Examination of Witnesses (Questions 20-39)
ALEX ALLAN,
BARBARA MOORHOUSE
AND ROD
CLARK
17 JULY 2007
Q20 Chairman: I think we may need
our staff to talk to yours a bit further about some of the gaps.
Alex Allan: Certainly. My understanding
was that we had supplied, I think maybe earlier this week, details
of the quarterly efficiency report, but certainly, if we have
not, then we will rectify that.
Q21 Chairman: Thank you very much.
Of the reported savings to the end of December 2006 less than
a third were confirmed as final and yet you are confident that
you can achieve the planned efficiency savings by June 2007?
Alex Allan: The reason why only
some of them are classified as final is that some of the processes
by which they are measured await the final outcome of other figures
which we have not yet got, which is why they are not classed as
final yet; but we are confident that once they are audited we
will be able to demonstrate the efficiencies that we are committed
to delivering.
Barbara Moorhouse: Perhaps we
should also say that we do have a £70 million contingency
where we are planning to over-achieve our Gershon efficiency targets
and, therefore, as Alex says, we cover a significant margin that
should provide us with some comfort that any final corrections
on review, final information and, indeed, careful audit of these
to protect the service levels that underlie them will still enable
us to hopefully more than meet our formal targets.
Q22 Dr Whitehead: You have indicated
in written evidence to the Committee that the assessment of how
you would be sure that the savings did not affect the quality
of service delivered, or in terms of which way you believe they
might affect the quality of service delivered, would be based
on PSA targets, key performance indicators and customer surveys.
Could you share with us the results of those indicators and how
the surveys have turned out in terms of making sure you can deliver
that assessment?
Alex Allan: Yes. I do not know
whether Rod or Barbara want to follow this up, but, as I explained
to the Chairman, the outcomes are audited, and if what you have
done is simply cut spending and reduced the quality of service
or the outputs, then that would not score as an efficiency saving,
and so, quite rightly, we are measured on a consistent basis.
That is something which we do. We go through each different aspect
of where the efficiency saving is coming to make sure that it
is a genuine efficiency saving and not just a reduction in outputs.
I think that is slightly different for the different types of
efficiency savings, different bits of the department, whether
it is through some of the Court Service or legal aid or through
other parts.
Rod Clark: Certainly if we look
at the PSAs overall, good results in terms of improvements in
performance across a number of areas, even in areas where we are
not yet achieving the targets that we were hoping to achieve;
nevertheless, underlying that there is an improvement in performance.
Q23 Dr Whitehead: And customer service?
Rod Clark: Customer service reflected
by things like confidence in the criminal justice system, and
so on, is showing positive results.
Q24 Dr Whitehead: Conversely, you
have achieved, if that is the right word, a 30% increase on two
years in the acts of assistance provided by the Legal Service
Commission on a largely flat budget (ie the acts of assistance
have increased, the budget has remained largely flat). How are
you able to assure that the quality has not fallen in that instance
as a result of that back shift?
Rod Clark: There is an extensive
survey carried out by the LSC which takes a sample of the population
and sees what problems they face and then asks questions about
the type of help they receive, so we get some direct survey evidence
on whether they are having their problems addressed; and that
survey does not just look at the LSC, it looks at other forms
of help through other government supported and private and voluntary
sector supported sources of legal help. I think some of the key
ways in which the LSC have managed to improve the acts of assistance
have been through promoting and expanding the Community Legal
Service Direct scheme, which is a telephone-based helpline, which,
therefore, has a much wider national coverage and is easy to access
in that sense, and also working very closely with providers that
are contracted to provide the face to face service to increase
the volumes that they are delivering.
Q25 Dr Whitehead: Have recent results
demonstrated that the quality has been maintained, would you say?
Rod Clark: I certainly know nothing
from the survey results which suggests that they have not. The
survey has quite a time-lag to it because it asks about problems
experienced over the last 12 months, but certainly, as far as
I understand, I think the results remain positive.
Alex Allan: We could certainly
(and I do not know if we do anyway) share the results of the survey
with the Committee.
Q26 Dr Whitehead: Thank you. Moving
forward to the transitional period for Legal Aid 2007 to 2010
and the aim of delivering £100 million further savings on
the basis of the reform plans for Legal Aid that are currently
in train, what do you think is likely to be the effect of slippage
and also the more recently announced changes to proposed fee schemes,
firstly, on those savings, secondly, the departmental budget and,
thirdly, to the 2007 CSR settlement?
Rod Clark: The changes to the
fee schemes have some small impact on the financial projections
which will slightly add to the costs. The rather bigger impact
is around the delay, particularly on the litigators' fee in the
Crown Court, which is a major area of growth in expenditure in
the past. The cost there has been growing very steeply and the
proposed plan would cap that off, and there is a financial impact
from delaying that. However, the impact is small in relation to
the overall pattern of savings and is broadly within the plans
that we had. What it does underline, of course, is that we do
need to carry on and stick to the plans we have now got.
Q27 Dr Whitehead: Would you say,
therefore, that the plans are more driven by the need to keep
to the savings target than any intrinsic merit in the plans?
Rod Clark: No, I would not say
that, but clearly one of the objectives is to make sure that the
Legal Aid scheme continues to achieve its objectives within the
budgets that the Government has set for it.
Q28 Dr Whitehead: Is there any case,
do you think, in the combination of the emergence of the Department
of Justice after the early CSR grounds have been settled together
with those changes as far as legal aid is concerned for renegotiating
the CSR settlement?
Alex Allan: I think we have reached
a settlement. There are, as I was indicating earlier, a number
of areas to do with particularly the prison population and prison
building where the Treasury has provided some additional funding
since the CSR settlement reached by the Home Office, which we
are continuing to discuss with them in the light of Lord Carter's
review, but, as I say, at the moment we believe that the provision
we have for legal aid and the plans we have made allowing for
the changes that have been introduced that we can leave this in
the budget. It is quite challenging but we believe we can do it.
Q29 Dr Whitehead: The performance
on the PSA 5 sub-measure, which was reducing delays and resolving
those disputes that need to be decided by the courts, has, according
to the Annual Report, declined and you have also mentioned that
performance on the remaining sub-measures show slippage. You were
kind enough to indicate in your written response to the Committee
that part of the reason for the decline you mentioned was competing
pressures on limited judicial time and constraints on staffing
resources. Do you think that the need to make those efficiency
savings has contributed to the fall in performance in this particular
target and the slippage in other areas?
Alex Allan: I think that specific
comment related to the third of the target elements, and I think
it is true that we had previously been exceeding the target there
over the past two years but I think that that may have concealed
some problems on the administration of small claims in particular.
What we have seen over the last year has been a very strong growth
in small claims which tend not to settle or the proportion that
settle before they come to court is smaller than for other claims.
That has resulted in the position that you describe, and we are
taking steps to deal with that. On the other performance on the
PSA, the key issue for us has been that it is a target which is
a proportion of the problems which receive satisfactory legal
advice assistance and, as it has turned out (and this is across
the whole of all people's problems, not just ones that essentially
come directly near the department in some cases or ones where
we directly fund the sorts of services which would provide the
assistance) although, as you indicated, we have had a very big
expansion in the number of New Matter Starts by the Legal Services
Commission, that has not kept pace with the growth in the range
of problems which people on this survey basis believe they would
have benefited from legal advice and assistance.
Q30 Dr Whitehead: Would you be able
to comment on what is meant by "constraints on staffing resources"
in your written material to us.
Alex Allan: As I say, I think
this was the point on the third of the targets; this was an area
where we had been overachieving the target. We believed that in
looking at across the department at efficiencies this was an area
where we could make savings. I think that it has turned out that,
in the light of what has actually happened, we need to reassess
that, but Rod may want to say a little on that.
Rod Clark: Yes, a point to make
in that area is that some courts do continue to perform extremely
well; so there is best practice out there for managing these cases
effectively. What it is doing is turning the performance spotlight
on us to make sure that we can spread that good practice. The
whole process of achieving efficiencies within our budgets does
depend on identifying best practice where it occurs and making
sure that it is spread elsewhere.
Q31 Robert Neill: Court fee income
and expenditure is supposed to balance but the last two years
that we have got figures for (2005-06 and 2006-07) show a 15%
over-recovery, to use a euphemistic term, and a 10% over-recovery
on civil. They have made a profit out of something that is supposed
to break even. How come?
Rod Clark: The first point to
make is that if you look at both civil and family together, we
are very far from over-recovering, we are under-recovering by
quite some margin, but there has been some over-recovery in some
areas of civil cases, largely driven by the fact that there has
been a rapid increase in volume that was not forecast and, as
it were, fees that were set to cover a fixed element of fixed
cost over a relatively small number of cases has actually over-recovered
when the number of cases is much higher. What we have also been
doing is looking at our model for calculating the appropriate
level of full cost recovery in the different areas and have come
to the conclusion that there are some areas where we are over-recovering.
The proposals that we have recently been consulting on have involved
pulling back on the areas of over-recovery while seeking to increase
the fees, particularly in the family area and in some of the Magistrates
Court areas where there is quite considerable under-recovery at
the moment, so that we can balance out the situation going forward
and get to 100% full cost recovery going forward.
Q32 Robert Neill: Pulling back on
over-recovery, in other words, means reducing fees in some areas?
Rod Clark: Yes.
Q33 Robert Neill: Because the guidelines
are that the fees should not exceed the cost of providing the
service?
Rod Clark: Yes.
Q34 Robert Neill: In terms of getting
into balance, your objective to do that was, I think, by March
2008, unless I am much mistaken. Yes, by March 2008. Are you still
on track to achieve that, do you think?
Rod Clark: We will not in all
areas. We will not get to full recovery, for example, in family
higher fees, where we are aiming to get to two-thirds by March
2008, and we are looking to balance out in some of the other areas.
Q35 Robert Neill: Is the over-recovery
in civil at the moment used to offset the under-recovery in family?
It is civil and probate where you have got some quite substantial
over-recovery, is it not?
Rod Clark: Yes, in effect the
net effect is that when you take civil and family as a whole,
we are under-recovering quite considerably, and within that there
is an element of over-recovery offset by some other elements of
under-recovery and we are in the process of balancing that out
through the fee changes that we are making.
Q36 Robert Neill: The guidelines,
I assume, apply to the individual pieces of work?
Rod Clark: That is, indeed, where
we are headed.
Alex Allan: I do not think they
can apply to every single individual fee, but we try and look
at it in the round. We do, of course, have a process whereby people
on low incomes do not pay the fees anyway, and there is an explicit
subsidy put in through that as well.
Q37 Robert Neill: The volume, I take
it, is the rise in bank charge cases?
Rod Clark: That is certainly a
large element of the small claims, yes.
Q38 Robert Neill: That could continue
into the coming year, I suppose?
Rod Clark: I think our forecasts
have taken into account the higher level.
Alex Allan: We have actually been
pointing out to people that there are alternative ways of dealing
with this, for example through the Financial Services Ombudsman.
Q39 Chairman: It does not seem to
be as effective though.
Alex Allan: I think the evidence
may be mixed on that, but certainly it is not clear that pursuing
a case through the Small Claims Court is necessarily the best
way. Obviously, our job is to provide a service for people who
want it, but there may be cases that go to the Financial Services
Ombudsman and in some cases it is a more straightforward and less
stressful way of dealing with it than actually issuing small claims
and operating through the county courts.
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