overall look at performance on a rolling basis.

  11. I am trying to understand the mathematics. It strikes me that there are two or three separate processes by which this money disappears from the accounts and I want to try to understand where the 60% and 68% derive from. I note in my own area, West Yorkshire, the figures we have show that £11.7 million of fines were paid but £7.6 million were either written off or cancelled. That is quite a shocking figure for the people of West Yorkshire. Could you explain briefly the difference between the write-offs and the cancellations? On what basis is something cancelled?
  (Sir Hayden Phillips) There is a whole series of reasons why you can do it. If someone is committed to prison because they have defaulted on a fine, it is cancelled. If they are in prison for another offence, it is cancelled. If the penalty is remitted in whole or in part because of a chance in circumstances, when that is done that can be cancelled. If a conviction or sentence is set aside, it is cancelled.

  12. How is a decision taken to cancel a debt?
  (Sir Hayden Phillips) By the court. It is a judicial decision. It is not just unenforceability; this is a whole series of categories where cancellation is required.

  13. Is the figure of 60%, going up to 68% we hope, calculated after the cancellations have been removed or is it a gross figure rather than a net figure?
  (Sir Hayden Phillips) The statistics keep away the issue of cancellations and write-off from the 60% figure, which is simply the amount of money collected in any one year against the impositions made in that year. It is crude, but I am told it is the clearest and simplest thing we have been able to produce.

  14. The figures in Appendix 1 do not make sense. They do not add up to anything like 100% on page 26 of the report. I imagine what is happening is that we are saying the 60% is a netted figure after we have written off and cancelled debts, is it?
  (Sir Hayden Phillips) My understanding is that the payment rate is as I have described. It is not, as it were, infected with the cancellation or write-off rates. It is simply the collection in any one year of fines, set against the amount imposed in any one year.

  15. Can the C&AG just confirm that is the case?
  (Sir John Bourn) Yes.
  (Sir Hayden Phillips) Taking one year with another, you are right to say that you have to take account also of the cancellation rate and also of the write-off rate. What you want to see is the payment rate going up and the write-off rate coming down and that is where we are beginning to be more successful.

  16. Looking at West Yorkshire again as an illustration rather than taking a constituency issue, the cancellation rate is the second highest in the whole country at 35% of all fines. In some areas there is no cancellation of any kind and many of them are less than 10%. I accept that there are differences in culture and background and socio-economic status and all the rest of it, but a villain is a villain whether they are poor or not. I do not really accept any defence in terms of socio-economic status. Why should it be that the cancellation rate should be several hundred % higher in some areas than others? Why is West Yorkshire failing?
  (Sir Hayden Phillips) I do not know the answer as far as West Yorkshire is concerned. What you can get in these figures is a relatively small number of relatively high flyers which then distort the position. That is made clear in the NAO report. I would have to go back and look at the West Yorkshire position in some detail and ask them why it was made up in the way it was.[1]

  17. Is it each magistrates' bench which does the cancellations or is it the magistrates' committee or the clerk to the magistrates. What is the actual mechanism for cancellation?
  (Sir Hayden Phillips) The cancellation is done by the relevant court in any particular magistrates' courts area.

  18. So in my case it might be Pontefract magistrates' bench.
  (Sir Hayden Phillips) It might be.

  19. Has anybody bothered to look whether beneath the sub-regional level, that is West Yorkshire, Nottinghamshire, there are big differences between one magistrates' bench practice and another?
  (Sir Hayden Phillips) In terms of cancellation I am sure we could get those statistics and the West Yorkshire magistrates' courts committee can be asked to give you an analysis of that. We have not tended to concentrate on that so much as on write-offs because write-offs tend to be the area where enforcement is possible but has not occurred, whereas cancellations are automatic and they are required by law.

1   Ev 26-27 Back

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