Department for Constitutional Affairs - Health Committee Contents


Examination of Witnesses (Questions 80-98)

ALEX ALLAN, ROD CLARK AND BARBARA MOORHOUSE

17 OCTOBER 2006

  Q80  Mrs James: That would be excellent. Again, just following on reviews and performance, et cetera, your Department undertook one of the new Capability Reviews earlier in the year. What were the main messages arising from that review and did anything surprise you?

  Alex Allan: I think the message that came out of our Capability Review, and indeed from talking to other departments who have been through the process came out of their reviews was there was not anything that was completely out of the blue, and indeed it would be slightly odd if there were. What it was was quite a lot of things which all departments, including us, knew we needed to do more of, but had not quite got around to doing it with enough energy as we perhaps should have done, and it highlighted those. I think that is a fairly common theme. For us, as I think I said earlier, it was encouraging that it was actually quite complimentary about our overall strategy, but it identified a number of areas, for example, where we had a rather fragmented change management programme. We were going through lots of change but we had change management in a number of different bits of the Department and we needed to pull together a single change management programme, which we have done. It highlighted, again a point I made earlier, that we have got some quite big delivery challenges and if we are going to achieve what we want to do, that is a big challenge. We have set up more performance management and a whole lot more work to do that. Then it also highlighted areas over what I think they called our business model, which was basically how we worked together corporately to bring together the different bodies which make up the Department—the Courts Service, the Tribunals Service, the Legal Services Commission, the centre, how we operate with shared services.

  Q81  Mrs James: They actually said that that was an urgent development area.

  Alex Allan: Indeed. We have done quite a lot of work following that. I think we sent you a copy of our action plan.

  Chairman: I think we would like to be kept up-to-date on the progress that you make. You mentioned Carter and I think Dr Whitehead had a comment about that.

  Q82  Dr Whitehead: You have mentioned already that Lord Carter's review will result potentially in substantial savings, the suggestion was £100 million savings annually. Obviously we are conducting an inquiry generally into the Carter review, but in terms of the Department's budgeting and financing, what would be the consequences for the departmental budget if, for example, Lord Carter's recommendations were not implemented in full? Has the Department already banked, as it were, those savings in terms of its future budget?

  Alex Allan: I am sure that, as we move forward to draw up a plan with the Treasury, the Treasury will want to hold us to implementing the Carter review proposals. More generally on legal aid, I think we may face problems over legal aid, either from not implementing all the Carter proposals (although we are very determined to do that) or from other fluctuations, and I think we are putting a lot of work into getting a much better focus on legal aid spending, exactly what drives it, and the sorts of pressures that it comes under. As you were, I think, implying, if we face an overspend on legal aid we have to find savings elsewhere and that is something that we will have to do. We believe that the Carter proposals actually work together with the rest of what we are doing and they produce a much long-term system of procurement of legal services through a table of fixed fees and so on that will actually help us to achieve some of our other objectives on speeding up the justice system. So it is a critical part of the work to make sure that this does get done. At all sorts of levels we work very closely with the Legal Services Commission, and the Parliamentary Secretary Vera Baird is taking a very strong interest and, as I think you may know, she spent a lot of August touring the country talking to solicitors to try to get their—

  Q83  Dr Whitehead: That is rather a kind way of expressing it!

  Alex Allan: Clearly there are, as I think was made clear at Questions today, some areas on the family side where we are going to have to reconsider exactly how it is implemented but it is very, very important that we implement the thrust of the Carter reforms successfully.

  Q84  Dr Whitehead: Do you not think that the Department is in perhaps something of a position of a hostage in as much as you the Department are, in a sense, relying on the fact that the Carter report figures are accurate and the savings are achievable and, secondly, you are going to Treasury with already published figures, as it were, for would-be savings from a review which was not a review by the Department, and will the Treasury therefore not say, "Well, that is a done deal; we will have those at the beginning of the discussion," and you will then be liable, as it were, for those savings when someone else has come up with them and not you?

  Alex Allan: Well, we did work very closely with Lord Carter to try and provide a lot of support to his team, including paying consultants Frontier Economics to work with his team to make sure that the numbers were right. So we feel that these are numbers that are deliverable. The Legal Services Commission, the actual commission, the independently constituted body looked at the numbers and it believes that it will deliver the changes. They go with the grain of what the Legal Services Commission was doing in terms of trying to set up systems of preferred suppliers. So I do not think it is quite Lord Carter independently said this and then we are complete hostages. We did work closely with him. He did a lot of work with the Law Society and with the Bar Council on the precise schemes, particularly on the criminal side although, as I mentioned earlier, we do accept that some more work is needed on the family side. So I think that it does not feel like something that we have farmed off to an independent reviewer and then simply sat back and took what was coming to us.

  Q85  Mr Khabra: I am going to ask you a question about your relationship with the Home Office. The Department shares responsibility with the Home Office and the Office of the Attorney General via the Office for Criminal Justice Reform. The Treasury's Financial Management Review in 2005 found that you were not sufficiently included in all consultations. Have you now increased your involvement? Would you say that you are a full partner with the other responsible departments?

  Alex Allan: I would say yes we have improved our consultations and we do feel that we are full partners in the criminal justice system with the National Criminal Justice Board, the Office for Criminal Justice Reform, and the local criminal justice boards. Clearly, as I indicated earlier, it is very important that we do work closely with the Home Office on all these issues and we have got links in at lots of different levels. Picking up, sir, one of the points for example on legal aid, we do now have very clear arrangements in place that if another department makes a change that imposes unexpected costs on us, then there will be a public expenditure transfer to enable us to meet those costs, and our accounts show examples in money transferred from the Home Office for downstream costs associated with the 2003 Criminal Justice Act and also money transferred from the Department for Education and Skills for money associated with the Adoption and Children Act. So inevitably the Home Office is larger in scale in terms of its overall budget than us, but I think the Home Office recognises that there is a shared interest in trying to make sure that the whole system works well. To take an example, the Home Office at the moment has obvious pressures on prison places, and one of the areas is remand places, and so for them if they see that there are delays in the crown courts so that prisoners may be held on remand for longer then that clearly has very big impacts on them, so I think that there is increasing recognition that we are all in business with a common endeavour.

  Q86  Mr Khabra: Has there ever been an occasion where there has been a conflict of interest or a conflict of responsibility?

  Alex Allan: Inevitably at times there will be differences of political view about what is the best way forward, but I think the system is now robust enough that that can be resolved and, as I say, our working relationships are very good at all levels right from the top to the bottom.

  Q87  Mr Khabra: The Home Office has already received its settlement from the Comprehensive Spending Review. What impact does this have on the scope for joint planning between the two departments?

  Alex Allan: I accept that at one level it seems slightly odd that one part of the system has settled. We are still doing a lot of joint work, as Barbara Moorhouse said, and I will ask her to speak on this in a moment, and of course the Crown Prosecution Service has not yet made a settlement. I think we are conscious that although, as Barbara indicated, the Home Office settlement is at the upper end of the range, given the pressures, for example on the police forces, the pressures from the counter-terrorism strategy, the needs in the Prison Service it is actually a pretty tight settlement. I guess it would be a worry for us if they had an enormously generous settlement and lots and lots of defendants were heading our way and we got a very miserly settlement and we could not cope. It does not feel like that and, as I say, there is a lot more work going on to try and join it up, but Barbara may be able to expand a bit more.

  Barbara Moorhouse: Yes, the Home Office did receive what at the time was seen to a relatively generous settlement but I think since then there have been a number of changes in expectations around the Home Office, and therefore what might have seemed like a generous settlement at that stage probably looks a great deal tighter if you are sitting in the Home Office today. I think the key issue going forward is that once we have agreed our settlement, whenever that may be, there are two ways that it can go in terms of talking about financial management. I think there is a strong pressure for all of the three agencies or departments to see those areas where by working together they can manage money better. We have had a number of examples where all three parties have recognised the value of working together on certain key projects. I think there are a number of good examples of that. However, I think there are also some challenges and as all three departments are likely to receive settlements less than they would have liked, obviously there is going to be a lot of challenge around us all being careful about how we manage money. The good side of that is that I think all three departments are now much, much sharper, I suppose, at focusing in on when new initiatives are going to cause them considerable cost and making sure that that thinking is built into the trilateral work before any particular policy or operational decision is made. That is extremely healthy and I think that will help to improve the overall quality of financial management across all three departments. However, it will also mean that there may be some short-term tensions around how some of those policy decisions pan out given that they impose different costs on one department where the investment might be made in another party. There will be some benefits of trilateral working in a tighter financial climate; there may also be some negatives. Overall, there is no doubt that effectively value for money across the criminal justice system really does need the three agents in these departments to work together.

  Q88  Mr Khabra: Did you have consultation with the Home Office prior to the Comprehensive Spending Review with regard to your priorities?

  Barbara Moorhouse: No, we have been in discussion with the Home Office and there have been some issues at policy and strategy level, but I do not think it would be true to say there was a full-scale discussion of our Comprehensive Spending Review or indeed theirs before they settled, but a number of the aspects of that are covered in various pieces of bilateral and trilateral work at official level.

  Q89  Mr Khabra: On the question of your Department's estate management abilities, in the past there have been weaknesses. What improvements have you made and can you give some examples of the improvements?

  Alex Allan: This is certainly an area we are focusing a lot on not just because of the financial pressures but also because we now have a very much bigger estate with the bringing of the magistrates' courts into Her Majesty's Courts Service, we now have responsibility for all the estate and that is something which we are looking at across the whole estate. Maybe there are areas where we have a county court, a magistrates' court and a crown court in very close proximity and we need to look at that. We have put a lot of effort into improving our general capability to do the planning and management of the estate's function. We have set up a capital investment board that Barbara chairs which I think is moving towards getting a very much clearer picture of not just the estates but looking at IT investment as well.

  Q90  Mr Khabra: What mechanism is used to manage such a huge estate like the one you are responsible for?

  Barbara Moorhouse: I think the main work that has been done since the Courts Service came together has been basically to establish the facts of what we own and the condition which it is in to get a thorough understanding of the asset base we have to manage. The tribunals have now got to go through that same process although their portfolio is much smaller and a lot of it is rented rather than being owned, so they have to go through a parallel process. It is also true to say that a lot of our thinking around estates has been very much governed by the level of capital investment or capital expenditure that we think we will be allowed in the Comprehensive Spending Review. It is true to say that when the courts produced their initial thinking about the amount of investment that they needed in the courts buildings, it included some very attractive and ambitious plans about rationalising buildings and, indeed, building new buildings which were, perhaps, geographically better for the current use of court business. It has become very clear as we have gone through the Comprehensive Spending Review that we were unlikely to receive that level of funding as we had originally hoped. Therefore, at the current time, we are going back now to revisit that initial thinking and to make sure we are prioritising the likely level of capital investment which we will have in the light of all of the work that we are doing around the use of courts and the change programme in HMCS so we are making best use of our existing estate, making disposals wherever we can so we have the opportunity to re-invest, and not being so reliant on the Treasury to produce significant extra funding in order for us to improve our estate. That is where our current thinking rests and we will be progressing that through the rest of the Comprehensive Spending Review discussions with the Treasury.

  Q91  Mr Khabra: Could you tell us if you receive any income from the estates?

  Barbara Moorhouse: I am sure there are bits and pieces of little rentals that we receive here and there.

  Alex Allan: There are some innovative court managers who rent out their courts on Saturdays for weddings and things like this.

  Rod Clark: Or do television shows and things like that.

  Barbara Moorhouse: It certainly is small, we know that.

  Q92  Chairman: The Committee has in the past taken an interest in the fact that you have a considerable historic state of listed buildings, some of which—it is argued by a lot of people—you ought to be using and sustaining and not simply pulling the rug from underneath them where they can be successfully used. I hope that is still forming part of your strategy.

  Alex Allan: Indeed. Although it caused some controversy, if you take the case of Middlesex Guildhall, which will be converted into the new Supreme Court, we believe that the plans that were developed by Fielden, Mawson and Fosters really do justice to what is a historic building and take out quite a lot of the additions that have been made over the years to make it suitable as a crown court and take it into a much more open environment in a way that is sympathetic to its historic use. Of course, as you say, we have a number of historic buildings on the court estate. There will be some where we simply do not believe they should continue to form part of our estate. As you know, we sold Bow Street Magistrates Court together with the Metropolitan Police who sold the police station next door that had been closed for some time simply because there was no part of our estate planning to indicate that was a sensible asset to hold on to and so we are doing developments at Marylebone Road and Horseferry Road to absorb that capacity. There will be some buildings which we will dispose of; there will be some buildings that we will cherish.

  Q93  Chairman: You have inherited some PFI contracts also. Are you going to manage these successfully and do you envisage more PFI contracts for future court projects?

  Barbara Moorhouse: In short, we have nine PFI contracts and the costs of those are built into the base planning for the process. We do not envisage at this current time being able to use PFI as a procurement route in the future. I think it would be fair to say that a lot of PFI thinking was driven by the particular accounting rules that prevailed at one stage. Now that those no longer prevail, I think it is unlikely that we will use a new PFI procurement route.

  Q94  Chairman: A couple of quick questions on a couple of other points. Why is it you have overshot on recovering court cost fees, 104%? Committees, in the past, have had anxieties that access to justice is in any case potentially limited and denied by full cost recovery.

  Alex Allan: I do not believe in aggregate we have overshot.

  Rod Clark: Not looking at civil and family together.

  Alex Allan: Certainly, we do monitor the level of fees very carefully. As you say, we do have a target for full cost recovery, excluding the fees that are omitted, for example if somebody falls below income tests. It is full cost recovery allowing for that, so we do not try.

  Q95  Chairman: You do not charge other users?

  Alex Allan: We do not charge other users to cross-subsidise people who are exempt from fees, no.

  Q96  Chairman: In your annual report, you do remind us that you are "conducting research into the experience of different electoral systems in the UK in line with the Government's manifesto commitment". When is this research likely to see the light of day?

  Alex Allan: I think I would be rash to promise exactly when. There is indeed, as the report says, work going on within the Department. It is something which I am sure the Lord Chancellor will want to consider, although he will need to consult his ministerial colleagues, and we will publish in line with the manifesto commitment as soon as we are able to.

  Q97  Chairman: Is it nearly finished and are ministers waiting to decide whether or not to publish it, or is there a lot more work that you have to do?

  Alex Allan: I think most of the underlying factual information has been done. Exactly how it is pulled together and presented and what conclusions are drawn is something that is still going on.

  Q98  Chairman: And you said it with a straight face! Thank you very much.

  Alex Allan: Thank you.





 
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