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What improvements do we think there will be? The hope is for a 3 per cent reduction in congestion, which is one-third of the 10 per cent that is caused by street works. That is quite a high proportion. A lot of co-ordination of activity will be required to make it go smoothly and I do not think that will happen at all. I think we will just be investing in another department. In reality, it is a hidden tax because the permits are expected to rake in £36.3 million for local authorities, which will be very nice for them, particularly as they are no longer being funded so well from central government. They will see that huge advantage.

There will be some soft benefits, but the ROI is not very good. If I were a businessman, I would not spend £36.3 million to get a £38.7 million possible benefit. The difference is that that £38.7 million is not a concrete benefit; it is someone saying, “If we take the amount of petrol burnt by the cars sitting in traffic jams”, and so on. It is yet another hidden tax. This time it will not purely be on the motorist, but actually on everyone trying to get a better water system, better drainage, broadband connections and everything else. It concerns me and I am sorry that I cannot join in the general feeling of how wonderful this is. I am glad that this will be reviewed after a year and I hope someone does a proper cost-benefit analysis at that point.

4.30 pm

Baroness Crawley: I thank noble Lords for taking part in this interesting and intriguing discussion. I shall respond to as many of the issues raised as possible. The noble Lord, Lord Hanningfield, asked how roads would be affected when one authority operates a permit scheme but its neighbour does not. The permit scheme will specify clearly which streets and roads are within the scheme, which will be available for all to see. The notices regime will be on roads without permit schemes.

Local authorities have a statutory duty under the Traffic Management Act to facilitate the expeditious movement of all traffic on other authorities’ networks, as the noble Lord will know. Authorities must work with their neighbours where their actions will affect other authorities. That would apply to the authority running a permit scheme and to the adjacent authority running a notices scheme. There are similarities between the permit scheme and the notices scheme that mean that the difference between them should not be too great as far as the IT systems are concerned, so good communications between the authorities will still be possible and the IT systems will have mechanisms to facilitate that.

The noble Lord, Lord Hanningfield, and other noble Lords asked about the review. We recognise that the use of permits is a new way of working and it must

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be shown that benefits are realised. This takes up the final point made by the noble Earl, Lord Erroll, about a cost-benefit exercise. The first permit schemes are to be reviewed after a year of operation, so we are probably talking about the spring or summer of 2009. The review will elevate the performance of permit schemes against the current baseline. It will also compare performances against highway authorities not operating permit schemes. We will also look at information on how schemes operating over different categories of roads compare in delivering benefits—for example, highway authorities operating schemes on traffic-sensitive roads only compared with those operating schemes over all roads. In particular, the review will look closely at the appropriateness of the permit fees. We intend to publish the review and will ensure that it is provided to Parliament at the appropriate time.

The noble Lord, Lord Hanningfield, asked how many local authorities we envisage running permit schemes. Our current feedback is that at present six to eight local authorities are interested, but we envisage 150 authorities finally running schemes. We will assess each application, and each local highway authority has to justify fully its costs and benefits. Transport for London has expressed an interest and it is thought that that scheme is likely to be replicated in some London boroughs. Some of them may be ready to start with Transport for London, but others are likely to join later. Kent County Council has also expressed an interest in applying to run a permit scheme.

The noble Earl, Lord Erroll, and the noble Lord, Lord Hanningfield, asked about the three months’ notice, which they thought might be a barrier. It is required for major works only. Most connections will be much quicker and will need far shorter notice. Local authorities can be flexible about allowing an early start, if that is practical. We do not envisage it for the majority of works.

The noble Lords, Lord Bradshaw and Lord Hanningfield, raised the issue of the level of fines. The noble Lord, Lord Bradshaw, was quite passionate about this. The offences that attract FPNs in permit schemes are serious. Working without a permit or in breach of the conditions will attract a fine because they undermine the permit scheme and could have a significant detrimental effect on the management and co-ordination of the network. The levels of fines were consulted on widely, and we have changed our original proposals. It was initially proposed that working without a permit and working in breach of a condition of the permit should be level 5 offences. We have now created two different levels of offences, reflecting the severity of the offence. The first offence is at level 5, up to a maximum of £5,000, for working without a permit, and the second is less serious for breaching a permit condition, which is a level 4 offence up to a maximum of £2,500. It is worth bearing in mind that both offences may be avoided by prompt payment of a fixed penalty fee, where given.

The noble Lord, Lord Bradshaw, asked why the Secretary of State would be needed to approve the running of these schemes. These are significant new powers for authorities and there are significant costs to utilities in the permit fees. The Government want

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to be sure that the appropriate balance is struck for all parties and it is important that schemes run efficiently and with parity for both authorities and utility companies and demonstrate that they deliver the stated benefits. Again, the Government want to be sure that the schemes will achieve their objectives and do so fairly. As many utilities work across several local authority areas, as the noble Lord, Lord Hanningfield, has said, there must be some consistency between schemes to enable utilities to operate effectively and efficiently. Permit schemes are not a revenue stream for authorities and authorities must show that fee income does not exceed the share of costs of operating the permit scheme attributable to utilities over and above their duty under the New Roads and Streets Works Act 1991.

The noble Lord, Lord Bradshaw, referred to the slow delivery of the regulations. In an ideal world we would have liked a to have them earlier but these are complex matters and it is important to get it right. It is important to allow time for the utilities, authorities and others to have their say and to help to shape the regulations so that they work as intended. The key now is that we have them ready so that there is a chance to make a step change in the management of works in the streets.

The noble Lord also referred to the fixed penalty notice as being too low to be a deterrent. As I say, fixed penalty notices were adjusted after consultation and the notice for working in the street without a permit was raised from £250 to £500. I know that the noble Lord thinks that that is still not enough, but we believe that £500 is not an insignificant figure, especially in relation to minor works. Authorities also have the option of taking the utilities to court, where fines can be up to £5,000.

The noble Earl, Lord Erroll, said that permit schemes were too bureaucratic for the benefits that we claim for them. Through the working group involvement of key stakeholders, we have aimed to provide a scheme that is not unnecessarily complicated. The key aim is that at any time it should be possible for all parties to know whether there is a permit and what conditions are attached. All processes are geared to that one end. It may seem more complicated than it is because we necessarily have to provide for all eventualities. In reality we would expect many, if not most cases, to be straightforward—application made, permit issued and work carried out in accordance with the permit. But we are on a learning curve and we expect all parties to learn the ropes quickly.

The Earl of Erroll: In the cost benefit review, could the Minister include the cost of the bureaucracy on both sides, because there will be an added cost to the utilities? That would be useful in trying to make up our minds whether the schemes are worth while.

Baroness Crawley: I have just taken advice and am sure that that will be included. When we were talking about the number of highway authorities taking up the scheme, we began with the fact that there are 150 highway authorities. We hope that the majority will take up the scheme and I think I said that six to eight were in the process of doing that.

On Question, Motion agreed to.

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Criminal Defence Service (Very High Cost Cases) Regulations 2007

4.40 pm

The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Hunt of Kings Heath) rose to move, That the Grand Committee do report to the House that it has considered the Criminal Defence Service (Very High Cost Cases) Regulations 2007.

The noble Lord said: These regulations are made by the Lord Chancellor under Section 15(5) of the Access to Justice Act 1999 and are subject to the affirmative resolution procedure under Section 25(9) of that Act. This instrument is being made to bring into effect part of the changes to the Very High Cost Case (Crime) Panel recommended by my noble friend Lord Carter of Coles in his independent review of legal aid procurement.

Individuals who receive publicly funded legal representation in criminal cases can generally choose their representative. In very high cost cases, the choice of representative will be limited to members of a panel set up by the Legal Services Commission. This instrument provides that, where an individual has chosen a representative who is not a member of the panel and the case is classified as a very high cost case, the commission need not continue to fund representation. The commission will continue to have discretion to go on funding a representative who is not a member of the panel. This is because in certain circumstances—for example, when a case falls within scope only at a late stage—there would be no benefit in taking it under the very high cost contract after the bulk of the work had been completed. The instrument also provides that the individual may choose a new representative from the panel.

Very high cost cases have been managed under individual case contracts by the Legal Services Commission since 2001, and the contracting arrangements remain largely unchanged after the panel is formed. These arrangements were introduced in response to growing concerns about the rapidly growing expenditure being incurred in the longest and most complex cases in the Crown Court. It was widely recognised that the method of paying lawyers by determining appropriate fees after the event—ex post factodetermination—did not exercise control over the increasing cost of these cases. Very high cost cases account for around £100 million of legal aid expenditure each year. The management of those cases by the commission will not be changed by these regulations, and those who successfully become panel members will work with the commission in the same way that they do now.

Since 2001, a defendant’s choice of representation in fraud trials has been restricted to litigators who are members of the Serious Fraud Panel. In future, the choice in all VHCC cases will be restricted to those who are panel members. All panel members will have to meet quality criteria and have previous experience of managing such cases. It is in the best interest of all concerned, including defendants, the wider criminal justice system and taxpayers, if the most experienced representatives conduct these cases.

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The Government’s strategy for legal aid was set out in A Fairer Deal for Legal Aid in July 2005, which set out the need to rebalance spending between civil and criminal legal aid. One of the recommendations was an independent review of legal aid procurement. As I mentioned earlier, my noble friend Lord Carter carried out that review. His report, Legal Aid: A market-based approach to reform, and the accompanying DCA/Legal Services Commission consultation paper, Legal Aid: a sustainable future, were published in July 2006. The Government set out their proposals for legal aid reform in Legal Aid Reform: the Way Ahead in November 2006.

My noble friend Lord Carter proposed a number of amendments to the system of individual case contracts for very high cost cases, currently defined as cases expected to last 41 days or more at trial. He also proposed that a small proportion of trials expected to last 25 days or more be included within the VHCC scheme. My noble friend believed that better value for money could be obtained for this work by giving defence teams some probability of increased or more consistent volume in return for a modest reduction in hourly rates. To achieve this, we will establish a panel and limit access to it to defence teams who can show a track record of experience in working on very high cost cases and meet appropriate quality standards.

4.45 pm

In addition to the wider public consultation undertaken in response to the report by my noble friend, Lord Carter, the Legal Services Commission published a further consultation document, Best Value Panel for Very High Cost Cases. A response to that consultation, Best Value Panel for Very High Cost Cases:Final Response to Consultation, was publishedin April 2007, together with a final regulatory impact assessment.

These regulations anticipate amendments to two other statutory instruments by the negative resolution procedure before the panel can be implemented on 14 January 2008. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Criminal Defence Service (Very High Cost Cases) Regulations 2007. 25th Report from the Statutory Instruments Committee.—(Lord Hunt of Kings Heath.)

Lord Henley: I am grateful to the noble Lord, Lord Hunt, for his introduction of these regulations. I—like, I have no doubt, the noble Lord, Lord Thomas of Gresford—am grateful for the letter he kindly sent us setting out what the Government are doing. There will be further questions about the report by the noble Lord, Lord Carter, in due course, just as there have been debates in the past, and I do not want to get into wider Carter issues at this point. However, we are grateful that the Government are trying to ensure that anyone who is going to deal with cases of this sort will be properly qualified to do so.

Having said all that, there is only one major question that I want to put to the Government, and I am sure that the noble Lord will be able to give us a clear answer. He referred to costs, and I shall refer to the

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Explanatory Memorandum and the regulatory impact assessment detailed in it. Paragraph 4.2 of the regulatory impact assessment is entitled “VHCH expenditure and volumes”. The noble Lord mentioned that about £100 million was spent on such cases. Paragraph 4.2.3 shows that litigators cost £55 million, advocates £44 million and disbursements—whatever they are—£4 million. Paragraph 4.2.5 details which firms received what. Paragraph 4.3 is entitled “Rationale for Government Intervention”. Paragraph 4.3.1 ends by very sensibly referring to,

I would like the noble Lord to give me some sort of prediction about the figures in paragraph 4.2.2 for the year ending 2009—not 2007 or 2008 because they are too early as this will come in only in 2009. I am sure he will have those figures in front of him or, if not, that those behind him can offer him advice. If he does not have them, I do not see much point in paragraph 4.3 referring to “rationale for government intervention”. I look forward to hearing the Government’s response.

Lord Thomas of Gresford: My first task is to declare an interest. I understand from my clerk that my name has been put forward for five or six defence teams which are bidding for contracts under this new system and it looks as though I will be on the panel at some stage, perhaps by January when decisions will be made.

There has been a huge increase in the length of trials over my professional experience. In the old Stafford Crown Court there was a plaque above the jury box that commemorated the longest trial that had then taken place, which lasted 18 days. These days the prosecutor has barely cleared his throat at the end of 18 days.

Some years ago, when the very high cost cases were first introduced, I was involved in one or two—I am a little out of touch because I have been doing lengthy courts martial, which come under a different system—but they were hopelessly bureaucratic and useless. Contract managers had absolutely no experience of what went on in court, yet they were designated as approvers of whatever proposals were put to them by counsel and litigators, as they appear to be called these days, about the length of time a case would take. They had no way of judging that. I hope that by now they have a great deal of experience under their belts and are better at it. There were problems. After spending days preparing a case, any deviation required their approval and, if necessary, the adjournment of the court.

In a big case, courts cost anything between £10,000 and £15,000 a day. We had a ludicrous situation whereby a judge would be asked to adjourn so that counsel could pick up the phone to such an individual to ask whether he would be paid for reading the papers that the prosecution had served on him that morning. The last case I did was a court martial and I do not think a day went by without fresh papers being served on us. It is an ongoing problem. That need for everything to be approved is absolutely counterproductive. Nevertheless, the problem has to be tackled. The advent of the Rank

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Xerox machine lengthened trials to an enormous degree because of the production of exhibits, extra statements and so on.

We do not require such close control by someone who is not in court and who does not know what is going on, but we need rewards for doing things efficiently and quickly. It is possible to string out a case if one has nothing else to do and one wants to earn money that way, but that is contrary to the public interest. The parts of the Explanatory Memorandum and the attached regulatory impact assessment on which I have fastened are paragraphs 4.3.6 and 4.3.7. I agree that there is an opportunity to secure better value by creating a specialist panel by means of competition on price and capacity. I pause there to say that the danger is that one can create a cartel; so unless it is easy to join the panel—or at least not too difficult to join it—those on the panel will draw up the drawbridge and charge whatever they think is appropriate. If they are in competition only within a specialist panel themselves, the danger is that fees will rise.

The second matter, at paragraph 4.3.7, is that:

I could not agree more that the Government should set about finding out what the appropriate incentives and rewards are for getting counsel and solicitors to do their jobs more efficiently and to be rewarded for being capable of getting to the point of a case, without drawing it out—as happened in the Jubilee Line case, for example—to the point where everyone loses heart and the case is dropped. I cannot come forward with any particular proposition at this time but it has always irritated me that some people spend days reading unnecessary papers and exhibits and get paid for it, whereas those of us who are a little more efficient and get to the point more quickly are paid the same, or sometimes less, than the inefficient practitioner. Obviously, if there is to be a panel, it is necessary to bring these regulations into effect but, if the case starts with one solicitor who is not a member of the panel, it has to be transferred. That is just a minor part of the overall picture and there can be no possible opposition to it.

I urge the Minister and those behind him to have in the forefront of their minds not bureaucratic control over how advocates and litigators do their job but incentives and rewards for those who act efficiently and get through cases by getting to the nub of them. In the old days—unfortunately, I suppose that I am entitled to talk about the old days—the assessment of fees was left very much to the court clerk or the clerk of quarter sessions or whoever. That person was in court and knew precisely the value of a particular advocate whereas, under this system, the person who decides what the rewards should be is sitting in an office at the end of a phone and has neither the

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experience nor the knowledge adequately to control what happens or to ensure that efficiencies are made.

Lord Hunt of Kings Heath: I thank the noble Lords, Lord Henley and Lord Thomas, for their helpful and constructive remarks. I say to the noble Lord, Lord Henley, that in future I intend to write to opposition spokespersons with details of forthcoming regulations. I am happy to give that commitment to the Committee.

I recognise that this is but one aspect of a fundamental reform of the legal aid system. As the noble Lord, Lord Henley, suggested, there will be opportunities in future to discuss progress in the reform programme. I also very much accept his point that these regulations are part of a restructuring of the way in which very high cost cases are funded, and they have the dual advantage of ensuring that there will be a quality check on people who provide services in future, alongside keeping control of the cost. On that basis, there is a real advantage to the public as well as the public purse.

The noble Lord was very confident that I would have the figures to hand. I am most grateful to him for that confidence; whether it is deserved or not, we will see. The spend for these cases in 2003-04 was £26.3 million. By 2004-05, it had risen to £66.6 million and by 2005-06 it had gone up to £86.2 million. By 2006-07, it was £99.9 million. As the noble Lord will observe, there has been a quite considerable increase. The noble Lord then asked me what I thought the savings would be in a full year. The estimate that officials have produced for me suggests between £6.2 million and £12.5 million. That obviously depends on a number of factors. These cases can last two to three years, as the noble Lord, Lord Thomas, suggested. As there is a catch-up in relation to the new structure, the savings will take some time to be realised fully. Clearly, however, we aim to make savings from an early stage.

5 pm

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