House of Commons - Constitutional Affairs

Select Committee on Constitutional Affairs Fourth Report

3 The concerns

15. Before we come to consideration of the further work which needs to be done, we first consider the Government's justification for its original proposals to cap public funding for work in this area.

The Government's justification for imposing a cap on public funding

16. The main purpose of the Government's original proposal was avowedly to control legal aid expenditure in this field, which has risen significantly over the past three years. The consultation paper states:

The legal aid costs of providing advice and representation in immigration and asylum work (including judicial reviews) have risen from £81.3m in 2000-2001 to £129.7m in 2001-2002 and £174.2m in 2002-2003. A number of factors have increased expenditure on legal aid for immigration and asylum, some of which are beyond the control of the LSC. These factors include continued increases in the number of asylum seekers, the increased rate at which cases are processed by the Home Office, the corresponding increase in appeals dealt with by the Immigration Appellate Authority (IAA) from 19,395 appeals determined in 2000 to 64,125 in 2002 and the effects of the dispersal policy. With the introduction of funding for representation before the IAA and IAT (Immigration Appeals Tribunal) it was anticipated that there would be a rise in total spend however these factors together do not account for the dramatic acceleration in only the last three years in the costs of public funding in this area of law. Average costs continue to rise and the LSC estimate that average costs per matter start have increased by 93% from 2000-2001 to the present date.[

17. In its submission to the Committee's main inquiry into immigration and asylum appeals, the Legal Services Commission set out a similar list of cost drivers.[15] In that submission, the LSC stated that the "average costs of claims have risen during contracting. We estimate the current rate of increase to be at 12% a year."[16] However, this appears to contradict the Department's figure of a 93% increase since 2000-2001 mentioned in the consultation paper (see above).

18. In answer to a Parliamentary Question about the responses to the consultation, Lord Filkin, Parliamentary Under-Secretary at the Department for Constitutional Affairs, said:

19. We recognise the competition for resources, including in the legal aid budget.

Respondents' concerns

20. Respondents to the consultation acknowledged the increasing expenditure on legal aid for immigration and asylum. However, they have identified a number of other costs drivers, which are either not mentioned, or not fully explained, in the consultation paper. Examples include:

The fact that the increased rate of decision-making in asylum cases by the Home Office has been part of a drive to clear the backlog of cases; it has therefore led to a concentration of costs which would otherwise have been spread out over a longer period

The introduction of stage billing in April 2002, which they suggest resulted in a "pull-forward" of costs into 2002-2003 that would otherwise have been paid in subsequent years

The implementation of the Human Rights Act in October 2000, which has increased both the complexity of immigration and asylum procedures and the range of matters on which applicants may legitimately seek advice

Increases in the hourly rate payable to contracted firms in London. The total increase in hourly rate since the beginning of contracting has been just under 19%

Home Office practices, including the practice of inviting applicants based in London to attend a substantive interview in either Liverpool or Leeds

The IAA's practice of listing appeals away from where either the appellant or their representative is based, which adds to the costs under Controlled Legal Representation

The introduction of support, administered by the National Asylum Support Service (NASS), which has created a significant increase in workload for legal advisers and practitioners and which has, in turn, been exacerbated by the inefficient administration of NASS

An increase in workload when preparing an appeal as a consequence of Practice Directions issued by the IAA. For example, the IAA now requires the production of skeleton arguments, witness statements and case history chronologies in all appeals.[18]

21. Respondents also suggested that it could be reasonably predicted that, in the absence of any new measures, costs will reduce substantially in forthcoming years. The Refugee Legal Centre and other organisations, such as ILPA, have listed a number of cost-reducing factors which need to be taken into account. These include the following:

The "pull-forward" of costs into the year 2002-2003 as a result of the introduction of stage billing will not distort costs for this and subsequent years
The number of asylum applications is set to fall by 35% from the number in 2002
The projected number of decisions for the year 2004 (based on application targets which the Home Office is meeting) will fall by over 50% from the peak years of 2000 and 2001
Government figures give a strong indication that the number of appeals will peak this year. Thereafter, there will be a reduction in the volume of appeals of well over 50%
The continued expansion of legal service provision in dispersal areas will reduce costs
The increase in the scope of non-suspensive appeals, now covering 24 countries, is also likely to reduce expenditure under Controlled Legal Representation.

The Home Secretary's announcement of 24^th October—that up to 15,000 long-standing asylum cases will be granted permission to stay—will serve as another, and potentially very significant, cost-reducing factor. This is in addition to his earlier announcement proposing to replace the two-tier Immigration Appellate Authority with a single tier appellate system,[19] which will also serve to further reduce the legal aid expenditure on asylum and immigration cases. However, the potential savings that would result from these proposals has not yet been quantified for us by either the Home Office or the DCA.

22. Many of the respondents to the consultation, and our witnesses,[20] have referred to the problem of poor quality decision-making by the Home Office in the first instance. In addition, there is widespread concern that the Home Office is often unrepresented at the appeal before an adjudicator.[21] As Nick Oakshott, from the Refugee Legal Centre, has said, this "can result in unnecessary appeals to the Immigration Appeal Tribunal".[22] He explained:

The Chairman of the Council on Tribunals, Lord Newton, told us that the rate of attendance by Home Office presenting officers has increased over the last three months to around 35%.[24] On behalf of the Refugee Legal Centre, Nick Oakeshott—like many other organisations—has suggested that "front-loading cases appropriately will save money".[25] These are issues to which we hope to return in our main inquiry.

23. In its memorandum of 24th October, the DCA has stated that it wants "to explore a system where further improvements in decision-making by the Home Office will allow a reduction in Legal Help. This involves re-thinking the levels of legal aid in the context of Home Office decision-making".[26] We certainly support any moves to improve the quality of initial decision-making, but from the evidence we have seen it appears that there is a long way to go before such improvements will allow a reduction in Legal Help.

Concerns about quality

24. In addition to the rising costs of legal aid, the Government is also concerned about "the quality of work undertaken by a significant minority of immigration suppliers". The consultation paper states that "regular audits and peer review by the Legal Services Commission have highlighted over-claiming and issues regarding the quality of the advice given". The Minister emphasised the need to obtain value for money in this area. He said that, in the context of rising expenditure, "we need to make sure that we have the mechanisms in place to ensure that that money is being spent properly and that, at the same time, we are guaranteeing quality".[27] It is on that basis that the Government has proposed to introduce a new accreditation scheme, which will apply to those providing advice on immigration and asylum matters through public funding.

25. A large majority of respondents to the consultation support in principle the proposal for a new accreditation scheme as a means of helping to ensure that suppliers provide an acceptable standard of service. During this inquiry, our witnesses were unanimous in their view that quality issues have to be addressed. Although some improvements have already been made, the standard of advice and representation provided by some suppliers remains poor.[28] Judith Farbey, from ILPA, told us:

Effect of capping on the appeal system as a whole

26. Witnesses expressed concern about the potential effect of the original proposals on the conduct of immigration and asylum appeals before the Immigration Appellate Authority (IAA). These concerns stem from the alleged inability of practitioners to offer a satisfactory service within the proposed time limits, which we discuss in further detail below. The Chairman of the Council on Tribunals, Lord Newton, told us that there was a balance to be struck. He favoured "the availability of the advice at the early stages to try to eliminate the risk of things going wrong and going wrong up the system".[30] He suggested that "if you cut corners at early stages or reduce the flow of advice at early stages [then], other things being equal, you may lead to much more expenditure later…[at] a more expensive part of the appeal process".[31] He added:

27. A similar point has been made by the Office of the Immigration Services Commissioner (OISC), whose job is to ensure that immigration advisers, who are otherwise unregulated, are fit and competent and act in the best interests of their clients. In response to the consultation, the OISC said:

28. In his submission to the Committee's main inquiry on asylum and immigration appeals, the Chief Adjudicator stated that:

29. The potential effect of the Government's original proposals was set out by the Law Society:

The Government's response

30. In oral evidence before us, the Minister was unable to put a figure on the benefits which would accrue from the proposals. Although he claimed that the proposals would result in very significant savings on the legal aid budget for asylum and immigration cases—provisionally estimated at around £30-£40 million[36]—he was unable to tell us how much of that saving would have been made anyway, as a result of the factors outlined above, were no action to be taken.

31. However, in a subsequent memorandum submitted on 23rd October, the Department told us that public spending on asylum and immigration work was not expected to fall beyond the current level as a result of those other factors—the "no change" option—over the next three years. This is said to be due to three factors. Firstly, "although asylum applications are decreasing, there remains a higher level of decisions both at the initial decision level, and at the appeal stages…as the backlog is reduced". Secondly, it has been "assumed that the average costs [will] continue to rise at the current rate of 12% per annum". Thirdly, "although asylum applications are decreasing, and are forecast to continue decreasing, immigration and nationality cases are forecast to increase".[37]

32. The Department acknowledge that as there are proportionately fewer immigration cases to asylum cases, the last factor is not expected to have a "significant impact".[38] In relation to the second factor, we would question the basis of the Department's assumption that average costs will continue to rise at 12% per annum given that, in its memorandum to the Committee, the Department goes on state that "it is difficult to predict with accuracy what would happen to average costs if it were to take no action".[39]

33. The Department has forecast that if no action were to be taken, the asylum and immigration legal aid budget would have risen, by the end of next year, from £174.2m in 2002-03[40] to £192m in 2005-06.[41] However, we question the robustness of these figures. The first (and principal) factor is a result of the continuing backlog, but the projected increase in expenditure to clear the backlog has since been overtaken by the Home Secretary's announcement of 24th October that he will grant permission to stay to up to 15,000 asylum applicants who made their applications before 2nd October 2000. As the DCA's memorandum makes no mention of the Home Secretary's announcement, we can only assume that it was not taken into account when these expenditure forecasts were made.

34. In its further memorandum, submitted on 24th October, the DCA and LSC stated that they remained "firmly convinced that there is waste in the legal aid system…and [that] continued action to improve controls is necessary" for the following reasons:

The memorandum refers to the use of "poor quality outdoor clerks" to represent applicants at interview and the fact that two interpreters are often present. It also refers to the reduction of legal aid expenditure for judicial review or statutory review proceedings following the removal of devolved powers to self-grant emergency certificates.

35. There appears to be a shift in the Department's position. Whereas the original proposals were justified in the consultation paper chiefly by reference to the steep rise in legal aid expenditure over the past three years, the revised proposals have been presented solely on the basis that there is a need to remove "waste" from the legal aid system. Broadly speaking, we accept that, in the words of the Minister, there is a "need to make sure that we have the mechanisms in place to ensure that [the] money is being spent properly and that, at the same time, we are guaranteeing quality". However, we do not consider that the Government's original proposals would have achieved this result. Such stringent constraints on time could only have impacted adversely on quality and might, in turn, have lead to greater cost and inefficiencies further up the appeals process.

36. We welcome the fact that the Department is now proposing an alternative approach, as set out in its memorandum of 24th October, although the precise impact of the new proposals remains unclear. We support the Government's continuing drive to improve the quality of work undertaken by suppliers in this field, which involves getting rid of the bad and encouraging the good.

37. We now go on to consider what changes need to be made to the proposals to ensure that they can be

implemented effectively.

Will the limits on time and disbursement costs allow a proper standard of work?

38. The overwhelming majority of those who responded to the consultation were of the view that the limits on time and disbursement costs were too low and would not allow an appropriate standard of service to be offered to clients in immigration work, but particularly in asylum cases. Typical comments offered by consultees on the proposals included:

"ILPA is opposed in principle to the idea of maximum time limits, but in any event believes that those proposed are absurdly and irrationally short" (Immigration Law Practitioners Association)

"if these proposals come through in their present form, [practitioners] will not be able to act within the standards, both ethical and professional, which are set down by the Law Society and indeed the Bar Council" (Judith Farbey, ILPA)[

(Office of the Immigration Service Commissioner)

Law Society

(Alison Stanley, Law Society)

Refugee Legal Centre

(The Medical Foundation)

(Immigration Advisory Service)