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Lord Taylor of Blackburn: My Lords, it is not often that a Back-Bencher takes part in these debates. Most of those who take part are lawyers. In the 11 minutes that the noble Lord has been on his feet, he asked just this: will the noble and learned Lord the Lord Chancellor make sure that there are sufficient funds to carry out access to justice? I have said that in one minute.

Baroness Thornton: My Lords, I oppose the amendment tabled by the noble Lord, Lord Goodhart. I may take more than a minute but I shall not take 11.

When considering the Marshalled List for today's Third Reading, I was struck by how often noble Lords from the Liberal Democrat Benches have sought to amend the Bill. Almost without exception the amendments maintain the status quo or protect an already established interest. I draw attention to that because of the contrast with the Liberal Democrat Party's tendency to promote itself as the party of radical thought and action.

I wish to make two brief remarks on the amendment. First, we are again faced with lawyers trying to give themselves budgetary "wriggle room". They seek to ring-fence moneys under this heading. That flies in the face of a consolidated budget, controlling costs, making savings on all sides, including criminal and civil, with the whole system subject to the best value regime. Secondly, an important aspect of the modernisation imposed by this legislation is that the budgetary controls are transparent. Money for legal aid comes from the

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taxpayer and we need a system which we can demonstrate is under control and can be readily understood by people. The amendment does not allow either of those factors. That is why it should be resisted.

Lord Kingsland: My Lords, although my name is not attached to the amendment, that is through inadvertence rather than intention. I support the amendment in its entirety.

The Lord Chancellor: My Lords, at Report, the House agreed that it would not be appropriate to lay down in statute that a Lord Chancellor could not consider the expected cost of funding the criminal defence service when setting the annual budget for the community legal service. The Government must be able to take account of all competing priorities when planning public spending. The noble Lord, Lord Goodhart, wrote to me after Report that he now accepts that view. It would be neither acceptable, workable or effective to seek to protect spending on the CLS by saying that Ministers may take account of expenditure on all other areas of government-funded activity in setting the CLS budget, except for the amount likely to be spent on the CDS.

The noble Lord, Lord Goodhart, has now moved an amendment dealing with the annual budgets once they have been set. Subsections (2A) and (2B) require the Lord Chancellor to inform the commission of the annual budget for the CLS, the expected cost of the CDS, and any changes in either. Those subsections are, in themselves, wholly unnecessary. The system clearly could not operate if the Lord Chancellor did not do this. I am sure the noble and learned Lord, Lord Simon of Glaisdale, would deprecate the waste of words. Subsection (2D) would require the Lord Chancellor to lay a statement of any changes before Parliament. I think it is right that the Lord Chancellor should do so; and I would be happy to give an undertaking to that effect.

Subsection (2C), however, would prevent the Lord Chancellor from changing the annual budget for the CLS once it had been set, unless the commission advised him that the change would not be detrimental to the services which were to be funded under the CLS. It is hard to see how any reduction in the budgets would not, in some sense, be detrimental. So the effect of this subsection is to prevent any reduction in the budget once it has been set.

Therefore I cannot accept this amendment. As I made clear at Report, to adopt any proposal totally to ring-fence either the CLS or CDS budget is not to live in the real world. In fact, I do not believe that any Minister in a responsible government would ever be willing--either in a statutory provision or by a non-statutory undertaking--to guarantee that a given level of spending on a particular function would be maintained, whatever other financial pressures might fall unexpectedly on this and other departments.

I have to say that to propose this amendment-- I note that it is supported by the official Opposition--is to treat opposition as a luxury which relieves them of the need or the duty to prioritise.

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Having said that, let me say that I am absolutely determined to ensure that the CLS is properly funded. But I must also tell your Lordships that it makes it more difficult to convince the public and others that legal aid expenditure should be maintained, let alone increased, if it is perceived to be out of control--both in not delivering value for money nor meeting priority needs. Indeed, I find it hard to reconcile the arguments of those who on the one hand wish, like me, to see a properly funded CLS, yet at the same time oppose those parts of the Bill that would give better control over the CDS and by other means help ensure that we get the most we can from the money available.

If in any given year spending on the CDS is higher than forecast, there is nothing in the Bill nor in any administrative arrangement within government that requires an overspend by the CDS to be made good from the CLS.

There will not be an overall legal aid budget or cash limit. Both programmes, however, form part of my departmental spending limit, along with other services such as the Court Service, magistrates' courts and other bodies for which the Lord Chancellor is responsible. I would be in the same position as any other departmental spending Minister faced with a new pressure. My colleagues would expect me to make every effort to offset the overspend by making savings elsewhere, including, but not necessarily from, the CLS. I have to say that the scope for covering a large CDS overspend from in-year savings is limited, because most of the CLS budget would already be committed to fund payments under contracts in earlier years. Of course, in exceptional circumstances, it would be open to me to seek additional resources from my colleagues, and I do not rule that out; but the starting assumption of every responsible department which lives in the real world is that it lives within its means.

I stress that the Bill will provide not only greater control over, but also far greater transparency in, the provision of publicly-funded legal services. The CLS and CDS will each be separate sub-heads on my departmental Vote. This will allow year-on-year comparison of spending plans and actual outturns; and means that any transfers between the two budgets will be reported in the annual appropriation accounts. And, as I have said, I further undertake to announce immediately to Parliament any such transfer beyond a de minimis amount.

The CLS will be based on published assessments of need produced at local level, an annual plan produced by the legal services commission of what services it is intending to secure for meeting that need and an annual report against that plan. So it will be possible to identify and compare what types and levels of services are available to the public year on year, as well as any in-year reduction or increase in those services. That transparency contrasts with the current system whereby the previous government sought to control expenditure by tightening financial eligibility, but there was no ready means to enable people to see what that actually meant in terms of reduced services,

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and hence hold the government effectively to account for their decision. I am committed to delivering the transparency which the noble Lord, Lord Goodhart, seeks to achieve through his amendment. Let me put that firmly on the record.

Finally, let me offer some further comfort to those who fear for the provision of services under the CLS. I am determined to create a properly funded community legal service. To do that, I want contracting used to achieve a strategic approach to planning how we meet priority need. But I agree that contractors will need reassurance that funding will not be suddenly cut and their contracts terminated or shrunk, if they are to invest their efforts and resources in providing the services people need. To offer some reassurance on that front, I have asked the Legal Aid Board to extend from six to 12 months the notice that needs to be given to vary or terminate a contract, except in cases of misbehaviour and breach.

It would not be prudent to go beyond that because, especially in the early years, we may need to vary contract terms; for example, to change the way services are paid for, the way work is monitored, or simply to move unused capacity from one supplier to another who is facing excess demand. However, I hope that your Lordships will agree that all this shows that we are prepared to listen to those with concerns about how pressures on the CLS budget might affect contractors and to do what we can to meet those concerns--within the realities of competing demands for scarce resources that every government Minister faces, and will always face.

On the basis of the assurances I have offered, I invite the noble Lord, Lord Goodhart, to withdraw his amendment.

Lord Goodhart: My Lords, I listened with great interest and attention to what the noble and learned Lord the Lord Chancellor said. I welcome his undertaking to lay information before Parliament in the event of any cut in the funding of the CLS. I also welcome the extension from six to 12 months of the period of notice to be given before any contract can be terminated.

Nevertheless, the noble and learned Lord has not resiled from the statement which I quoted earlier; that what is available for civil legal aid is what is left over from the budget after the prior claims of criminal legal aid have been met.

No doubt any amendment passed by your Lordships' House will be removed by the House of Commons, but it is important to establish once and for all the very great importance of the issue raised by the amendment. With that in mind, I wish to test the opinion of the House.

3.33 p.m.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 80; Not-Contents, 134.

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