Court of Protection (Amendment) Rules 2002 and The Court of Protection (Enduring Powers of Attorney) (Amendment) Rules 2002

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Mr. William Cash (Stone): It is a great pleasure to serve under your chairmanship, Mr. Hood, not only on this occasion, but on the many occasions when we meet in the European Scrutiny Committee. That said, I shall make only one or two comments, because most of what I wanted to say has been said, and I do not believe in repeating arguments for the sake of it.

The hon. Member for Torridge and West Devon (Mr. Burnett) has made a number of extremely important points, and I am glad to endorse on behalf of the official Opposition his remarks about Lord Kingsland, the shadow Lord Chancellor, who made an important contribution to this matter in another place.

I have the memorandum from the Lord Chancellor's Department in answer to the Joint Committee on Statutory Instruments, on which I served once upon a time. With regard to the emphasis of the Public Guardianship Office now, it states that

    ''the fee has increased to reflect the true cost of the work involved in registering an enduring power of attorney.''

We all want things to be done properly and efficiently but, for many of the reasons that have been given, there are significant problems in finding the money. I am thinking of the less well off, the poor and people with disabilities and their relatives, who suffer stress and strain; vulnerable people who need to be protected. I share the concern about what appears to be a rather callous increase in fees in these extremely difficult circumstances.

I am also concerned because the rises are well over the rate of inflation. It is up to the Parliamentary Secretary to try to justify that. The whole thing seems to be a bit of a ramp. Given the constraints in other parts of the public service, I cannot understand the multiple fees increases of up to as much as three times. There may be an explanation, and I should be interested to hear it.

I agree with the previous remarks about the changeover in personnel and am concerned to hear how people get on the panel. I share the disquiet of Lord Kingsland and the hon. Member for Torridge

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and West Devon about the difficulty of obtaining the information that one would expect to be able to get from the Public Guardianship Office. Having said that, it would be pointless for me to repeat any more. I look forward to the Parliamentary Secretary's comments.

10.15 am

The Parliamentary Secretary, Lord Chancellor's Department (Ms Rosie Winterton): It is a great pleasure, Mr. Hood, to serve under your chairmanship.

Several concerns have been raised, and I want to respond by setting out in some detail the reasons behind the increases and decreases in the charges. I start by repeating the astute observation of the hon. Member for Torridge and West Devon that the Public Guardianship Office plays a crucial role in the lives of some of the most vulnerable people in society; people who suffer mental incapacity. Its clients include people who suffer from mental illness, have learning disabilities, or have suffered brain damage, as well as elderly people who suffer the effects of dementia.

I appreciate that there are concerns that some of the fees have been increased, and I shall explain the principles that we have followed in setting the new fees. Hon. Members may know that the Public Accounts Committee conducted an inquiry in 1999 into the affairs of the Public Trust Office, which was the predecessor of the Public Guardianship Office. The report, titled ''Public Trust Office: Protecting the Financial Welfare of People with Mental Incapacity'', was published in July 1999. As well as making recommendations for improved systems and procedures for the raising, recording, review and collection of fee income, the report examined how well the PTO was recovering its costs through fees.

The power to charge fees is contained in the Mental Health Act 1983, and successive Governments have followed the consensus that, as far as possible, the cost of services should be recovered through fees. They have also agreed that people who need to use services but cannot afford to pay should have their fees waived, and that cross-subsidy should be eliminated as far as possible so that users of one service do not subsidise the users of another.

Mr. Burnett: It might be appropriate at this stage to repeat my earlier question. Did the Government consider levying a reasonable, perhaps means-related, annual charge for management by the chief executive of the Public Guardianship Office?

Ms Winterton: That may become clear as I continue my explanation.

The PAC found that there was cross-subsidy between private receivership clients and clients whose cases were managed by the Public Trust Office. Clients with private receivers were paying more than the cost of the services they received in order to cover costs that should have been borne by clients whose cases were managed publicly. At the PAC hearing on 24 February 1999, the notion of cross-subsidy between clients with

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mental incapacity was described as grotesque and offensive.

The PAC concluded that the PTO should examine the scope for efficiency savings to bring down fee levels, but also noted the Lord Chancellor's Department's view that some element of public subsidy was required for receivership cases managed by the office. The PAC report touched only on the issue of subsidies between clients in private and public receivership. It did not touch on issues of cross-subsidy between private receivership clients, or between private receivership and the enduring power of attorney clients. The PTO's quinquennial review report, published in November 1999, recognised that there was an even wider problem of cross-subsidy than had been highlighted by the PAC.

The report's author, Ann Chant, noted that, in many cases, people of modest means were paying far more than they needed to for the PTO's services and were also paying for services received by others. The report recommended that a simple, viable and auditable system of fees should be devised and that the PTO's financial and management information systems should be enhanced to allow them to support a business-based fee structure, to be agreed with the Treasury.

Mr. David Heath (Somerton and Frome): Has not a subsidy between classes of clients been replaced by a cross-subsidy between past clients, who were underserved where there was under-investment in the service, and current clients, who are paying for the catch-up process described by the Lord Chancellor's Office?

Ms Winterton: That should not be the case. I hope that some of the improvements that we will come on to will benefit all clients.

Following the quinquennial review, the Lord Chancellor published a consultation paper in April 2000 setting out his plans for the reform of the PTO to meet some of the criticisms that had been made by the PAC. That resulted in the transfer of the Court Funds Office to the Court Service, the transfer of public trustee work to the Official Solicitor's Office and the establishment of a new agency, the Public Guardianship Office, to look after the affairs of people with mental incapacity. In the months that followed, much detailed work took place to take on board the outcome of the consultation, to determine the business processes of the new agency, to establish its new systems and to refocus its culture towards providing responsive services to meet its clients' individual needs. That work culminated in the publication of detailed plans for change by the Lord Chancellor in December 2000 in the report ''Making Changes''.

By March 2001, shortly before the launch of the Public Guardianship Office, the systems and future business process of the new organisation had crystallised and it became clear that the fees regime introduced in September 2000 would not meet the objects of cost recovery or eliminate cross-subsidy. My predecessor in the Lord Chancellor's Department quickly commissioned work to look at the fees

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strategy to ensure that the Public Guardianship Office was financially viable and to introduce a fair regime for clients.

A fees strategy working group was set up to advise on the regime, comprising officials from not only the Public Guardianship Office but the Lord Chancellor's Department, the Court Service and the Treasury, as recommended in the quinquennial review. In developing that strategy, an independent management accountant was appointed who previously had the task of identifying the costs of civil court business and worked with the senior costs judge on benchmark lawyers costs for civil cases in the fast and multi-tracks. The fees strategy working group concluded that the fee structure was unrealistic and would not deliver the level of service required by clients. It recommended a fees regime that was closely aligned to business processes and was justifiable in terms of the underlying cost, with public funding focused on the most vulnerable group of clients.

The new fees fulfil those aims. They ensure that fees reflect costs and eliminate cross-subsidy between groups of clients. They will allow the Public Guardianship Office to develop and improve its services and, most importantly, they contain improved protection and support and represent better value for poorer clients.

Mr. Burnett: Does the Parliamentary Secretary agree that it is important to encourage people to register powers of attorney at the appropriate time? Given that there are invariably legal fees to pay in addition, the new fee structure will prove a discouragement.

Ms Winterton: I do not believe that it will. We have evidence that that has not happened since the new scheme was introduced. I will come later to the reasoning behind the figure of £230 and hope to reassure the hon. Gentleman on that.

Hon. Members have focused on where fees have increased. I will respond to their concerns, but I want to point out first that there has been a reduction in fees. For protection cases, the commencement fee—which covers the cost of processing a first application to the court—has been reduced from £230 to £65. In court of protection cases where clients have net assets of less than £16,000, their representative can be given authority to manage a client's finances under what is termed a short order and will have to pay only the £65 fee.

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Prepared 27 June 2002