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Lord Goodhart: My Lords, the story that the noble Lord, Lord Kingsland, just told us about the problem that Lord Iliffe had relating to Miss Laurence's money not being looked after by the PGO raises serious questions. Indeed, the only doubt is whether the noble Lord's proposed amendment goes far enough. The gross incompetence of the PGO as shown in the ombudsman's report is quite extraordinary. Indeed, it suggests that things have gone so far that disciplinary proceedings against members of the staff for the complete failure to carry out their duties would have been called for.
There is of course a problem. The PGA is a very small department in terms of the Government as a whole and is of very little interest or concern to other parts of the Government. The DCA should consider the whole future of the PGO's fund management duties. The question certainly arises whether the fund management functions would be better if they were contracted out and the PGO were left simply with a regulatory function. This matter goes beyond anything that can be dealt with in this Bill and I hope that the DCA will examine the case carefully and conduct a proper investigation into long-term solutions. Otherwise, there is a risk that whatever
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improvements have now been achieved, in a few years' time, the inertia and incompetence may creep back again.
Baroness Andrews: My Lords, I completely understand why the noble Lord, Lord Kingsland, felt that it was so important to put that very grave story on the record. He has been an assiduous champion of that particular case, but I know that his concerns go very much to the heart of the whole administration of the Public Guardianship Office. We are very grateful for the opportunity tonight, in the context of the amendment, to respond to the issues. I can take issue with nothing that he said about the course that that case tookthe grave errors of judgment, degrees of incompetence and delays. In the ombudsman's report, he made it clear in sharp language that he was pretty shocked by what he found. It would be tempting to go into some of the detail and quote some of the more positive things that he said in response, but we completely take the point. Everything that the noble Lord said about the quality of care we completely endorse on this side of the Committee.
The noble Lord laid out his case, and I was going to make a general case in response to the notion of the public trustee. However, first, let me just say that not only do we regret the entire saga but we very much take the point that great improvements have come from it. We are very pleased that the case in question was resolved. We are even more pleased that the opportunity was taken to correct processes and systems, and the ombudsman himself paid tribute to that. The noble Lord did us the courtesy of spelling out some improvements that have been made; I could mention quite a few more, as I have a list in the back of my file which goes further than that. The purpose is to keep those matters on the record.
The changes that have been made in accounting processes, accountability and the way in which case working is dealt with are significant improvements. More exactly, the use of call centres has been abandoned and calls are now routinely directed to case work teams. That is a small change, but one that will make a big difference to the individual.
On a point made by the noble Lord, Lord Goodhart, we have created in this Bill a Public Guardian whose functions will be different; he will have no functions of receivership. Those functions are now no more. He has three functions: he will act as a registration body for LPAs, as a supervisory body for deputies and LPAs and as an investigative body. He will be a regulator. There will be no more confusion, in fact. Following from that saga, we now find that his functions as the receiver of last resort are being exercised in only 240 outstanding casesdown from 3,000.
We fully expect, by the time the Bill becomes law, that there will be no more such cases. That will be combined with the degree of supervision which will be built in to the system, when there will be a process of
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consultation before we settle on the details. I should very much like to tell the noble Lord, in view of his professional and personal interest, that we would very much welcome his participation in that process to determine what is the right degree of supervision and how it is best managed. That is something that officials and Ministers would warmly welcome. Those four changes represent my response to the "stall" as it has been set out.
In terms of the accounts in general, in view of what I have just said, the Office of the Public Guardian produces accounts only when it is acting as the receiver of last resort. As I have said, there are now only 240 such cases. Under the Bill, we are not going to be a receiver or deputy and we will not be in the position of handling accounts. That will be the responsibility of the LPA or deputy.
The amendment presumes that the Public Guardian provides accounts to the donee, but the Public Guardian has never done that for enduring powers of attorney. So the amendment is slightly misplaced, in that sense, because the Public Guardian is not in a position to do that. To follow the logic of the amendment, it would require the Public Guardian to receive accounts from all the donees of LPAs to check them, then report back to the attorney and take action. I know that in fact we are talking only about the financial donees, but the proposal is not necessary because what it suggests is not done.
I reiterate what my noble friend has said several times: as regards the role of LPA, these are often private family matters. We must be careful as regards the degree of intrusion that we encourage and enable. Certainly we want to make attorneys aware of their responsibilities and we will provide clear guidance on that. However, we do not want to deter people from agreeing to take on what can be a very sensitive and difficult responsibility by being too heavy-handed.
The important thing is that there should be safeguards in the system. SignificantlyI hope that this will reassure the noble Lorddonors of financial LPAs will be advised that they can, if they so choose, stipulate in their financial LPA that they wish the attorney to provide annual accounts to the Public Guardian or to any other third party for checking. That is a front-line defence. Therefore, the Public Guardian can check accounts not only if he is asked to do so but also if someone raises a concern. Concerns can be raised by different sorts of objectors at all stages. If an objector raises concerns about a prospective attorney at the registration stage, the court may add a requirement for the donee to lodge accounts if that would alleviate the concerns of the objector. That is a second line of defence.
Anyone can raise a concern with the Office of the Public Guardian if they fear that an attorney of a registered LPA is not acting properly. The court will then be able to direct that the attorney should lodge accounts. We believe that is robust. They could be "one-off" accounts or annual accounts. They could be lodged with the court, a solicitor, an accountant or, indeed, a third party.
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In the broader context the code of practice makes it clear to financial attorneys that they should keep accounts. We intend to issue guidance to reinforce that message. Obviously, the nature of the accounts will depend on the nature of the finances and the degree of sophistication and complexitywe would expect that. We also intend that the staff at the OPG will be able to advise the attorney on the nature of the accounts that he should keep. That may take the form of booklets to be distributed in different places.
The code will let attorneys know that they have a fiduciary duty to act in a way that benefits the donor and not the attorney. Attorneys will be reminded that they are under a duty to have regard to the code in all its legal force and that failure to do so could be raised in any court. They will also be told that the Public Guardian or the court can ask them to submit accounts at any time. That addresses the narrow point of the amendment. The broader point is that this is a function which now passes away from the Public Guardian with the loss of receivership functions.
As I said, we take very seriously what the noble Lord said. Clearly, there is a fresh spirit and intent with regard to the Public Guardian. It is sad to reflect that some of those lessons have had to be learnt in rather tragic circumstances but the Committee can have full confidence that there will be much better supervision in the future.
First, I thank the noble Baroness very much indeed for effectively endorsing the conclusions of the ombudsman's report. For the rest of our debate on these amendments I would like to draw a line under all those issues. Let us assume that the confidence that the ombudsman now reposes in the changes in the accounting procedures and so on in the existing PGO have had the effect that the noble Baroness hoped they have had. Let us now concentrate on the question of political accountability, under which heading I include issues such as the one that we are dealing with under this amendment.
I readily accept that the amendment may not be appropriately worded for the situation that is envisaged by the Bill. I must say, at the outset, that it was only late this afternoon that I appreciated that the Bill envisaged that in future the PGO would not handle any client money itself. I was under exactly the same misapprehension as the noble Lord, Lord Goodhart. The noble Baroness said, "Well, by the time the Bill becomes an Act the remaining 240 trust funds will have been passed to the private sector". I wonder why the noble Baroness is so confident about that. She cannot be so far-sighted as to know exactly when the Bill will become an Act. What makes her so certain that it will be possible to find a home for these 240 remaining funds by that date, which may well be a few months away? Looking at the noble Baroness, Lady Ashton, I expect that she wishes that it were a few weeks away.
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The purpose of this amendment is to give the country confidence that these new trust funds, handled by the private sector, are being properly and responsibly managed in accordance with the principles of trust law. The single most important characteristic that is required in relation to those principles is transparency. Everyone involved in the caring process needs to know what is going on financially. For the vast majority of clients, there will not be much money available. Every penny that goes towards their welfare will count. It is vital, therefore, that we are confident that they are getting what they merit and, at the same time, that the money is being spent responsibly. That is what I am after in my amendment.
The noble Baroness talked about codes and guidelines. Indeed, it is appropriate that the detailed rules about how transparency and accountability are achieved ought to be contained in these codes and guidelines. I know that the noble Lord, Lord Goodhart, would agree that it would be nice for us to get a flavour on paper of what the noble Baroness is talking about. It would help our later deliberations on the Bill, on Report and at Third Reading, if we could have some sense of what we are talking about here in a bit more detail and about how this accountability and transparency will be established. I am not, of course, asking for complete drafts of these things; that would be unrealistic.
There is one other important thought to express in this context. Although the financial side and the caring side are in some sense distinctthe financial side looked after by the trustee, the caring side looked after by the carer and from time to time overseen by the visitorwe must ensure that the two are nevertheless integrated. That is something else that I am looking for from the Bill; or at least I am looking for in the codes and guidelines that are made under the Bill. It is no longer acceptable that the system of financial provision on the one hand, and the physical system of care on the other, should operate in completely separate compartments as they often have in the past. The noble Baroness has already impressed me with her grasp of the subject, so I am sure that her mind will already have turned to this matter. We need to look at that aspect of the situation as well.
The Committee has been extremely indulgent in hearing me out on what has, after all, been the first of these amendments. I promise to meet the undertaking that I gave earlier that I will be more telegraphic in the way in which I approach the remaining amendments.
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