Twenty Second Report Contents

Appendix 1: Criminal Legal Aid (Remuneration) (Amendment) Regulations 2018 (SI 2018/220)

Letter from Lord Trefgarne, Chairman of the Secondary Legislation Scrutiny Committee, to Ms Lucy Frazer QC MP, Parliamentary Under Secretary at the Ministry of Justice

I am writing as Chairman of the Secondary Legislation Committee which considered these Regulations at its most recent meeting.

We understand that the Ministry of Justice’s (MOJ) standard policy with any review of Legal Aid fees is that the outcome should be cost neutral: the fees may be distributed in a different way but the total sum expended should not increase. Paragraph 10.3 of the Explanatory Memorandum to this instrument states that, exceptionally, the payment changes set out in this instrument are “likely to increase legal aid spend by an additional £9 million per year”.

We have received submissions from both the Bar Council and the Criminal Bar Association contesting this statement. Both point to Table 9 on page 21 of the Impact Assessment which does confirm that MOJ anticipates that the spend under the new scheme will be £9 million above the figures for 2014-15, but goes on to state that this would be £3 million above the figures for 2015-16 and £2 million below the figures for 2017. So rather than being more generous as indicated in the EM, the MOJ’s figures in the Impact Assessment indicate that the restructuring will represent a cut in funding of around £2 million in comparison to the most recent outturn.

Although the deviation in question is a small percentage of the total expenditure, there is a clear disparity between the figures in the Impact Assessment and the way the information is presented in the Explanatory Memorandum. As a result, there is, we believe, a risk that members of the House, and others, will fail to have a clear and accurate understanding of the implications of the new scheme.

The Committee would be grateful to receive your response to these concerns by Monday 12 March 2018.

7 March 2018

Letter from Ms Lucy Frazer QC MP to Lord Trefgarne

Thank you for your letter of 7 March 2018 regarding the Explanatory Memorandum (EM) that supports the Criminal Legal Aid (Remuneration) (Amendment) Regulations 2018. I appreciate the Committee’s careful scrutiny of this document and I am grateful to you for writing to me to offer an opportunity to clarify the EM. I apologise for the lack of clarity which you have identified. I have set out below the answers to your questions, which I hope that you will find helpful.

At the beginning of the second paragraph of your letter you raise the issue of cost neutrality. The Ministry of Justice (MOJ) does not have a standard policy about cost neutrality in respect of any review of legal aid fees. The consultation proposed a reform of the Advocates’ Graduated Fee Scheme on the basis of cost neutrality against a 2014-15 baseline, where spend was £213 million. After consultation, this was later revised to cost neutrality against figures for 2016-17, where according to the most up to date figures at the time, year-end spend was £224 million.

At the end of the second paragraph of your letter you refer to paragraph 10.3 of the EM, which suggests the potential for an ‘additional £9 million per year’. This refers to an analysis presented at Table 10 of the Impact Assessment (IA). This analysis identifies costs, totalling £9 million per year, that could not be captured in the analysis presented at Table 9 of the IA. A full explanation of these costs is provided at paragraphs 76 to 79 of the IA. I should clarify therefore that the “additional £9 million” at paragraph 10.3 of the EM is not a reference to Table 9 of the IA, as suggested in the third paragraph of your letter.

In the third paragraph you also refer to points made by the Bar Council and the Criminal Bar Association. You highlight that they suggest there is a shortfall of around £2 million in comparison to the most recently published 2016-17 AGFS spend figures. It was necessary to choose a fixed point in time to model the cost of the new scheme. The MOJ used the most up to date figures available at the time the decision was taken to revise cost neutrality from the 2014-15 year to 2016-17. At the time that decision was taken, the figures available were those published in June 2017. The new scheme is cost neutral as against those figures.

I am very grateful to you for pointing out the lack of clarity in the EM. I apologise for this and can see that it would be beneficial to amend the EM to ensure a clear and accurate understanding of the new scheme. In the circumstances I will ensure that a new EM is drafted which I will forward to you tomorrow. Thank you again for your assistance in relation to this matter.

12 March 2018

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