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13 Dec 2006 : Column 333WH—continued

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Joan Ruddock: I raised the issue of immigration because we are considering holistic local advice services, and it is an integral part of those services. If one part of a service were to be affected to its detriment, other parts of the service not touched by the proposal would also be affected.

Vera Baird: I do not think that that will happen. I am grateful to my hon. Friend the Member for Regent’s Park and Kensington, North for her acknowledgment to me, a person dedicated to the Government’s commitment to public funding. I shall be ready to discuss the immigration and mental health proposals when they are published, but I imagine that as we will have consulted with practitioners, the proposals will not be exceptionable.

Frankly, much of what has been said is a little bit out of date. Conversations about supply months ago and repeated references to the Carter review ignore the changes made by “Legal Aid Reform: The Way Ahead”. The document was very recently published, so it is not all that surprising. I have made it clear throughout the process that the fundamental aim of legal aid reform is to safeguard the work of our advice agencies, which do so much to assist the socially excluded. My hon. Friends and I agree on that.

Contrary to the claims of advice deserts that emerge from time to time, the community legal service helped record numbers of people last year—708,000, far more than in any year since the LSC’s creation. That help included record amounts of face-to-face assistance—a 13 per cent. increase from the previous year, with another increase expected this year—as well as the advent of Community Legal Service Direct, a telephone service whose take-up has increased by a staggering 73 per cent. in its second year. We are improving and increasing the advice given.

Rob Marris (Wolverhampton, South-West) (Lab): I am grateful to my hon. Friend the Minister for giving way. Legal aid is a pillar of the welfare state and an enduring legacy from the post-war Labour Government. I agree that the system needs overhauling and that we must be careful when we do so not to destabilise it. I suggest that the legal aid budget has enough money, but that too high a proportion of that budget still goes to a few very highly paid barristers, principally those doing serious criminal work. I urge her to rethink some of her plans and redistribute more money away from such barristers to front-line advice and assistance services and firms.

Sir Nicholas Winterton (in the Chair): Order. The Minister has very little time in which to reply to a full debate. I hope that there will be no further interventions.

Vera Baird: The aim is to move money across from high-cost cases, and that aim runs throughout the proposals, as I am sure my hon. Friend knows.

The move to fixed fees is an essential part of legal aid reform. As is pretty well known, I deliberately toured the country during the summer and held 25 meetings, 11 of them with the not-for-profit sector. I am grateful for that input, which has improved our schemes for
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social welfare law. It will be my watchword to continue consulting, but I must make it clear that the direction of travel is now set.

Both solicitors and not-for-profits do advice work across the range of social welfare law. Solicitors are already paid a fixed fee per case. Such fees are called TFFs, or tailored fixed fees, because they are based on the individual firm’s average claims in 2003-04 for each category of case. TFFs were a stepping stone to a single fixed-fee system—that is, one that pays the same fee to all firms for the same kind of work. Clearly, we cannot continue to pay different fixed fees to different suppliers for the same work.

Several hon. Members rose—

Vera Baird: I have a good deal to say. Not-for-profit advice agencies such as citizens advice bureaux are paid on a contract to provide hours of work in the category of social welfare law for which they are contracted. I repeat that we cannot pay different rates for the same work, so the right way forward is fixed fees for such advice.

The fees in the consultation document that caused so much concern were based on solicitors’ pay rates. I listened carefully to those in the not-for-profit sector during the summer. They said that they see different clients than solicitors and that their clients are more vulnerable. Solicitors doing social welfare law disagree completely, saying that they see just such vulnerable people as well. Each side of the provider base also says that it does the most complex work. It seemed to be the right way forward to base a common set of fees on data from both not-for-profits and solicitors, and that is exactly what the Government have done. Average not-for-profit supplier costs are significantly higher than solicitors’ in some areas, but not all, so the new proposed fees have changed. They are now based on data from both sides. The fee for a debt case, for instance, is £70 more than in the July consultation document, and the welfare benefits case fee is £20 more.

We considered the option of London and non-London fees. In most categories the average London fee is higher, but the average costs of a number of suppliers in London are less than the proposed fixed fees, just as the costs of a number of firms outside London are more. The real issue is costs, not regions. I emphasise that some not-for-profit advisers work for lower fees than solicitors and vice versa and that there are variations, often large, between not-for-profit advisers doing the same work in the same geographical
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area. Those variations are not explained by any difference perceptible to the LSC or me or claimed in the meetings that I have had. I should also make it clear that many suppliers of both kinds work for less than the proposed new case fees. Concerns were also raised about an escape clause, which we have altered; I shall not go into detail.

Having explained all that, I hope that my hon. Friends can see that there is absolutely no reason why quality should be adversely impacted. Indeed, it will be enhanced, because no one will be permitted to contract until they have been peer reviewed. They will all be continually peer-reviewed. Quality will improve as well as quantity.

I turn to transitional arrangements. We have decided to delay implementation of the changes until October. In the meantime, the existing payment scheme will continue. The not-for-profit sector expressed complaints and concern about the proposal to move to payment in arrears, because not-for-profit advisers are now paid three months in advance. We accept that it is compatible with the contract to carry on doing so, and we will continue to pay the not-for-profit sector in advance, although payment will eventually be monthly, not quarterly. That transition can be introduced gently.

In terms of numbers of cases, not-for-profit productivity has gone up strikingly in recent years, particularly during the past year. I praise the sector for it. Productivity is already high. A significant portion of the increase in acts of advice that I mentioned comes from that sector. Many not-for-profits’ performance is already at least commensurate with solicitors’. That means that not-for-profits can be moved to fixed fees—based, remember, on the average costs that they and solicitors claim now—in 2008.

Arrangements will have to be made for transitional provision. Payment for work in progress will be calculated on an hourly basis and so on. The whole point will be to cushion the not-for-profit sector’s move to the new system and to encourage the sector, not to damage it. We will hold discussions with representative bodies throughout the process, exactly as I have throughout the summer, to ensure that the transition occurs sustainably. The position is rather like that of my hon. Friend the Member for Regent’s Park and Kensington, North. The complaint is not about fixed fees as such; it is about the transition, and we have examined that process.

It being Five o’clock, the motion for the Adjournment of the sitting lapsed, without Question put.

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