Appendix B - correspondence with the Lord
Chancellor
Letter dated 1st July 2013 from
Rt Hon Chris Grayling MP, Lord Chancellor and Secretary of State
for Justice, to the Chair of the Justice Committee
In advance of the Committee hearing on Wednesday,
I want to set out my current thinking on my proposals for introducing
competitive tendering for criminal legal aid.
My twin objectives in proposing the reforms set out
in Transforming Legal Aid: Delivering a more credible and efficient
system were to reduce the cost of legal aid in the context
of the financial pressures we face while also ensuring a sustainable
market, that delivers comprehensive coverage, a quality service
and improved value for money.
My officials are currently analysing responses to
the consultation document to inform the Government's response.
As I have consistently made clear, this is a genuine consultation
and I have been listening and continue to listen to the views
of the professions and others. I have made clear throughout that
I am open to alternative proposals that meet the same core objectives,
including delivering the same level of savings.
One specific point in the consultation which has
attracted significant response is the proposal to remove client
choice in the model for competition for criminal litigation. The
rationale for proposing this change was to give greater certainty
of case volume for providers, making it easier and more predictable
for them to organise their businesses to provide the most cost-effective
service to the taxpayer - it is not a policy objective in its
own right. However, I have heard clearly from the Law Society
and other respondents that they regard client choice as fundamental
to the effective delivery of criminal legal aid. I am therefore
looking again at this issue, and expect to make changes to allow
a choice of solicitor for clients receiving criminal legal aid.
I met the President of the Law Society again last
week for another constructive discussion, and I have agreed to
explore further the proposals they have put forward to consolidate
the market in stages, using quality and capacity criteria to achieve
this. We were both clear that any future scheme for criminal legal
aid must guarantee quality legal advice and representation is
available, without giving rise to advice deserts. We agreed that
in order to meet the challenges of the future, a managed market
consolidation is necessary, ensuring services are sustainable.
It is only through sharing back-office costs, developing new ways
of working, and driving economies of scale —in the same
way that all businesses and public sector organisations have had
to do over the past few years— that legal aid providers
can sustainably provide a cost-effective quality service both
for their clients and the taxpayer. The terms of the Ministry's
spending settlement means that all parts of the budget need to
deliver savings.
I have asked my officials to work closely with colleagues
at the Law Society to explore their proposals, in the context
of our wider consideration of all the other responses we have
received.
My ministerial team and I continue to listen to the
views of the professions and other respondents. I am grateful
to the all those who have engaged constructively in the consultation
process. In light of last week's Spending Review no-one should
doubt the need for my department to reduce its expenditure on
criminal legal aid as outlined in the consultation document. I
am determined to do this in a way that maintains a sustainable
legal aid system, with quality at its heart.
I have written to you separately with regard the
Ministry of Justice Spending Round 2013 Settlement in which I
refer to the proposals to reform legal aid and the estimated savings
from such reform.
I look forward to discussing the proposals with the
Committee.
Letter dated 4th July 2013 from
the Chair of the Justice Committee, to Rt Hon Chris Grayling MP,
Lord Chancellor and Secretary of State for Justice
Thank you for giving oral evidence to us yesterday
on your Transforming Legal Aid proposals. I hope you would
agree that it was a lively and interesting session, and it was
useful for us to gain an appreciation of how your thinking is
developing in certain respects following the conclusion of the
initial consultation period.
Given your intention to bring forward modified proposals
on competitive tendering for further consultation following your
decision to introduce client choice, my Committee does not at
this stage intend to report its views on the proposals in the
original consultation document, and we shall make this clear publicly
soon, at the same time drawing attention to the oral evidence
which we took from you and earlier, on 11 June, from interested
parties. We will however maintain a keen interest in the subject,
and would like to let you know that we are likely to wish to take
oral evidence from you again later in the year on the follow-up
consultation, as well as on your other proposals on civil and
criminal legal aid, whether or not you modify them on the basis
of consultation responses or other factors. We naturally reserve
the option to report substantively on some or all of the proposals
at a later stage.
It would be helpful if you could provide some written
clarification of your savings calculations so that we could publish
that together with today's evidence transcript. Please can you
confirm what the baseline spending figures are against which the
£220m legal aid savings (from both civil and criminal legal
aid) are to be made and, of equal importance, assessed; and, if
the saving is to be made against the Legal Aid Agency budget figures
for 2013/14 (which include the effect of the LASPO cuts), whether
you will be publishing fresh impact assessments which take into
account the larger percentage cut that arises from saving £220m
from a smaller overall budget, and which include a reconsideration
of the effect on the sustainability of the market for legal services?
If you are able to provide any further information
on likely timings in relation to further consultation on and implementation
of (i) the criminal legal aid competitive tendering proposals
and (ii) the other discrete proposals relating to criminal and
civil legal aid in the consultation document that would also be
helpful.
With apologies for the short deadline, please could
I ask for a response to these points to be with us by close of
play on Monday 15 July?
I promised at today's session to forward you copies
of the correspondence we received from the Solicitors Regulation
Authority, the Bar Standards Board and the Legal Services Board
on the feasibility of completion of regulatory authorisation for
new entities within your originally proposed timetable for the
competitive tendering process, and I enclose that correspondence.
Thank you again for your assistance.
Letter dated 15th July 2013 from
Rt Hon Chris Grayling MP, Lord Chancellor and Secretary of State
for Justice, to the Chair of the Justice Committee
Thank you for your letter of 4 July and an interesting
session with the Committee last week. I was pleased to be able
to make the case for the proposals in the Transforming Legal Aid
consultation and am glad that you found the session helpful. I
am grateful for the correspondence you enclosed relating to regulatory
authorisation.
I note your intention not to report on the proposals
as published and agree that this makes sense in light of the expected
re-consultation on certain changes to the current proposals this
autumn. This will not be a re-consultation on every element of
the package. As I said at the Committee session, we are not going
back to the start and must bear down on the cost of legal aid.
Should you wish to take oral evidence from me again at a later
date I would of course be happy to appear before the Committee
again.
You asked for further information on my savings calculations.
The baseline against which estimated savings from the 'Legal Aid
Transformation' consultation are made is the Legal Aid Agency's
internal forecast for Legal Aid expenditure. These were published
in PO 156695 on 12 June 2013
(http://www.publications.parliament.uk/pa/cm201314/cmhansrd/cm130612/texU130612w0002.htm#130612w0002.htm
wgn63).
These forecasts include the impact of predicted volume
reductions and earlier reforms, including those contained in the
Legal Aid Sentencing and Punishment of Offenders Act 2012. Additionally,
the forecast assumes that, apart from policy changes factored
into the projections, fees remain fixed at current levels.
The latest projections showing legal aid forecast
expenditure up to 2016-17 are:
Year Expenditure (£ million)
2013-14 1,836
2014-15 1,719
2015-16 1,679
2016-17 1,666
The Impact Assessments that accompanied the consultation
paper estimated that in steady state the proposals would save
£220 million per annum. The Impact Assessments already take
account of the baseline changes set out above as far as it is
possible to do so given data limitations. We will be updating
the Impact Assessments in line with any changes that are made
in response to the consultation.
I am afraid, at this stage, that I am unable to provide
further information on likely timings for the expected re-consultation
and implementation thereafter. I am still in the process of considering
all the consultation responses, along with the views expressed
at several Parliamentary debates and those of the Committee and
it will depend on the decisions I take, following that consideration.
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