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Lord Carter proposes that the criminal legal aid market should be restructured and suggests a timetable. April 2007 should see the introduction of a new fixed fee scheme in police stations. It should also see changes to standard fees for magistrates court cases, changes to the advocates’ graduated fee scheme in the Crown
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court and an extension of the graduated-fee scheme to litigators in the Crown court. For very high-cost cases, the Legal Services Commission should introduce an enhanced quality threshold and use a higher level of in-house expertise and closer management to secure greater control over the individual case contracting regime. Lord Carter proposes that that be achieved by the end of the financial year 2007-08 through the LSC contracting solely with a panel of suppliers. Panel membership would be determined through demonstration of an appropriate enhanced level of quality, as well as through competition. Price competition should be introduced in 2009, with quality assured suppliers bidding for multiple units of cases in police stations which they would usually take to the magistrates courts and/or Crown courts.

The transition to a more market-based approach comes alongside changes to the regulation of legal services, as outlined in the draft Legal Services Bill. Taken together, those developments will mean change for the profession—a degree of restructuring for solicitors and barristers alike. The changes must be managed in a way that ensures continuing quality and choice for the public, while giving the professions time and, if necessary, support to adjust to the new model.

Lord Carter recognises the need to ensure that providers of legal services continue to serve black and minority ethnic communities and those in less densely populated and rural areas. He strongly acknowledges that one size does not fit all, and makes detailed proposals to ensure the continued improved provision of high quality legal services for all those communities. His report contains detailed recommendations that will help us to devise the criminal justice system that the public expect: one that is simple and speedy, and makes the best use of summary justice.

For civil and family legal aid, the report provides for a more efficient, client-focused service, concentrating on meeting different local needs. Lord Carter suggests that that will be achieved through the establishment of community legal advice centres and community legal advice networks, which is in line with the Legal Services Commission’s strategy for community legal services. Best value tendering for the new centres and participation in the networks should begin in 2009.

New forms of contracting are expected to promote greater links between civil suppliers and, where possible, greater links with family law suppliers, so that clusters of problems can be dealt with earlier and more effectively to avoid the risk that they multiply and lead to people falling into the social exclusion trap.

The Legal Services Commission also proposes to move to fixed and graduated fees from April 2007 for a wide variety of civil and family work, and also for most immigration work. That will promote and reward the most effective working by suppliers. The consultation document published alongside Lord Carter’s report contains full details.

Lord Carter estimates that if the reforms had been fully in place in 2005-06, criminal legal aid spending would have been £100 million lower, and that does not take account of the potential further savings from best value tendering. In addition, there would have been a greater proportion of legal aid spent on civil and family matters. By the end of the implementation period, because the reforms will also control unit costs far
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better than many elements of the current scheme, spending will be lower than it would be without the changes proposed. I also welcome and accept Lord Carter’s recommendation for better management and control of spending, including through greater transparency and shared problem-solving between the DCA, the LSC, other Departments and the professions.

In conclusion, the Government strongly welcome Lord Carter’s findings and we have today issued a consultation paper to which I encourage everyone to respond. I look forward to the challenges that are ahead and working with all stakeholders and the Legal Services Commission, the dedication and commitment of whose commissioners and staff will be critical to success. I am immensely grateful to Lord Carter for the work that he has done.

Mr. Oliver Heald (North-East Hertfordshire) (Con): I am grateful to the Under-Secretary for her courtesy in giving the Opposition early sight of her statement today, and I thank Lord Carter for his meeting with me. We welcome the publication of the report and will study the proposals in detail. We hope that it will spark a debate that can provide the basis for a consensus on reform of the legal aid system that is built to last.

Legal aid remains the cornerstone of our criminal justice system, providing access to justice for millions of people, but today it is in crisis. In 1997, the Government promised to reform legal aid in order to

Instead, we have seen a 35 per cent rise in the overall legal aid budget, while at the same time spending on civil legal aid, excluding asylum, is down by a quarter. That in turn is damaging access to justice for many of the most vulnerable people in society. So we all agree that reform is necessary.

We endorse Lord Carter’s emphasis on the need to tackle very high cost cases, which account for around half of current criminal legal aid budget. In that context will the Under-Secretary tell us what steps the Crown Prosecution Service, the Serious Fraud Office, Her Majesty’s Revenue and Customs and the British Transport police intend to take in order to respond to the challenge of managing the prosecution of cases more efficiently and effectively? Does she agree that in addition to the measures proposed by Lord Carter, more effective case management by courts is essential if costs are to be kept down?

Much is made of the fees earned by barristers at the top end of the scale in very high cost cases, but the Under-Secretary will be aware of the concerns among barristers and solicitors about many more in the profession who rely on legal aid work, yet who barely earn enough to get by. Does she accept that that has already resulted in fewer lawyers choosing publicly funded legal aid work as a career, which in turn is placing huge strains on the civil legal aid system? The Under-Secretary will know that the Bar Council is concerned by the further delays before help is provided for those doing those shorter cases. The London Criminal Courts Solicitors’ Association has said today that Lord Carter’s proposals:

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How does the Under-Secretary respond to such concerns?

There are other parts of the statement, and Lord Carter’s report, that give rise to concerns—in particular, the likely impact on the network of high street solicitors and law centres, such as the one that I visited in Tower Hamlets recently. In particular, will the Under-Secretary respond to the fears expressed by many that Lord Carter’s proposals on procurement sound the death knell for small high street solicitors undertaking legal aid work? This morning, the vice-president of the London Criminal Courts Solicitors’ Association said that the proposals were:

What steps do the Government intend to take to deal with those concerns and to allay fears that advice deserts will emerge?

Page 52 of Lord Carter’s report refers to the needs of vulnerable black and ethnic minority clients. She will be aware that many small high street solicitors tailor their services to the needs of black and ethnic minority clients. However, under Lord Carter’s plans, those are precisely the types of firm that risk being squeezed out of the system and, in the process, significant role models of success in the legal world for minorities will be lost. Does she agree with the Criminal Law Solicitors’ Association, which has said that such firms will be “disproportionately disadvantaged” by Lord Carter’s plans?

Finally, the Minister referred to the publication of a consultation paper on Lord Carter’s report. Will the Under-Secretary confirm, therefore, that valuable as his report is, it does not represent the final word, that there is some scope to refine his plans and that the Government will address the genuine concerns of many in the legal profession who want a system that combines both value for money and proper access to justice?

Vera Baird: I thank the hon. Gentleman for his welcome for the report and his hope, which I share, that it will spark a debate on those important issues. I agree wholly that we need to build a system that will last. The increase in legal aid expenditure since 1997, to which he alluded, is not an isolated example. This morning, I looked at the tables in the fundamental legal aid review document, which show that spending also went up exponentially between 1991 and 1996, so it is clear that successive Governments have not managed to control that elusive budget.

The hon. Gentleman raises the issue of very high cost cases, and I urge him to read with care—I accept entirely that he has not had the slightest opportunity to do so—what Lord Carter proposes for closer management of such cases, with a higher level of expertise in the LSC to ensure that they are controlled as well as they can be. I accept entirely the hon. Gentleman’s point that all that cannot be done through legal aid alone: there is a serious need for the CPS and the other public agencies he mentioned to consider case management. The Carter review contains a quotation from Sir Igor Judge, which gives the judicial attitude to the urgent need for powerful case management. The judiciary are anxious that judges should be free to do
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that, and of course we entirely encourage it. We are seeking, with the consultation document that will build on Lord Carter’s report, to use the new fixed fee regime that he proposes to try to enhance the ability of the judiciary to manage cases properly.

The hon. Gentleman also referred to the frequently expressed criticism of fat cat barristers who earn enormous amounts of money. I have never been fat myself —[ Interruption. ] Neither metaphorically, nor physically, but I am not sure that the House is interested in that. There is some interesting information about lower level members of the Bar in Lord Carter’s review. He found that 5 per cent. of those with between one and five years’ experience at the Bar were earning £90,000 a year. That seems to be a fine starting salary, although many others do not earn that much. However, that is an issue for those who structure the Bar, and not one that legal aid can tackle directly.

I accept that the Bar Council would prefer not to delay the catch-up that it thinks should follow from the fact that graduated fee schemes for one to 10-day cases were fixed in 1997. However, a letter from the council this morning states that, as a result of its negotiations with Lord Carter, it acknowledges that process should occur from 2007.

I do not agree with the hon. Member for North-East Hertfordshire (Mr. Heald) that the London Criminal Court Solicitors’ Association is right to suggest that the proposals will end recruitment to the public sector. Not a bit of it: he was present at the recent Legal Aid Practitioners Group awards for legal aid lawyer of the year and, like me, can only have been impressed by the calibre of the many excellent young practitioners there. They are fighters, every one of them—much of the time they are fighting us!—and they are coming into the public sector, so I do not think that what the hon. Gentleman said is right.

I do not agree either that we are about to hear the death knell of high street solicitors. Much concern was aroused by the interim report, which did us all a huge favour by making us refine our thinking. The process of implementation will need a great deal of consultation and care. It is proposed that I should spend a sizeable part of my summer going around providing exactly that, although of course people will also be able to correspond about other matters.

I heard Greg Powell say on the radio this morning that he thought that the proposals would involve a huge amount of bureaucracy, but the LSC is looking to make savings in that regard worth tens of millions of pounds. It is anxious to have a lighter touch, and of course practitioners want to escape from bureaucracy. The whole point of having fixed fees at the front end of cases across the board is so that there will be no thorny questions about whether a particular mention, application in court or piece of travel and waiting was justified. It seems to me that the fixed fee will mean less bureaucracy.

The hon. Gentleman talked about black and minority ethnic practitioners and communities. The LSC can and must use its procurement power to ensure that those communities continue to be served fully and properly by appropriate practitioners. I do not accept that practitioners from the black and ethnic minorities
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will be squeezed out. Lord Carter received legal advice suggesting that no inappropriately heavy burden would fall on them, but I know that serious concerns have been expressed about that.

I had the pleasure of speaking to the annual conference of the Black Solicitors Network, and I took the opportunity to talk to a number of its members. The network represents a very important and dynamic sector of young black entrepreneurs, and we must take good care of them. I assure the House that we are very much apprised of the need to ensure that they have appropriate career opportunities.

I can confirm that the report is not the last word on the matter. Lord Carter undertook a very good consultation process that involved all the relevant stakeholders. I know that he spoke to the hon. Member for North-East Hertfordshire, and I believe that he spoke to the Liberal Democrats as well. The confidence that the process has given us means that we are able to take on Lord Carter’s direction of travel, as it were, but with a clear awareness that there is still a good deal of scope for policy development during the consultation that is to follow.

Fiona Mactaggart (Slough) (Lab): I thank my hon. and learned Friend for her statement and welcome her to her post. I am concerned about accountability in how neighbourhoods provide advice and representation, on legal matters and on issues that at least at first may not involve the law. In my constituency, partly as a result of the behaviour of the local authority, there is a real shortage of competent advice on debt, immigration and other matters. I have not read the report, but will she clarify what accountability mechanism will be put in place to make sure that advice is provided in a neighbourhood? Does it all come down to the LSC, or is there some way for us to ensure that the local authority or some other body can take responsibility for providing advice in a particular community?

Vera Baird: I thank my hon. Friend for that question. Neighbourhood accountability may go beyond Lord Carter’s remit, but she is right to say that there is a need for an audit process to establish what advice is available for people. I attend the Cabinet Office Committee on social exclusion established by my right hon. Friend the Minister for Social Exclusion. My input is based on the belief that there is a need for advice to be included in the social exclusion agenda. That goes beyond legal advice, but the LSC is in a good position to ascertain what advice is available and to co-ordinate it more efficiently than has been the case in the past.

Therefore, I can assure my hon. Friend that the matters that she raises are very much in my mind. They are being considered by the Committee to which I referred, and by the LSC.

Mr. David Heath (Somerton and Frome) (LD): I thank the hon. and learned Lady for her statement and Lord Carter for his work on the review. I also commend the process so far, which has involved an extremely good level of consultation. I am heartened by the Minister’s earlier confirmation that the further consultation process will be genuine, and that comments will be welcomed and taken on board.

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The importance of legal aid is worth underlining yet again. It is a key part of the welfare state, although we probably talk about it less than any other. The squeeze on legal aid budgets over recent years is not the result of inefficiencies in the system—it is largely due to the increase in business caused by the wide panoply of new offences and the increased number of prosecutions taking place. That is what is driving the increase in criminal aid, which in turn has squeezed the availability for legal aid in the civil and family courts.

The squeeze on legal aid is causing great concern, as access to legal aid is an essential part of a fair and free society. I hope that all hon. Members will agree with that, and that the report’s proposals will increase access to legal aid.

The Minister said that she felt there would be no deterioration in the position of high street practitioners. I hope that she is right, but legal aid in the more rural areas—and in some cities too—is in a parlous state, with those practitioners who offer criminal legal aid, for instance, being very few and far between. For instance, it is common for there to be only one criminal solicitor available to deal with a particular magistrates court. We therefore have to do something to encourage more practices to release practitioners to do criminal legal aid and to undertake work in the family courts.

I have a few quick questions for the Minister. First, she was right to emphasise the need for better organisation in our courts, and one factor in that is the court’s proximity to the people attending it. Travel to court is a key part of the costs incurred by practitioners, defendants, witnesses and victims. Centralising court facilities leads to an apparent cost saving, but there is a real cost to the people seeking justice. The two need to be in balance, as justice is being taken away from people in many rural communities because courts are being closed down.

Will the Minister ensure that the financial incentives to finish cases quickly do not prejudice the standard of justice in courts? That is an obvious point but it is terribly important, so it is necessary to make it.

Will the Government guarantee that defendants can be represented by the same good local lawyer from the beginning to the end of proceedings? That may or may not be implicit in the arrangements as they develop.

Can we make sure that lawyers undertaking publicly funded work have sufficient recompense to attract them to such posts rather than going into private practice? The hon. and learned Lady may have partly answered that question already.

Lastly, to pick up the point made by the hon. Member for Slough (Fiona Mactaggart), a process of audit of advice and legal services is needed and Members of Parliament have a critical part to play in it. Often, advice deserts are not in the most deprived communities. The worst thing of all is to be a poor person in a rich community, who does not have access to transport and to high-cost support and will be very much excluded if we are not careful. The hon. and learned Lady’s Department needs to work closely with the Minister for Social Exclusion to ensure that a proper audit system is in place. MPs could play a useful part in that process, so will she consider that?

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