Transforming Legal Aid: evidence taken by the Committee - Justice Committee Contents

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

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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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