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The Government are also backing Royal Mail with the funds that it needs to invest and modernise. We have made £3.5 billion available to it since 2001 to back strategic plans aimed at modernising the company and putting it on a sound financial footing. The Governments strategy clearly demonstrates a continuing commitment to the Post Office and Royal Mail Group. We recognise the important social and economic role that post offices play, particularly in deprived urban neighbourhoods and in rural areas, and the need for continuing public funding to support them.
My hon. Friend the Member for Coventry, South raised particular concerns about the plans for Crown post offices, and specifically the Hertford street branch. I understand that Post Office Ltd has announced that that branch is one of 70 around the country that will be transferred to the management of the retailer WH Smith. I further understand that the company is not yet in a position to announce further details of the move. Inevitably, therefore, there has been some uncertainty for customers and staff. I hope that further information will be available by the time of our meeting.
Post Office Ltd is working hard to create greater certainty about the future of the Crown office network. The fact that the company has already set out a clear position for the majority of the Crown post office network is to be welcomed as a significant step forward.
I understand that Post Office Ltd has written to my hon. Friend to explain the intention to transfer the office to WH Smith, and that my hon. Friend has met representatives of the company. Clearly, it will need to ensure that it provides him with confirmation of plans as soon as they become available.
The current uncertainty has arisen because the network of 450 Crown post offices is making heavy losses. Overall, it lost some £70 million last year alone. Clearly, that is not a sustainable position, and the Government fully support Post Office Ltds policy for reducing the losses, which includes maintaining a core network of Crown post offices while continuing to drive efficiencies and franchising branches if suitable opportunities arise.
We welcome the commercial deal between Post Office Ltd and WH Smith, which was announced on 19 April. That deal will secure the retention of a main post office service in each of the areas. Post Office Ltd has also stated that it will continue to run 373 Crown offices. We must make it clear that decisions on the location of individual post offices and whether they are managed by Post Office Ltd or a franchise partner is an operational decision for the company in which it is not appropriate for Ministers to interfere.
It is plainly wrong to say to customers that franchising a post office is a closure, or that it will lead to a reduction in the quality of service. Only 3 per cent. of post offices are Crown offices directly managed and staffed by Post Office Ltd employees. It is totally unreasonable to suggest that the equally hard-working sub-postmasters, sub-postmistresses and staff who work in 97 per cent. of the branches are providing an inferior service.
Staff at franchised post offices are trained by Post Office Ltd in exactly the same way as directly managed staff. Franchisees are bound by stringent contractual requirements to ensure that service standards remain at the same high level after a transfer from the direct management of Post Office Ltd. As I said, franchising is not closure. Franchises and conversions do not reduce the number of post offices. Almost 14,000 post offices are already run by private businesses, whether individuals or franchise chains, including some 900 or so of the 1,400 large town-centre main post offices. The network has always relied on private business for the majority of its outlets. The offices set to be franchised represent a tiny fraction of the network as a whole.
Mr. Cunningham: I do not know whether I misled my hon. Friend, but it will take him only a moment to correct any misunderstanding. I do not think that my hon. Friend the Member for Coventry, North-West or I were suggesting in any way that employees and postmasters were delivering an inferior service. We were discussing the frequency of deliveries and so on.
My hon. Friend also asked about the Coventry mail centre. I fully appreciate the concerns about the proposed changes to Royal Mails operations across Coventry and Northampton, but they are an operational matter for which the company has direct responsibility. I believe that Royal Mail has set out its position in a letter sent to all local MPs and in meetings with them.
It is, of course, for Royal Mail to ensure that its network operations are as efficient as possible to enable it to compete in a liberalised postal services market. I understand that the proposed development will enable Royal Mail to make a £70 million investment in new buildings and technology, and in its employees. That will improve efficiency, give customers better value and provide employees with a more modern working environment. The investment involves the relocation of existing Coventry and Northampton mail centres to a new single site in Northamptonshire. I understand that sites are still under consideration and will be subject to feasibility studies. The investment also features the development of two new delivery offices to serve Coventry. If the plans proceed in their current format, it is expected that the new delivery offices will be ready for service in 2008 and that the mail centre will be operational in 2009.
The reality is that Royal Mail needs to modernise its operations in order to improve its efficiency. The company believes that the mail centre facilities in Coventry and Northampton are no longer appropriate for a modern postal administration. Furthermore, the buildings offer no potential for redevelopment and severely limit the scope for introducing vital new automation.
Of course, the company is carefully examining the effects of the changes on its wider operations. Quality of service is the companys top priority, and this project
is all about gaining efficiencies. The company is insistent that the quality of local service will be maintained and enhanced.
As part of its planning process, the company has placed an emphasis on reducing the environmental impacts of moving its operations and people to a new site. It proposes to devise travel plans for the new developments that will include initiatives to reduce the impact of people travelling to and from work; for example, the company is considering the scope for car-sharing and coach travel.
The company also points out that the existing Coventry mail centre, because of the era in which it was built, could never be as energy-efficient as a new one. The decommissioning of that building alone will reduce the environmental impact of the companys operations, and the company has pointed out that experience elsewhere suggests that relocation to another site could actually reduce fleet activity in Coventry citythere would be fewer vehicle movements to and from the mail centre location. However, those details are still subject to analysis and development as part of the ongoing planning process.
I appreciate the concerns of the work force about change and the management of change. Royal Mail is also very conscious of their concerns. I understand that the company is keeping postal workers informed of progress. There will be changes for the employees, but the company is fully committed to supporting them as the plans progress. I understand that Royal Mail envisages that any required reduction in jobs as a result of the changes will be achieved mostly through natural turnover. There will be an opportunity for staff to transfer to other local units, and I understand that Royal Mail has told its employees that, with some flexibility, everyone who wants a role in the new structure will have one. Of course, until the final detailed plans are known, Royal Mail will not know how many people will be required at the new mail centre location. I believe that it anticipates a net reduction of approximately 200 jobs if the Northampton and Coventry operations are consolidated on one site as proposed.
I understand that Royal Mail recently advertised its preferred Northamptonshire location for the proposed new mail centre in the Official Journal of the European Union. All major public projects are required by law to be advertised in the journal to ensure that companies have equal opportunity to express an interest in the contracts.
Although we and many of our constituents say that we like our post office and that we value it highly, the reality is that, collectively, we just do not use it as we once did. It is an undeniable fact that many people now prefer to pay their bills by direct debit or to use one of the Post Offices competitors, to do their banking via the internet or a cash-point machine, to renew their motor vehicle licences online, and to keep in touch using e-mails or text messages. The result is that in some places too many branches compete for the same customers. Some 4 million fewer people use post offices each week, compared with just two years ago. Therefore, it is not accurate to say that the restructuring and closure programme is the result of European Union legislation. It is the straightforward result of the £2 million a week losses that were being
incurred on the Post Office Ltd side of the networkthe losses were estimated to be some £4 million a week last yearas well as the £70 million that Royal Mail loses from its main offices.
In the financial year 2005-06, the post office network lost £2 million a week. For too long, it was deprived of much-needed investment. This Government have reversed that approach and have invested substantial sums in supporting the networksome £2 billion since 1999. We have supported Post Office Ltd in its efforts to develop its range of financial service products. For example, Government investment included £500 million for the Horizon project to bring computer systems into every post office throughout the UK.
Mr. Leech: I thank the Minister for making time for my intervention. I would like to bring him back to the point about franchising Crown offices. When a Crown office was franchised in my constituency, we were promised that services would not be affected. Recently, refurbishment of the building led to a temporary one-week closure of the post office that then turned out to be a much longer closure. The post office is still closed today. I do not believe that refurbishment would have led to a discontinued service had the office still been a Crown office. Crown offices are being franchised with the promise that there will be no effect on service, but the reality is that that does not happen.
Jim Fitzpatrick: I hear what the hon. Gentleman says. The experience for the vast majority of customers across the country who used the franchise operations that were piloted has been positive, notwithstanding the fact that, clearly, there has been a hiccup in his post office, which
Mr. Graham Stuart (Beverley and Holderness) (Con): It is a pleasure to talk about an issue that is of great concern to my constituents and all those who are concerned about a fair and decent society: the impact of legal aid reform. I am not a lawyer and, unlike the Minister, I do not claim to be an expert on the intricacies of legal aid. However, I plan to use the debate to discuss the impact of the Governments reform of the legal aid system on Beverley and Holderness, which is a rural area with an older than average population and several pockets of severe social and economic deprivation.
free access to justice for those who need legal aid is as integral to the welfare state as the NHS or state education.
The hallmark of a decent society is good legal advice and representation for the community.[Official Report, 6 March 2007; Vol. 457, c. 1379.]
Since 1997, the cost of legal aid has increased from £1.5 billion to £2.1 billion. That sounds like a large increase, but when the figure is adjusted to reflect todays prices, it is in fact a small one. On todays prices, the 1997 budget was just over £2 billion compared with £2.1 billion today. England and Wales spend more on legal aid per capita than anywhere else in the world, and the cost to each taxpayer is nearly £100 a year. We, as a country, should be proud of that and of our determination that people should have access to legal support regardless of their income.
More than 3,000 additional criminal offences have been created since 1997. In a previous Adjournment debate, the Ministerbefore she was in her current positionhighlighted the impact of the Governments policy on the need for legal aid and support. Population increases, unprecedented large-scale immigration and increased levels of family breakdown have all placed pressure on the system but, as I have said, the amount spent on legal aid has not really increased by much above the rate of inflation.
Let me turn to the history of legal aid budgets. Twenty years ago, in 1987-88, the expenditure on legal aid at 2005-06 prices was £836 million. Ten years ago, the expenditure was £2.016 billion and, as I have said, in 2005-06 it was £2.1 billion. However, since 1997, the NHS has had a 100 per cent. increase in expenditure, funding for education and training has increased by 80 per cent. and total Government expenditure on public services has increased by nearly 60 per cent. Access to legal aid, which is a fundamental pillar of a civilised society, has not increased comparatively.
It is important to recognise that there has not been an increase in expenditure on all aspects of criminal legal aid. The LECG study of Lord Carters proposals, which was commissioned by the Law Society, states:
in the past three years, 2002-2006, costs in most areas of criminal and civil work have increased only slowly if at all, and, on a per case basis have often decreased. During 2002-2006 total legal aid cash payments have risen at a rate of 2.1 per cent. per
year. Within the CLS (Community Legal Service) payments have risen at 0.7 per cent. per year and lower CDS (Community Defence Service) payments (excluding crown court) have fallen at -1.6 per cent. Within lower CDS, police station attendance costs have risen at an average 4.4 per cent. per year, but adjusted for higher case loads risen only at 0.4 per cent. per year. Magistrates court costs have fallen by 0.1 per cent. per year and per case by 0.5 per cent.
I have cited a number of percentages to show that criminal legal aid, especially in the lower courts, has not experienced an explosion in costs. In those terms, we have no problem for which we need to find a solution.
it is clear that the Government has been unwise in attempting to reform the entire system rather than in concentrating on those areas which cause the problem: Crown Court and public children cases.
That is important in the context of my local area. In Kingston upon Hull there are eight firms that undertake publicly-funded criminal defence work, but there are none in Beverley. Although based in the centre of Kingston upon Hull, firms have historically covered magistrates courts and police stations in several towns across the East Riding of Yorkshire, including Beverley, Bridlington, Goole, Driffield, Hornsea, Withernsea and further afield. Last year, more than 8,000 people in Hull and the East Riding received help through legal aid.
Firms in Hull have fiercely opposed the Governments proposals to introduce fixed fees and to abolish travel and waiting time payments. People in those firms are committed to providing legally-aided support to the poorest and most vulnerable in our society. As colleagues mentioned in a debate in January, such people pursue their work out of conviction, rather than in pursuit of profit. They began striking in December last year and staged the third in a series of two-day strikes in February. They did so because Hull has been declared an urban area by the Government. The Government have designated 16 urban areas in which solicitors can no longer charge for travel and waiting time. That has had an impact on out-of-town courts such as those at Beverley, Goole and Bridlington. To put it simply, why would a firm pay to travel to a small provincial town to represent a defendant when it could earn exactly the same money by attending a local court?
Ms Diana R. Johnson (Kingston upon Hull, North) (Lab): Was the hon. Gentleman as surprised as me to see that Kingston upon Hull was classified as an urban area when other parts of the country, such as Norwich, Middlesbrough and Doncaster, were not? That worries me slightly.
The hon. Lady is right to be worried about that unfairness, which is the main focus of my remarks and something to which I hope that the Minister will respond. Solicitors from Hull who come out to service the magistrates court at Beverley and look after people from throughout my constituency are not paid to wait, even though a case programmed for an 11 oclock start at Beverley magistrates court will often not actually start until 2 pm. They are not paid
for travelling, and if they arrive at 11 am and the case does not start until 2 pm, it is not worth returning to Hull to go back to the office. Those people thus sit around and are not paid for waiting or travelling.
Mr. Stuart: The Minister shakes her head, yet because Hull lawyers have withdrawn their services from Beverley, two firms from Scarborough and one from Bridlington are travelling down at public costI think that they are paid £26 an hour. On Friday night, it took me one hour and 45 minutes to make a return journey to Scarborough. Those solicitors are being paid to travel and, in the circumstances that I mentioned, are sitting around from 11 am to 2 pm before the case is heard. They are being paid to wait, yet solicitors from Hull are not. I put it to the Minister that that is unfair.
Vera Baird: The hon. Gentleman is completely wrong; solicitors are paid for their travel and for waiting. One third of that element has been removed, but, none the less, they have achieved a 2 per cent. pay rise on the assumption that they go to Beverley. Actually, solicitors are not going to Beverley; they are grasping a much bigger pay rise by avoiding that obligation.
Mr. Stuart: Despite her commitment on the issue, the Minister displays a characteristic harshness towards those firms. Of course, she has practised at the Bar and is used to greater remuneration than that received by criminal defence solicitors based in Hull. Those people are, as I have said, committed to the service of those in the community who need legal defence. However, as a result of the changes, they have lost 20 per cent. of their business, so when we consider the effect of fixed fees, the idea that an increase of 2 per cent. in the average that they are paid represents a big rise is entirely false. I hope that the Minister will take that comment back and apologise to the people in those firms in Hull.
This year, by the Legal Services Commissions own figures, Hull solicitors were expected to take on the same work load as last year, but for £30,000 less. I ask the Minister whether anyone trying to run a commercial practice would do that.
Vera Baird: I have no intention of apologising for giving people a pay rise. The hon. Gentleman needs to understandI am not sure that he doesthat two thirds of the travel and waiting payments have been rolled into the fixed fee on the assumption that those solicitors would do Hull and Beverley, as they always have. If they do not go to Beverley, they will get a far bigger increase than 2 per cent. because the fees include travel to Beverley. Instead of taking any travel time to go there, they will walk from their city centre offices to Hull court and pocket the money for travel to Beverley without ever going there. I think that that results in an increase that is far more than 2 per cent.
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