House of Commons - Committee on the Lord Chancellor's Department

Select Committee on Committee on the Lord Chancellor's Department Third Report

4 The early days

33. Circumstances leading up to vesting day on 1 April 2001 were inauspicious. Matters were made worse by the events which took place in the early months of CAFCASS's formal existence. As CAFCASS itself and those representing the organisation have been at pains to point out, creating a new organisation from some 117 previous employing authorities was always going to be a difficult task. CAFCASS told us that "the scale of the challenge was underestimated",[50] and in view of the comments we make in the previous section it is impossible to disagree with that conclusion. But those presented with the task of meeting that challenge did not make it any easier by the way they approached it.

34. In particular, the early days were characterized by confusion in the governance arrangements for the new Service. In its Report on CAFCASS's first few months, published in March 2002, MCSI reported:

Setting a culture and style for governance of any organisation is important. This process can be distorted if, through necessity or for other reasons, key people are temporarily acting out of role and there is, in consequence, a lack of clarity about respective responsibilities. There was evidence of some confusion around the respective functions of key organisational elements, including:

— the Board, its Chairman and its Sub-Committees or Working Groups

— the Chief Executive and the Senior Management Team

— the interfaces between CAFCASS as a Non Departmental Public Body and its sponsoring organisation, the LCD.[51]

That confusion manifested itself in a number of different ways, and made a major contribution to some of CAFCASS's early difficulties.

Dispute with self-employed guardians

35. Almost immediately after its establishment CAFCASS became embroiled in a dispute with its self-employed guardians about the nature of the contracts they would be offered in the new service.

36. The history is as follows. Before CAFCASS's formal establishment, the inherited arrangements had been challenged by the Inland Revenue on the grounds that the existing contracts did not represent self-employment. Guardians had been offered, as an alternative to employment within the organisation, a self-employed contract based on a fixed fee scheme according to the length of time which a case was likely to take. This had, however, been rejected by NAGALRO, the organisation representing self-employed guardians, on a number of grounds. Guardians' particular concern was that the predetermination of the amount of time allowed to work on a case would threaten their professional independence as officers of the Court.

37. Following the formal establishment of CAFCASS on 1 April 2001, and further negotiations aimed at producing a contract acceptable to self-employed guardians having failed, NAGALRO applied for judicial review of the decision to offer fixed-fee contracts. In response, CAFCASS took a decision at the end of June 2001 not to offer any self-employed contracts at all, and instead to operate a fully employed service. NAGALRO responded in turn by applying for judicial review of this decision. The judicial review was heard in September 2001. The decision to operate a fully managed service was quashed on the basis that it represented "a complete volte-face" on the part of CAFCASS, which had previously indicated that it would continue to offer self-employment and had offered no opportunity for those affected to make representations about why it should not now do so.[52]

38. Behind the history lies an unfortunate tale of conflict between self-employed guardians and CAFCASS senior management, the legacy of which is continuing to affect the Service today. Self-employed guardians have felt from the beginning that they were undervalued, and that their role was misunderstood by those planning the new service. Typical comments from the evidence we received included:

The Guardians were harshly treated, and had to resort to judicial review to secure a barely equitable settlement…[53]

It is now self-evident that trust has broken down between Guardians and CAFCASS. Whereas most Guardians had a strong investment in the reputation of their old panels, CAFCASS is now perceived as the enemy of a quality service to children…[54]

I have watched with dismay the steady erosion of the role of Children's Guardian as welfare advocate for some of the most vulnerable children in our society…[55]

Experienced practitioners do not feel that their skills are valued by the new organisation and this is especially true of self employed practitioners…[56]

The long running dispute with self-employed guardians has discouraged and alienated experienced professionals in this field…[57]

39. For those self-employed guardians, the decision to offer a fixed-fee contract crystallised all their feelings about the Service and the way it was treating them. The fixed-fee contract appeared to guardians to betray a severe lack of understanding of the work they actually did. Historically, guardians had worked for an hourly rate, with a significant level of autonomy over the way they worked on a case. The change to a fixed-fee basis would, they argued, constrain to an unacceptable degree the way they were able to work on a case, and threaten their professional independence. The change did not take account of the impossibility of ascertaining, on allocation at the very beginning of a case, how complex the issues involved were likely to be, how long it would take, and ultimately how much work was likely to have to be done. The primary intention behind the original contract, in the view of the guardians, was to control costs.

40. The subsequent decision not to offer self-employed contracts at all was, if anything, even worse. This decision seemed to indicate that, if CAFCASS could not control self-employed guardians' work, and thus costs, through fixed-fee contracts, it simply did not want self-employed guardians at all. The overall impression guardians were left with was that they were not valued; if CAFCASS could not have them on its own terms, it did not want them at all.

41. Meanwhile, the necessity of dealing with the dispute with the self-employed guardians led to the neglect of certain other key aspects of the Service. There was little or no development of the policies and procedures which, as a new organisation, CAFCASS lacked; important issues of harmonisation of terms and conditions of staff inherited from the large number of previous employers were not addressed;[58] and other fundamental issues such as training and professional development, research, and IT were neglected.[59]

Disruption in the senior management team

42. We have already discussed the failure to establish the Board and senior management team in good time for the establishment of CAFCASS. It was in these early days after CAFCASS's formal establishment that the effects of that failure first began to be felt.

43. By the time of MCSI's first visit to CAFCASS Headquarters, in June 2001, the Chief Executive and a senior management team (SMT) were in place, although some senior management postholders were not permanent appointments. MCSI reported that at that time "a sense of SMT leadership was emerging as key posts were filled with permanent staff", and "considerable strategic thinking had been accomplished around finance, IT, communication and other operational issues."[60]

44. Despite that early encouragement, however, the senior management team did not, ultimately, work effectively. Tension between certain members of the team culminated in the departure of the Director of Operations in August 2001.[61] Subsequently, dissatisfaction with the performance of the Chief Executive herself grew, and led in November 2001 to her suspension. By the time of MCSI's second visit, in December 2001,

inspectors were concerned that there was little common understanding of, or agreement about, the main planning processes whereby key policies were formulated and agreed within CAFCASS. Indeed, in some instances, there was fundamental disagreement as to whether certain policies had ever been discussed and agreed.[62]

45. The details of the departure of the Director of Operations are not known, since he was required to sign a confidentiality agreement on departure. The suspension of the Chief Executive was followed, in July 2002, by her dismissal after a disciplinary inquiry. Subsequently, she took CAFCASS to an employment tribunal, which during the course of our inquiry was settled before a hearing took place.

46. Meanwhile, the Board was not functioning effectively either. The Board of an NDPB should not get involved in the day-to-day running of the organisation. It should, however, be able to exercise effective oversight of the strategic direction of the organisation, identify areas where problems are occurring, and ensure that action is taken to put them right. The CAFCASS Board was unable to perform this key role.

47. There is plenty of evidence for the Board's ineffectiveness. We have already noted MCSI's concerns about the way the Board was functioning.[63] One Board member has reported directly to us how her concerns, and those of other Board members, were ignored, and how the Board was expected to act merely as a rubber stamp for the proposals of the Chief Executive.[64] The Board's standing orders require it to meet in public at least twice a year: so far it has failed to hold even one meeting in public.[65] Published minutes of Board meetings are sketchy and give very little indication of how matters are progressed.[66] Most obvious, however, is the deterioration in service over which the Board has presided. No effective overseeing organisation could have allowed such a serious breakdown in the performance of the key functions for which it is responsible.

Role of the Lord Chancellor's Department

48. We discuss concerns about the relationship between CAFCASS and the Lord Chancellor's Department more fully later in this Report.[67] Much of what we say there about the performance of the Board throughout CAFCASS's existence is relevant to the early days. The lack of focus caused by the failure of the Framework Document properly to reflect CAFCASS's raison d'être, for example, was an important contributory factor in these initial difficulties. Here, however, we concentrate on two points: inappropriate early intervention in CAFCASS's operations by LCD officials; and suspicions that LCD approached the creation of CAFCASS with a covert cost-cutting agenda.

Intervention by LCD officials

49. A certain degree of interest on the part of Ministers in the operation of the new service was to be expected. It is reasonable to expect Ministers to pay close attention to the performance of such a vital organisation, and to ensure that their officials do so on their behalf. However, the establishment of CAFCASS as an NDPB implied a "hands-off" approach which the Department appears not fully to have respected. One example of this came in the handling of the dispute with the self-employed guardians. NAGALRO reported to us that, when trying to negotiate with CAFCASS senior management, they often found that answers came back only after consultation with LCD officials.[68]

50. These interventions may have been due to a lack of confidence in the ability of the Board and senior management team to cope with the difficulties being experienced. In view of the comments above, that lack of confidence may well have been justified. Nevertheless it should not be forgotten that it was Ministers who were responsible for the appointment of the Board and the senior management team in the first place.

Suspicions of cost-cutting

51. More broadly, witnesses reported that the LCD's attitude to CAFCASS in those early days appeared to be driven not by a desire to achieve the best possible level of service for children and the courts, but by a desire to keep costs down.[69] This evidence suggested that the level of initial funding which CAFCASS received was due to an inability accurately to record the actual cost of the service and to a desire to keep costs to an absolute minimum. It also suggested that the dispute with the guardians was a part of that cost-cutting agenda. An article published in the New Law Journal at around the time of the dispute sums up this view:

The conspiratorial view would be that both CAFCASS and the Lord Chancellor's Department would be very happy to have the existing self-employed guardians leave the service. They provide a standard to which neither organisation aspires. They provide a focus for continuing to fight for that standard. Without them it will be easier to reduce the budget …[70]

The subsequent budget increases, rather than disproving the theory, only go to show how short-sighted this attitude was.

Tandem representation

52. Suspicions of a cost-cutting agenda on the part of the Department are reflected in the fears expressed by a number of witnesses about the future of the system of "tandem representation", whereby a child is represented in court by both a solicitor and a children's guardian. Witnesses have felt this system to be under threat, despite the fact that it is much envied in other jurisdictions.[71] All the evidence we have received points to the value of the system and the benefits it brings to vulnerable children. In recognition of those benefits, section 122 of the Adoption and Children Act 2002, when implemented, will for the first time set in primary legislation the power to provide for separate representation in appropriate cases in private law. There was considerable concern that CAFCASS's current difficulties might also delay the implementation of this section, which was very widely welcomed when it was introduced into the Adoption and Children Bill.[72] The Minister for Children and the CAFCASS Board should make a definitive statement about their commitment to maintaining a system of tandem representation. These provisions are consistent with Article 12 of the United Nations Convention on the Rights of the Child.[73]

Work of the Project Team

53. We record above the work which was done by working groups and the Project Team in preparation for the establishment of CAFCASS. As the Department's memorandum implies, whilst it may have been envisaged that this work would be taken forward by CAFCASS once established, the written evidence we received suggested that that CAFCASS had in fact failed to make use of the very considerable work done by those groups.[74]

54. Many rumours surrounded the fate of the work that was done, ranging from its deliberate non-use by the senior management team to allegations that Departmental officials had "locked it in a cupboard" and denied the senior management team access to it.[75] We questioned a number of witnesses on the reasons for the failure to make use of this work, without receiving any very satisfactory answers.[76] Perhaps the closest we got to the true explanation of what had happened was the suggestion by the LCD Head of Family Policy Division that the work was "not lost, but lost sight of."[77] The CAFCASS Chairman claimed that in fact the work of the Project Teams had been built on and used, and professed himself "quite distressed" that our witnesses had suggested otherwise.[78] However, the Chief Executive's view, that "the momentum of some of this work was lost", appears to us to be closer to an acknowledgement of what really happened.[79] It seems incontrovertible that the work which was done was not properly used in those early days. For an organisation already struggling with the difficulties of an unreasonably truncated time for establishment, to fail even to use the work which was able to be done in the limited time available represents serious mismanagement.

55. The effect of the failure to use that work was not just a practical one in the sense that difficulties which could have been avoided were not avoided and progress which could have been made was not made. It is impossible to tell whether the suggestion made by one of our witnesses—that "there was a cut off point on 1 April 2001 when CAFCASS senior management said 'Right, nothing that has happened before 1 April matters. We can start again'"[80]—is correct or not. There is no doubt, however, that the failure to build on the work done by so many different organisations and experienced practitioners created an impression that the views of stakeholders were not valued, and that at a time when the Service was in need of all the help it could get.[81]

56. The Project Team cost a considerable amount of money—some £9 million, we were told.[82] The failure to use the work which was done was thus not only a waste of many people's time and effort, but a serious waste of money.

Review by the National Audit Office

57. We have examined events surrounding the establishment and early days of CAFCASS in order to understand the context within which CAFCASS is now working. We have not explored all the details of the problems which were experienced at this time. Nevertheless, our inquiry has produced evidence of the serious mismanagement of the establishment of CAFCASS both before and after vesting day. Considerable amounts of public money were involved and those responsible should be held to account. We recommend that the National Audit Office review these events, including: use of the work of the Project Team;[83] development of IT systems in CAFCASS[84]; management of senior staff and use of consultants in the early months of CAFCASS; and events surrounding the departures of the Chief Executive and Director of Operations.

50 Ev 106 para 4.3 Back

51 Setting Up, para 2.4, page 29 Back

52 R (NALGALRO) v CAFCASS [2001] EWHC Admin 693; [2002] 1 FLR 255 Back

53 Ev 103 Back

54 Ev 117 Back

55 Ev 128 Back

56 Ev 135 Back

57 Ev 151 Back

58 Ev 215 Back

59 Ev 215-216 Back

60 Setting Up, para 2.5 Back

61 Ev 215 Back