Joint Committee on Statutory Instruments Thirtieth Report


Memorandum from the Lord Chancellor's Department


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 Changes—The 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

Specific responses

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 all patients.

10. The increases should also be seen in the context of the PTO's response to the criticisms from the PAC, NAO and QQR.

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 by:-
      (iv)  section 96(1)(k) of the [Mental Health] Act [1983] (exercise of powers)

      (v)  section 54 of the Trustee Act 1925 (concurrent jurisdiction with High Court over trusts)

    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 [1983] (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 receiver

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

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