Memorandum from the Lord Chancellor's
THE COURT OF PROTECTION (AMENDMENT) RULES (S.I. 2000/2025)
1. The Lord Chancellor's Department submits this
memorandum in response to the Committee's request dated 25 October
2000 on the following point which seeks clarification of some
specific changes in the fee rates:
Explain the reasons for the increases
in the fees specified in relation to paragraphs 3(1)(iv) and (v),
(2), (3) and 7(a) of the Appendix substituted by rule 8.
2. The introduction of flat fees was a direct response
to criticism of the previous fee structure and fulfilled the commitment
made by the Lord Chancellor in "Making ChangesThe
Future of the Public Trust Office", in April 2000, that
"The existing fee structure will be reviewed and we will
seek to replace it with a simplified flat fee structure, with
fixed fees for the different services provided. These flat fees
will represent the average actual costs of the services".
3. The new fees are fixed fees for particular services.
They were introduced in response to criticism from the Public
Accounts Committee (PAC), the National Audit Office (NAO) and
the Quinquennial Review (QQR) that there was cross subsidy as
the main annual administration fees were based on ability to pay
and fees did not reflect the service provided.
4. The following provides a background to the introduction
of the new fees from 1 September 2000. The specific points are
addressed in paragraphs 9 to 12.
5. PAC Conclusion (xix) published in 1999, in a follow
up to its report in 1994, stated: "The PTO has achieved a
reduction in the cross-subsidy of Public Trustee receivership
patients by private receivership patients from 52 per cent in
1994-95 to 32 per cent in 1997-98, just missing its target of
30 per cent. The Lord Chancellor's Department believes that without
public subsidy there is limited scope to reduce the cross-subsidy
further. However, the PTO and the Lord Chancellor's Department
should continue to examine the scope for further reductions, for
example through efficiency savings".
6. The Government's response was: "The PTO to
re-examine both the way in which fees are charged and the scope
for efficiency savings. PTO to review and aim to simplify the
current complex fee structure and reduce the scope for error.
The changes will ensure that the fees charged by the PTO, and
all those with whom it contracts, are based primarily on a proper
assessment of the work undertaken in each individual case, supported
by an audit trail."
7. NAO also reported in 1999 in a follow up to its
report in 1994: "Differentiate costs and caseload data to
a lower level so that efficiencies and inefficiencies of different
types of work can be identified."
8. The QQR's observations and recommendations published
in November 1999 embraced the need to:
- simplify the fee structures
- charge for services provided
- remove any cross subsidies
- consider new service providers
- bring about rapid change, and
- introduce a mechanism that allows for the support
of those people who cannot pay
9. The increases in the fees for specific services
should be seen in the context of the reduction in the annual administration
fee which should benefit most patients through either reduced
fees or through fee remission where hardship can be proved. The
annual administration fee is the most significant cost incurred
by patients and affects all patients. The fees which are the subject
of this memorandum are applied in particular circumstances where
patients request additional services. They do not therefore affect
10. The increases should also be seen in the context
of the PTO's response to the criticisms from the PAC, NAO and
11. The fees reflect the full cost of estimated effort
required to provide the specific services. The calculation is
based on full cost recovery of the budget figures for PTO expenditure
for 99/00 and 00/01 and direct assessments of the average time
taken to provide Mental Health services. The calculation of fees
is based on an average cost of performing each service. This has
achieved the overall objective of introducing a simple fee system
which reflects the cost of the services provided.
12. The specific responses are:
3.(1) On any order (or, as the
case may be, on any approval given by the court under an order),
or, as the case may be, on any application for such an order or
approval, made by the court in the exercise of powers conferred
3.(2) On an application for an order or direction
to be made by the court in exercise of the powers conferred by
section 36(9) of the Trustee Act 1925 (appointment of trustees).
The fee in each of the three above cases has increased
from £50 to £110. The fee of £50 was set in 1984
and did not reflect the cost of providing the services. The increase
is broadly in line with inflation over this 16 year period.
3.(3) on an application for an
order or authority to made by the court under section 96(1)(e)
of the [Mental Health] Act  (execution of will).
The fee has increased from £100 to £475.
The fee of £100 was set in 1984 and did not reflect the cost
of providing the services. This fee reflects the fact that this
is a very resource intensive activity.
7. On the death of a patient:-
(a) where the Public Trustee has been appointed
The fee has increased from £300 to £1015.
The fee was last increased in 1999 when it was increased to £300
from the previous level of £250 which had been established
in 1994. Neither fee was based upon the cost of providing the
services. Winding up is a discrete function of Receivership Division
and the new fee was calculated using the cost of the staff in
this area divided by the caseload.
13. The new fees mark a significant step forward
from fees based on ability to pay to fees that are based on the
cost of the service provided. They fulfil the Lord Chancellor's
commitment given in Making Changes.
31 October 2000