Select Committee on Constitutional Affairs Minutes of Evidence


Examination of Witnesses (Questions 1-19)

16 SEPTEMBER 2003

PHILIP ELY OBE, CLARE DODGSON AND ROGER HAMILTON

  Q1  Chairman: Ms Dodgson, Mr Ely, we are very glad to have you with us. There is a lot you can tell us about the difficult task you have in controlling costs and ensuring that legal services can be provided. Is there a limit on how much funding can be diverted from the Community Legal Service budget to the Criminal Defence Service budget? Can this raiding go on?

  Ms Dodgson: I do not think raiding is the right word for it. I think what we need, Chairman, is a balanced portfolio in Legal Aid. Clearly we have cross-pressures in Criminal because Criminal is driven by factors that are not necessarily within the control of the Legal Services Commission, but we do need to keep a balanced portfolio. I think one of the things that the Commission needs to do as it forward plans is to look at what that portfolio should be and how do we maybe not absolutely ring-fence, but how do we balance investment that Government wishes to make in giving different client groups access to different types of publicly funded legal advice.

  Mr Ely: I think the linked point is whether there is to be a sufficient payoff from the management, particularly of very high cost cases. It is a new regime effectively, but it does not need me to tell you of the scale of the spend up at the top of the scale in terms of the high cost cases. My own view is that the management of that is achievable. It is early days yet and, of course, it involves negotiation, it involves case management, it involves negotiating fees and so forth. I think it can be done and most certainly it needs to be done. It needs to be high on our priorities otherwise the leaching effect from crime to civil and from legal help will continue unless—the unless I do not need to spell out to you—there is more funding.

  Q2  Chairman: It has been indicated to us by the Lord Chancellor's Department—indeed, the Lord Chancellor himself, I forget which—that one of the drivers for budgetary pressure is in the increased number of cases being brought to court by the police. Success, if you like, in terms of getting cases to court at any rate means more budgetary problems for you. That is an issue which does not seem to be considered, the budgetary implications of a drive to prosecute particular kinds of cases. Are you doing anything to make sure that it is considered and recognised when the decision has been taken?
  Mr Ely: I think awareness matters a great deal. Across the spectrum—and I speak slightly from ignorance in saying this, but I will do it nonetheless—I think very often there is insufficient account taken of the Legal Aid cost implications of new practice, new legislation and so forth and, of course, by the time that hits the fund, it is almost too late. I think our job even today, but wider than that, is to create an awareness of that and we have just got to do it as part of our job for the management and development of the Community Legal Service.

  Ms Dodgson: Being specific, Chairman, I think one particular area is to work with the Home Office more closely both at official level and also, I know that our ministers are working with their counterparts in the Home Office because there are some specific things that we need to get into, which I describe as "upstream". As policy thinking and planning is being worked through, how do we model and cost the consequences for Legal Aid on the back of that? I think that is very important, it is a specific area. As you know, I am relatively new to this particular job, but that is one of my personal priorities, to develop the relationships with my counterparts in the Home Office and that has already started.

  Q3  Chairman: Are there other policy developments which could help to counterbalance this, such as your efforts in mediation?
  Ms Dodgson: I think we have got some very real questions to ask ourselves and answer about mediation. Certainly I have been talking to a lot of groups that are not just the Law Society or the Legal Aid Practitioners' Group—as have many of my colleagues including my chairman—to say what is the role of mediation, what is the role of the not-for-profit sector, what is the role for organisations like the Citizens' Advice Bureau? How do we work with other government agencies? I used to work in JobCentre Plus, we had tens of thousands of advisers who were working with people on welfare benefit or who were looking for jobs. What links could we make there to say that we could signpost people who have housing or debt problems into Community Legal Service Partnerships, for example? I think you are absolutely right, there is a real role for us to start working with other government departments and other agencies because many of the clients are the same people. They are people who are vulnerable, disadvantaged, very often their lifestyles are chaotic, and if we can start with the individuals, their families and their communities and then build our services around them—I use the term "wrap the service around the individual" rather than "salami slice" the person into the services—then I genuinely believe we have got a job to be done. Personally I genuinely believe Legal Aid has got an important part to play in tackling social exclusion or bringing back social inclusion, whichever way we want to look at it. Chairman, I want to promote and all of my senior managers want to promote that agenda positively and constructively.

  Mr Ely: Going back to your specific on the question of mediation, I think one has to say that has been a long haul. I happened to notice that your last witness was Lord Mackay, the former Lord Chancellor, and I recall that a decade ago when he was Lord Chancellor he was particularly anxious to drive forward mediation in family work. I think enormous progress has been made, and it is easy to say that. I think the understanding of the role of mediation is coming up the agenda, but it is a long time. Our own pilots in relation to family, the FAInS pilot and the FAInS work, has taken time. Again, I am sorry to be negative, but I do not think one can do it for less, I think one has to develop and evolve it in that way and it is in with a chance.

  Q4  Chairman: You mentioned the very high cost of cases, but looking at the average case costs how do you intend to bring average costs per case on the civil side under control because they have been rising?
  Mr Ely: I think the first thing is to establish the core information, the database. Research is needed, research is being undertaken to find out what are the drivers of the average cost at the present time, let alone what is driving the increase. A simplistic view might say: "We are demanding quality. Quality has a price and that is contributory to the average cost increase". I do not believe it is, or it may be a part but I think there are fundamental points of information that we need. For example, why is the cost case of Firm A as against Firm B in a particular locality different? They are in competition, but equally there are elements in there that ought to be the same, one has got to find that and manage it. I know the chief executive has a pretty strong view on that.

  Ms Dodgson: I do indeed, Chairman. Two specific things. We have an evolving and, I believe, improving audit process which now looks much more at average costs per case and starts benchmarking those and feeding back to suppliers. The Committee may be aware that we categorise in Category 1, Category 2 and Category 3, and the Category 3 suppliers we have been targeting very hard and saying: "You are an outlier. You are a high cost provider. This is unacceptable. We need to understand why this is the case and we need to tackle it". We are moving back into Category 2 and we are feeding those costs back to the individual suppliers, so we are taking out the poor value high cost suppliers in significant numbers. The other point, Chairman, is that the Director of Policy & Legal, who is here with us today, is working on some proposals for next year which we are discussing at the moment and have not finalised—including we have not finalised them with our ministers—as to how can we get even more explicit about putting a cap on the costs of certain cases, and also incentivising and rewarding our high value high quality providers. At the moment we would say Category 1 because that is the best measure we have, but we are certainly on the case and we know that we need to do that. Early figures for this year are encouraging about the cost rise being contained to a lower level, but they are very early figures. I would not want to put on record to the Committee that we are confident about the outturn for this current year. We are seeing, as I say, some positive early indications.

  Q5  Ross Cranston: I was going to ask about the research that you have done on increasing the high average cost. Have you done comparable studies with the private sector? A lot of this work will not be privately funded income for crime, most of it is publicly funded. Where you can do comparisons, is it the case that lawyers are driving costs up again or is it just this view?
  Ms Dodgson: We have not done the specific cost comparators but I think you are right that we need to do that. We need to benchmark not just internally and look at what we are doing ourselves, but we need to make those cross-readings. We have just appointed a Performance and Change Project Director, which was announced yesterday as it happens, who is working to the executive board to take forward what I would describe as action research. Not a piece of research that takes three years to produce an outcome and gets published in a referee journal, but research that can genuinely help us plan and tackle cost containment and get a better picture on need and demand, supply and provision, map the two together, look at the different clusters and types of cases and clients and get a better fit between the Legal Aid spend and the wider private sector spend. I am very keen that with David Clementi's review of the legal profession in the round we recognise that Legal Aid has a very significant contribution to make to that map. In my personal view—as a public servant for 20-plus years—it has a unique contribution to make because we are helping the most vulnerable and disadvantaged people in society and, therefore, we need to make sure that Legal Aid is well presented as part of that wider map. Have we got what I would describe as the metrics, which I think you are challenging me for at the moment? No, we have not. Do I agree that we need to develop those and look more widely at benchmarking performance, not just cost? Yes, certainly I do, and we are on the case.

  Q6  Ross Cranston: On the criminal side, you do now have the pilots with the involvement of publicly employed lawyers?
  Ms Dodgson: We do.

  Q7  Ross Cranston: Has that thrown up any indications yet about probable costs?
  Mr Ely: I think it is too early to say. It has been running effectively for a year to two years and I do not know that there are even yet signals emerging because I think thus far people would not want to draw the conclusions they want to draw, whether it is in the public as against the private sector. If I could go back just one step. When you say has there been a comparison with the private practice and non-legally aided work in relation to average cost, the answer thus far as you have heard is no, but we are on it. I think there is a need to recognise—and others will plead this, but I cannot forget that I was a solicitor, I am even on the roll still—the actual benefit or profit to be derived from that same work. Now whether the Lord Chancellor's current investigation into supply and demand within the legal profession and so forth is going to begin to throw up the causes and the comparisons between privately funded work and publicly funded work, it is too early to say. Frankly, the supplier base will suffer if we do not get that right.

  Q8  Ross Cranston: Before I say anything more, I should declare an interest as a practising barrister, not that I did publicly funded work.
  Ms Dodgson: Two other points on the pilots. My experience in public service tells me that pump priming is sometimes necessary for pilots. I think we need to make sure that we take that into account. You are starting something up from scratch and it is new. Secondly, there is a wider question in my view, which brings me back to the David Clementi review work about a catalyst for change. Do we wish to put in pilots which are catalysts for change and drivers of doing things differently? We need to take a qualitative as well as a quantitative view of some of these new models would be my view.

  Q9  Chairman: Looking now at very high cost criminal cases, 1% would be work and 50% would be the cost. You have got quite ambitious targets for savings: £30 million in 2003-04, £70 million and £90 million. Can you meet these targets?
  Ms Dodgson: We recognise they are ambitious. In preparation for this Committee, Chairman, last week my Executive Board and myself asked that very question of ourselves. We believe within the broad financial parameters and the modelling that we have done, yes, they are achievable, but they are ambitious.

  Q10  Chairman: Did the Chancellor jump the gun when he announced that all new very high cost criminal cases would be managed under individual case contracts before we have had experience of the new regime settling down or being assessed?
  Mr Ely: May I be impudent and say I suppose that is really a question for the Lord Chancellor rather than for us. Having said that, there has been experience within the Commission of the management of high cost cases. I know it is now moving to crime where the figures are so much greater, but we have had similar experience in relation to the civil side and in relation to multiparty actions and that sort of thing, so there is a track record in relation to the management of cases on that scale. Obviously that is information that would have been shared and fed back to the Lord Chancellor's Department—as it was—and I think would lead to the conclusion you mentioned.

  Ms Dodgson: I think, Chairman, standing still was not an option for the reasons you mentioned earlier. If we are getting such a small proportion of cases consuming such a high proportion of the limited budget, then taking action that seems sensible, advised by our board directors—our chairman, as he has said, is a lawyer—we have expert lawyers, who are on our board, who have looked at this and said: "We have to do something. We have to do something that is as sensible as we can in the circumstances that we are in and this is the way to act." It may need to be learned from, improved and evolved as time goes on, but from what I have seen I think it was quite the right thing to do to get some sort of grip and handle on some of these very high cost individual cases and what is happening underneath the headline numbers.

  Q11  Peter Bottomley: To go back to the point that was remarked on before. I hope when you do this you will keep an eye on cases like the one of Superintendent Ali Dizaei, where the prosecution seemed to throw a fortune at a particular case, and then dropped it a week or two before it came up and then argued the merits of that case. I think that people, where there are contracts, ought to watch what is happening on the prosecution side and try to get some kind of equity. Now can I switch to Community Legal Services. On the question of Legal Aid providers, if there are shortages how has that happened and what happens to make sure there is not that shortage of providers?
  Ms Dodgson: This was the point I was making earlier on, that we need a better fix on need and demand and supply and provision. I describe it as "Can I have my green, amber, red, please, for different types of cases and different types of providers?" and looking to our regional directors—which we already are doing—to say: "You must know your patch." I was out in Birmingham yesterday with the regional director there. We met with a group of local suppliers of all different types and descriptions to talk to them about what was happening there. We need to understand where the red spots are, not just where we have undersupply, but in some instances, particularly in London—and my director for London is here—we have oversupply in certain categories. How do we shape our supplier base to best fit not just the budget but the requirements of the communities that we serve? Where we have hot spots and where we have genuine shortages, I am looking to each regional director to understand that, to work with the national operations director and to do things that are sensible about moving services around, moving what are called new matter starts around, which are new cases around the system, and making sure that we respond to those pressures as best we can in the light of the funds and services that we have available. We take them very seriously.

  Mr Ely: I think we must, as part of our remit, have constant anxiety as to the strength of the supplier base. It is something which is identified in this year's Annual Report and it is something that was flagged up in earlier years. It has been flagged up, and one has to grasp this firmly, in terms of pay and remuneration. My own view—and it is more than an anecdotal view because one is engaged in this—is that is a material factor in the pressure on the supplier base. Now at the moment supply and demand is not a cause for concern, but it is simply something we have to have a handle on as the chief executive has indicated. I think there are other ways. One moves on in terms of saying if there is not a supplier base at all, how do you deal with it? You have to look at alternative methods of delivery. We are engaged in that process—telephones in Wales and the West Country and that sort of thing—alternative means of supply which can try to meet it, but it must be at the forefront of our worries I think.

  Q12  Peter Bottomley: Regional directors should be open to clients, advocates and others who might spot gaps and make sure that attention is paid to them?
  Mr Ely: Yes. As far as solicitors are concerned, we are entering the next bid round currently and that has to engage that process as well. New suppliers have to have the opportunity to bid. It is very difficult, one has to say, against a constrained budget, but at least the opportunity must be there.

  Ms Dodgson: The other thing, Chairman, to mention is the Just Ask! website, which has been there for a while but has been relaunched recently and genuinely revamped. I have been into it myself. I have used it and have navigated around it. I went into welfare benefits—that was my previous history—and had a look. I genuinely think for people who have relatively straightforward queries the website is now offering an improved service, for a lot of people rather than having to go into the high street solicitor, make an appointment, go and sit there and wait, if you can go onto the Internet and use a site that lets you find out the straightforward things that you need to know. We are committed also to the website as well.

  Q13  Peter Bottomley: Do you look at the not-for- profit sector as a way of filling gaps, or do you look also at the general signs because you would know where there are gaps?
  Mr Ely: I think they are providing complementary services. I think the strengths of the not-for-profit sector have been particularly identified in all the recent reviews in relation to social welfare, housing law, et cetera. I think that is something we have to use where they provide—and in the end one comes back to this—better value for money—that is the service one should be using—where they do not, one should not.

  Ms Dodgson: I think complementary is the right word, or as partners, particularly housing welfare benefit, I am very struck by debt. The Citizens' Advice Bureau I thought did an excellent report on debt and indebtedness. For some people relatively small amounts of money can make the difference between them being able to float or sink in cash. I think we ought to be thinking through more strategically, which is a word managers use, it is overused, but I genuinely know what I mean by that. What should our supply base look like and what part should the not-for-profit providers and suppliers play in that overall picture? I think, yes, there is a real role for them, but they cannot be a substitute. There are some things that only legally qualified suppliers can and should do, and we need to tease out more effectively who can and should do what across the piece.

  Mr Ely: For example, in London—which I have chaired for some time—we are a part of the East London debt strategy, which is specifically designed to look at the way in which debt advice is delivered. At what point do you need the specialist input? How does that relate to and refer to others? How does it work into the region, for example, because conventionally in London we have done it by borough, which was not always right. Groupings of boroughs, if they can be thus persuaded, will deliver a mission together of the sort of advice you get. In London we think that might apply to other types of advice in different parts of London. We have a problem in London with the outer boroughs with shortage of supply. How do you meet that? Do you look at it in terms of groups of boroughs or do you look at the method of delivery? What part does the lawyer and the not-for-profit play in that? I believe that needs to be worked through.

  Q14  Peter Bottomley: You have a review of supply, demand and purchasing arrangements and you have the new contracts for solicitors next year. Can you tell us what the preliminary findings are on this and what the impact is likely to be?
  Ms Dodgson: They are still looking at the preliminary findings. I hope it will give us a much a better understanding of what the cost drivers are. In fact, I more than hope I believe it will give us a much better understanding of what the cost drivers are. I believe it will feed then into our work with the Department of Constitutional Affairs as to how do we plan not just for the next year, because I do think we have an operational timescale for how do we get to the end of this year and plan for the next operational year but more longer term, 18 months, three years, five years, going back to the wider ranging review the Government has commissioned of law as a profession, what position does Legal Aid have in that? I think we need to make sure to keep a grip on the short-term operational issues for Legal Aid. I need to make sure—because I am the accounting officer—that we keep a grip on the costs, that we can account for what we are spending. Also, I want to know what the drivers are in these different categories of provision and with different types of supplier, and what is the best value in both quality and in the cost issues, the value for money questions, to pull those two things and mesh them together more effectively. I would like to see that review of supply, demand and purchasing being a contributor to that, but it would not cover all the elements of customer service and quality of service, the Just Ask! website and things like that, which need also to be built into our strategy for the future.

  Mr Ely: I think the other thing in relation to need, the total information as to need, both from the research and from the local work that has been done within partnerships, within partnership areas, boroughs and the rest of it, at the end of the day I think it is relatively sophisticated. The top line model gives you information based on all the usual sources, if you like, and more. My experience is that in the main the local input that is added through the partnership is, I would say, pretty good, it is very often anecdotal. Going back to the start of your question, that is filling it in, and I think the picture that emerges and the information that the Commission has is much greater than it ever was. Now, of course, I accept that one then comes back to the question of how do you fill that need in relation to the current contract round given the limited resources, and I am not going to attempt to square that circle. I think it is our job, I may say, to do the best, to identify through the regional directors how the funding is to be spread round against the background of that information, but I think the information is good enough. I would share your concern as to whether it can be met.

  Q15  Peter Bottomley: Ms Dodgson, I think we ought not to let you come here without saying to you and to those who work for you and with you, that in each of our constituencies every day there are people in trouble who find that their problems are, if not totally solved, at least resolved in a far more satisfactory way than what we would expect and we are grateful for the services which are provided.
  Ms Dodgson: Thank you very much.

  Q16  Peter Bottomley: Let us move on to the last section of our submission. Solicitors can be encouraged into publicly funded firms by sponsoring students on Legal Practice Courses. Is there an evaluation of the success you get from this?
  Mr Ely: It is so awful to say: "It is too early again", it is a terrible thing but last year was the first. It is monitored and I will not go further than that. We see it as our job to keep a grip on that and I believe it is working. I believe they have been placed in the right places and it is a base for further supply. Beyond that, I think it is silly to try and answer it.

  Q17  Ross Cranston: I want to ask a few supplementaries about this area. The Law Society uses this graphic phrase "advice deserts" and the latest phrase is hotspots and so on. How big are these deserts and what parts of the country are we talking about if they are deserts?
  Mr Ely: Wales inevitably because of the difficulties of access within the Principality, but that is being met because partnerships have been created. They have funding not just from the Government but from other sources as well to deliver supplies through. Deserts is the wrong expression of Wales, I am sure, but that is one you would readily identify and inevitably the rural areas. Coming back to the question of supply, we have a conundrum as to how to meet demand in those deserts and it goes something like this. If the original driver is to say that we want quality service, we want contract, we are going to drive up standards all the time and we require supervisors and so forth, that imposes constraints inevitably. In order to meet that the system was developed on the basis that firms were allowed to do work under tolerance—as it is called—where they could do work which was not their specialisation, provided they met certain standards again. The conundrum we have is to say does one allow tolerance work to continue in order to assist in the advice deserts? I believe the answer is firmly yes, provided again one is doing the job of supervision properly in different ways but tolerance is yes, whereas perhaps within the conurbations one would say tolerance is no, because you should be developing specialisations.

  Q18  Ross Cranston: You are adopting that passport road to tolerance, are you?
  Mr Ely: Yes.

  Ms Dodgson: Yes, we are indeed, and just to reiterate there is the Just Ask! website and the telephone pilot.

  Q19  Ross Cranston: Yes. Can I press you on that. You are relaunching that. I have used it as well and it is excellent, but I just question whether there are people out in rural Wales who use Just Ask!
  Ms Dodgson: That is a fair comment


 
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