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Session 2008 - 09
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Public Bill Committee Debates

The Committee consisted of the following Members:

Chairman: Mr. Gary Streeter
Armstrong, Hilary (North-West Durham) (Lab)
Brake, Tom (Carshalton and Wallington) (LD)
Burrowes, Mr. David (Enfield, Southgate) (Con)
Davies, Philip (Shipley) (Con)
Dhanda, Mr. Parmjit (Gloucester) (Lab)
Harris, Mr. Tom (Glasgow, South) (Lab)
Hesford, Stephen (Wirral, West) (Lab)
Howarth, David (Cambridge) (LD)
Kawczynski, Daniel (Shrewsbury and Atcham) (Con)
Laxton, Mr. Bob (Derby, North) (Lab)
Lucas, Ian (Wrexham) (Lab)
Malik, Mr. Shahid (Parliamentary Under-Secretary of State for Justice)
Moran, Margaret (Luton, South) (Lab)
Stanley, Sir John (Tonbridge and Malling) (Con)
Turner, Dr. Desmond (Brighton, Kemptown) (Lab)
Wright, Jeremy (Rugby and Kenilworth) (Con)
Gosia McBride, Committee Clerk
† attended the Committee

Fifth Delegated Legislation Committee

Wednesday 11 February 2009

[Mr. Gary Streeter in the Chair]

Draft Criminal Defence Service (Information Requests) Regulations 2009

2.30 pm
The Parliamentary Under-Secretary of State for Justice (Mr. Shahid Malik): I beg to move,
That the Committee has considered the draft Criminal Defence Service (Information Requests) Regulations 2009.
It is a pleasure to move the motion under your stewardship, Mr. Streeter. I know that that is said often, but I say it very sincerely.
This instrument allows the Legal Services Commission, as the authority responsible for granting publicly funded representation in criminal cases, to request specific information from the Department for Work and Pensions or Her Majesty’s Revenue and Customs for the purpose of confirming details submitted by an applicant in relation to their financial eligibility for criminal legal aid. It follows implementation of section 57 of the Criminal Justice and Immigration Act 2008, which inserted paragraphs 6 to 8 into schedule 3 to the Access to Justice Act 1999.
Means-testing was introduced in the magistrates courts in October 2006. The Government have a clear responsibility to ensure that legal aid is granted only to those applicants who are financially eligible under the new scheme, and that the process of assessment and grant is as speedy and efficient as possible. That is essential if legal aid resources are to be targeted at the most vulnerable while ensuring that those who can afford to pay their defence costs are properly asked to do so. Implementing an effective process by which an applicant’s financial status can be verified correctly is clearly central to meeting the objectives of the means-testing scheme, at the same time as maintaining the scheme’s integrity and reputation.
For members of the Committee who are not familiar with the means-testing scheme, I should point out that certain categories of applicant are automatically passported through the financial eligibility test, including defendants under the age of 18 and those in receipt of one of the four passporting benefits: income support, income-based jobseeker’s allowance, guaranteed state pension credit, and income-related employment and support allowance. Although the means-testing scheme now works well in the magistrates courts, we continue to look at ways to improve it—for example, the new arrangements in this statutory instrument.
To date, there has been a formal agreement between the DWP and Her Majesty’s Courts Service that allows HMCS to confirm whether applicants are in receipt of a benefit that renders them financially eligible for legal aid without further assessment of their income. There is also an informal agreement that allows confirmation of other forms of benefit income with the DWP and other forms of non-benefit income with HMRC. This instrument will put those working practices on a much clearer statutory footing.
Not every application undergoes verification. For example, to avoid delays, applications may be accepted on the basis of self-certification. For such cases, the Legal Services Commission has, in agreement with the National Audit Office, adopted a system of proportionate post-event checks, to ensure that any risk to public funds is kept at or below an acceptable level. However, although such checks are undertaken with the written consent of the applicant on the legal aid form, the Government believe that a more comprehensive and effective framework is required to support the process. Such a framework would assist with individuals who declare zero income on their application forms. Although the Legal Services Commission would not be able to demonstrate conclusively that an applicant had no income, appropriate checks with the DWP would confirm whether a defendant was receiving any benefits, and checks with HMRC would confirm any legitimate income. That will prove invaluable in combating potential fraud.
The amendment to primary legislation supported by the new statutory instrument will put the arrangements on a much more formal footing and allow for the necessary robustness and scrutiny. A second related statutory instrument, the Criminal Defence Service (Information Requests) (Prescribed Benefits) Regulations 2009, was laid on 9 February 2009. It details the list of benefits to be considered when assessing an individual’s benefit status. While the amendments to schedule 3 of the 1999 Act detailed some of the information that may be the subject of a request, such as name, address and national insurance number, the regulations can specify further information that might be sought.
The statutory instrument under discussion specifies that information may be requested about an individual’s income, capital gains and benefits administered by HMRC. It also applies to information about the applicant’s status as a company director or partner in a business. Schedule 3 also allows information to be requested about any benefits that the applicant is receiving from the Department for Work and Pensions. The statutory instrument extends that to benefits received during the two-year period that precedes the legal aid application.
I stress that the new arrangements will not make a substantial difference to defendants, solicitors or courts in their forms or processes. There is therefore no risk of a delay to existing court proceedings or of placing an additional burden on defendants or, indeed, solicitors. Members of the Committee might wish to note that both the affirmative statutory instrument and the negative statutory instrument were the subject of a 12-week consultation exercise last summer. The exercise generated three responses from the Crown Prosecution Service, the Law Society and the Justices Clerks Society, and all were broadly supportive of the Government’s proposals.
Nothing within the new legislative framework dilutes the Government’s obligations to protect an individual’s personal information and to maintain confidentiality. Indeed, primary legislation expressly forbids any disclosure of information that contravenes the Data Protection Act 1998. It specifically makes it a criminal offence to disclose the information for a purpose other than that related to the administration and operation of the means test.
Philip Davies (Shipley) (Con): I am sure that all the reassurances given by the Minister are helpful but, given the many leaks by Government agencies of private information over the past few years, what confidence can people have in the fact that the information will not be leaked or used for other purposes?
Mr. Malik: I am pleased that the hon. Gentleman is reassured by what I had to say, and I hope to reassure him further.
Following the publication of Sir Gus O’Donnell’s data handling report on 25 June 2008, which deals expressly with the matter raised by the hon. Gentleman, I can confirm that officials in my Department are undertaking a privacy impact assessment of the data sharing arrangements. That will be taken forward in liaison with the Information Commissioner’s office, and a final document will be published on the Ministry of Justice website. We are confident that the proposed arrangements for requesting information set out in the regulations are both necessary and proportionate, and that proper measures are in place to afford sufficient protection to applicants.
Philip Davies: Will the Minister give way?
The Chairman: I think that the Minister has finished.
2.39 pm
Mr. David Burrowes (Enfield, Southgate) (Con): It is a particular pleasure to serve under your chairmanship, Mr. Streeter. I understand that this is your debut. I am not sure whether you should have a cap to celebrate your first occasion out as a Chairman, given that we will be celebrating David Beckham’s historic 107th cap this evening. I do not know if you would wish to have as many caps as a Chairman, Mr. Streeter, but I wish you well. As you share some responsibility for encouraging me into the House, you will have to share responsibility for enduring these minutes as I go through the statutory instrument. Before we go into the detail of the regulations, I declare a particular interest as a criminal defence solicitor.
The quality of the rationale behind the statutory instrument is sound, in terms of ensuring that criminal legal aid is accurately and properly guaranteed to those applicants who meet the appropriate financial eligibility criteria. That rationale formed the basis for paragraph 6 of schedule 3 to the 1999 Act, inserted by section 57 of the 2008 Act.
The process for verifying means test applications has previously been reliant on a voluntary arrangement, with the defendant giving his written consent for verifying financial information. While the 2008 Act paves the way for the regulations, we need to ask whether it is appropriate, at this time, to put current practice on to a statutory basis. Essentially, the application form, which provides the basis for justifying the means that will then form the determination for the legal aid officer, is signed by defendants on a voluntary basis, who make the declaration that they are willing for their information to be verified to find whether they are in receipt of benefits or in work.
That is what takes place. I am not aware of any incidents when an applicant has refused to provide that consent. Will the Minister provide some evidence of what has happened so that we are reassured that it is important to move beyond the voluntary arrangement of consent by the applicant to one of a statutory basis to obtain the relevant information?
Hilary Armstrong (North-West Durham) (Lab): What does the hon. Gentleman suggest should be done if people refuse to provide their consent now?
Mr. Burrowes: The right hon. Lady raises a good point, which relates to whether there is evidence of anyone refusing. The purpose of the regulations is to ensure that there is a gateway so that the court officer can look at the DWP’s computer records to see whether a benefit is not only applied, but properly applied.
The rationale behind the regulations is to ensure that there is a time-limited process so that there are no delays from when the application is put in to the point at which there is verification of the person being on benefits or in work. The question is whether there is evidence that delays result from the process of verification and whether the delays go upstream from the application being lodged, to when the court officer will consider it and then go through the verification process. That process is currently carried out by way of voluntary agreements, rather than on a statutory basis, as proposed in the regulations.
Practitioners and others are concerned that the Government’s approach to cluster administration officers away from courts means that a delay is already built into the system. So there is a delay before an application is even considered, and that is before we lock into the proposals, which will ensure that a gateway is open to verify benefits. Has the Minister fully considered whether the concern about delay could be properly met by dealing with the administrative log-jams rather than necessarily through the process that is being proposed?
The policy idea came from a letter sent in the beginning of June 2007 by the hon. and learned Member for Redcar (Vera Baird). It concluded:
“Lastly, in response to practical concerns raised about the working of the real time link between courts and the DWP to process means test applications from those in receipt of ‘passportable’ benefits, it is proposed to introduce a statutory gateway to ensure applications are dealt with as swiftly and accurately as possible.”
The rationale is focused primarily on timing, and that is our concern. It is important that the Minister can justify dealing with the issue of timing in the regulations rather than by dealing with existing administrative problems in the system.
The letter focused on passportable benefits and the need to ensure that they are dealt with swiftly and accurately. If we look at schedule 3 to the 1999 Act, as amended by the 2008 Act, it is clear that the information request goes beyond simply asking for information from the Department for Work and Pensions and includes going to Her Majesty’s Revenue and Customs for employment information. Paragraph 6(3) is about
“the disclosure of...information...whether or not the individual is employed...the name and address of the employer...the individual’s national insurance number”,
and sub-paragraph (3)(d) refers to any other information made by way of regulation.
Philip Davies: My hon. Friend is making a good point. The regulations request a lot of information—about employment, pension income, social security income, traded income, property income, savings and investment income, and any other income beyond that. The Minister said that the Government were conducting a privacy impact assessment. Does my hon. Friend not think that it might have been better had they conducted the privacy impact assessment beforehand, rather than after?
Mr. Burrowes: I do not take much reassurance from that privacy impact assessment.
We need to ensure that legislation before the House is properly evidence-based. There is evidence that the verification process is being extended beyond what was anticipated not so long ago in the 2008 Act, as set out in paragraph 6(3)(a) to (c) of schedule 3 to the 1999 Act, which requested wholly reasonable information about employment and national insurance number. However, extending it by regulation to a whole host of other areas raises a question that the Minister needs to answer. What is the evidence for extending that verification process?
That goes to the heart of the purpose of the regulations. Is the purpose as set in that letter of June 2007? Let us remember that the reference is to benefits and not to other areas of concern to HMRC. The letter stated:
“The statutory gateway would only allow the sharing of relevant information for the specific purpose of administering the grant of legal aid”.
The Minister sought to assure us that that is the purpose of the regulations. Will he confirm that the other categories of information—employment, income and capital—will be gathered purely for the purposes of a legal aid application, or could that go wider and be used for something for which we would seek justification? Could it go into the area of identifying fraudulent claims and practice? Is that at the root of the additional information that is being requested of applicants, when dealing with their private income? Has an assessment been made of the need to go down that route?
The costs and benefits are analysed in the impact assessment that was provided for the 2008 Act, which is helpfully appended to the explanatory memorandum. The point is made that there is a need for secondary legislation because there would be the benefit of detecting fraud quickly. That seems to be one reason why we have the regulations. However, their focus, and the specific purpose for which our agreement is sought, is to administer the grant of legal aid. That is the primary intention of the regulations. It is not to detect fraud; other pieces of legislation are in place that properly do that. Will the Minister provide some evidence, or clarification, that the purpose is the specific one identified in June 2007, or is this a broader agenda of using the information that will be obtained in order to carry out investigation in relation to fraud?
The issue of fraud is a real one. It is raised many times. I do not propose to go into that debate, but one problem is the overpayment of benefits, not least for prisoners who continue to receive benefits while in prison. The extent of that abuse of the system has been identified by the Public Administration Committee. It would be tempting to use the information, including receipt of benefits, obtained from imprisoned legal aid applicants to flag up a prisoner who is in receipt of benefits and continues to receive them. An inquiry could then be conducted about repayment and fraudulent claims
Will the Minister clarify whether the information obtained by this gateway scheme, subject to the regulations, will be used to detect and combat fraud? If that is the case, we need to be aware of it. It might be a justifiable aim, but it has not been identified as a specific purpose. There might be other ways in which that could take place.
Finally, one of the aims is to have accurate information when determining applications. Will the Minister provide information about the number of investigations that have already taken place regarding those disclosures that take place day in, day out, when signatures have been put to information that might not be accurate? Have there been any investigations regarding the accuracy and fraudulence of legal aid application forms? Have any prosecutions or convictions arisen from that? Subject to those answers, I do not intend to oppose the motion.
2.51 pm
Tom Brake (Carshalton and Wallington) (LD): It is a pleasure to serve under your chairmanship, Mr. Streeter. I am sure you will ensure that matters are concluded more swiftly than they were are at many meetings of the Westminster Foundation for Democracy that we jointly attended.
I echo many of the points made by the hon. Member for Enfield, Southgate. The statutory instruments represents another incremental encroachment on privacy issues and an incremental growth in data sharing. I echo the point made in an intervention that the Government do not have a good track record when it comes to safeguarding people’s data. The greater the exchange of data between Departments, the greater the risk of information that we do not want in the public domain seeping out.
There are privacy implications, and I hope that when the Minister responds he will clarify his point about conducting a privacy impact assessment. It was not clear whether he was saying that that was happening across the Department as a whole, or whether it was happening specifically in relation to the statutory instrument. As has been mentioned, it would have been preferable for the privacy impact assessment to have been conducted before, rather than after, the statutory instrument was presented to the Committee.
I echo some of the questions raised and perhaps the Minister will confirm whether the statutory instrument is being introduced because a high level of fraud has been detected. If that is the case, perhaps he can give us some figures on how much, how often and what sums of money are involved. Will he clarify whether the measure is due to delays in applications and what the source of those delays is? Is it to do with saving money? If so, are the Government committed to ploughing back any savings into the criminal legal aid budget—something that we are concerned about in terms of the overall level of funding? I hope that the Minister will provide clarity on that.
The summary analysis of the explanatory memorandum tells us that
“much more comprehensive information about an applicant’s financial status can be disclosed”.
There is a long list of such information in regulation 3, but is there any other relevant financial information, or is there any information that could not be disclosed as a result of a request?
The Minister reassured us that the Government will safeguard the data. Will he explain who from within the Legal Services Commission will be entitled to seek that information? Could that be any employee of the LSC? Are there grades regarding at what level such a request can be made?
Those are my key questions. I wish to restate my concern that there seems to be a general trend towards more data sharing without the right level of scrutiny. It is not appropriate to raise concerns that we have on clause 152 of the Coroners and Justice Bill today, but I say in passing that it seems to allow an almost carte blanche approach when it comes to requesting data. The clause has been drawn extremely broadly, and will enable the authorisation of data sharing with any person in pursuit of any relevant policy objective. The statutory instrument is just another example of that level of data sharing without the safeguards, perhaps leading to the sorts of databases that the Government have talked about implementing, and that should be a source of concern.
2.55 pm
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