Not-for-profit Advice Sector

Tuesday 6th March 2012 Westminster Hall

12:56

[Yvonne Fovargue (Makerfield) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Caton.

I begin with the comments made by the Lord Chancellor and Secretary of State for Justice, who said that the proposed changes to legal aid are not an attack on women and children; they are an attack on fat cat lawyers. Perhaps he could say that to the 1,000 people who used the specialist welfare benefit advice service at the Bolton citizens advice bureau in the month of January alone. Perhaps he could say that to someone like Jeannie, who e-mailed last night, extremely pleased with the result in the House of Lords, saying that perhaps now people like her can leave an extremely dangerous situation and receive the financial help and support to do so before they are murdered.

The changes to legal aid will have a destabilising effect on the funding of advice agencies, law centres and citizens advice bureaux. Hundreds, if not thousands, if not millions, will lose out. The funding cuts will have a disproportionate effect on the not-for-profit sector, which the Government’s own impact assessment agrees will receive 77% of the cuts to civil legal aid. As I have often said, advice agency funding is a bit like a game of Jenga—it is complicated, it is interdependent, and small amounts removed can lead to the whole structure crashing down, leaving vulnerable clients underneath with nowhere else to go.

It is not worth looking at the new position under the Legal Aid, Sentencing and Punishment of Offenders Bill without looking at the current position. Citizens advice bureaux say that they will receive £51.3 million less in 2012-13 than in 2010-11. Law centres have had a 52% cut in their local authority funding. Coupled with the devastating effect that the legal aid cuts will have, citizens advice bureaux will lose £28.4 million, and law centres will lose £6 million and more than 85% of their current legal aid funding. Up to 18 law centres could be lost and up to 50% of citizens advice bureaux—more than 200 bureaux with 1,500 outlets—could close completely. If the changes go through, 100% of law centres and CABs say that they will operate on a vastly reduced service.

In total, the not-for-profit agencies will lose £51 million. In my borough of Wigan there will be a cut of £428,000 for specialist work: the citizens advice bureau loses £133,000, which is 3.5 caseworkers plus their admin support, and the legal aid lawyers, who provide the rest of the social welfare law help, will lose the remainder. These are not fat cat lawyers; they are lawyers working with the most disadvantaged people in their community.

[Rehman Chishti (Gillingham and Rainham) (Con)]

With regard to not-for-profit advice services and centres, has the hon. Lady seen the statement dated 22 November 2011 by the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd), who is the Minister for Civil Society? He says that the Government have committed £16.8 million towards not-for-profit advice centres and services.

[Yvonne Fovargue]

I have seen that statement. I will mention statements made by Ministers, including both the Secretary of State for Justice and the Chief Secretary to the Treasury, who yesterday made an announcement about advice funding.

Citizens advice bureaux alone will lose 500 specialists. Make no mistake: this is specialist work. It is not simple form-filling, which people can do by themselves. The bureau in my constituency told me that in the past three months appeals to the commissioners have increased by 50%. Surely, people are not expected to do this by themselves.

I will tell hon. Members the story of one CAB client called Sharon, who went there when she was told that her income support claim would be stopped as she was living with her ex-husband Darren, who should support her financially. After a lengthy interview with an adviser, Sharon told the specialist caseworker that she was not living with Darren, but that he used her address for financial purposes as he often did not have a permanent address for long periods and that he also stayed, on occasion, to help care for her, as she had severe and chronic mental health problems.

The adviser challenged the Department for Work and Pensions decision, using the lengthy, complex case law about the living-together test, and provided a written submission to the tribunal contesting the DWP’s interpretation of the case law, and expert evidence to show that Sharon’s relationship with Darren was a close friendship. At the appeal, the tribunal judge commented on the substantial body of evidence provided by the specialist and used it to conclude that Darren’s relationship with Sharon was

“more akin to an adult child who goes to care for a frail elderly relative who is living in their own home.”

All Sharon’s benefits were reinstated.

Where does the Minister expect people like Sharon to go for help in future?

[Mr Andrew Smith (Oxford East) (Lab)]

I congratulate my hon. Friend on securing this important debate and support the argument that she is making so eloquently. Is it not a particularly cruel irony that these cuts happen at precisely the time when, because of benefit cuts and working tax credit loss, families are under especially acute pressure? Therefore there is double harm from these damaging cuts.

[Yvonne Fovargue]

I agree. The need for advice will increase when universal credit and the personal independence payment come through. All evidence from the past proves that the need for advice increases when there are changes to the benefit system, particularly in the six months before and after.

There will be no places to go to pick up the slack. Age Concern, the pro bono unit and the free representation unit—all the agencies mentioned by the Minister and the Secretary of State as being able to pick up the slack—have categorically said that this is not possible. Specialist services will be lost.

[Susan Elan Jones (Clwyd South) (Lab)]

I congratulate my hon. Friend on securing the debate. To be honest, most hon. Members would be delighted if these measures concerned fat cat lawyers.

Six paid posts will go at Citizens Advice in Wrexham, leading to an additional problem. What happens to the service that is provided for a couple of hours a week or a fortnight in the surrounding villages? Does my hon. Friend agree that, if services were cut, the impact on villages such as Rhosllannerchrugog and Chirk would be devastating for people living there, particularly those who are currently out of work or on low incomes, who would have to pay additionally for travel to the urban centre—if they could get appointments?

[Yvonne Fovargue]

I agree. The effect on people using the services, who are disproportionately on a low income, will be devastating. Individuals will not appeal, which will end up costing the state more—hon. Members should remember that they have been unlawfully denied benefit—or may take the case themselves and be unable to present the evidence effectively or provide the right sort of evidence, or will end up at their Member of Parliament’s surgeries. I think all hon. Members will admit that we are not legal experts. However, there will be nowhere else for us to refer such people. I recommend to the Minister a report produced by the Young Legal Aid Lawyers, which demonstrates how much MPs rely on their local advice centres.

[Andrew Percy (Brigg and Goole) (Con)]

Will the hon. Lady give way?

[Yvonne Fovargue]

I need to make a tiny bit of progress, but I will later.

So far we have talked only about welfare benefits. Debt clients will lose access to early advice, giving the perverse result that they may be sent away and told, “If you get into more debt and are at risk of losing your home, we might be able to see you.” Clients who are unlawfully dismissed from employment will have nowhere to go and will end up claiming benefits.

This loss of specialist provision has great implications for the future. The experience of specialists will be lost, not just for this generation, but to future generations, because they are training other advisers—often volunteers—but will be unable to pass on their experience because they will not be there within the agency.

I remind the Minister of the cost of cases. A case such as Sharon’s, which has benefited her, cost £148. That is how much a welfare benefits case costs. A debt case costs £180 and a housing case costs £160. What are the knock-on costs to the other agencies of removing this small amount of funding?

The Minister has said many times that he disagrees with the King’s College and CAB figures on the savings made to the state by keeping such matters in scope. What is his estimate? Has any estimate been made by the Government of the knock-on costs of removing specialist work from legal aid?

The real tragedy, as my hon. Friend the Member for Clwyd South (Susan Elan Jones) mentioned, could be the loss of whole agencies. Often, large agencies have done the right thing and diversified their funding and contracted with the Legal Services Commission. The services provided by the Manchester community legal advice service were jointly commissioned by the local authority and the LSC in October 2010. A three-year contract was awarded until October 2013, with the possibility of two more years if the targets were hit—and they have been. Some £1.2 million of legal aid funding will be directly lost by that service and that is likely to have knock-on costs of another £800,000 leading to more than £2 million being lost from that service. In addition, 34 specialist advisers will be lost and 97% of the specialist services throughout Manchester will go. Contracts have been signed for premises and other essentials, predicated on the three-year contract that was given to the service. Cuts pose a risk to the continuation of the whole CAB and community legal advice service in the city of Manchester.

In effect, Manchester could become a desert in terms of face-to-face advice. Who in the city will be affected by that? The majority of the clients, as my hon. Friend the Member for Clwyd South said, are on low incomes, or have a disability, or are black and minority ethnic. They experience higher than average rates of unemployment, debt and homelessness. These are the people that the cuts will affect—not fat cat lawyers. Will the Minister please comment on the future of the community legal advice services, whose staff signed contracts in good faith and now find that those contracts are being reneged on? That is just one example.

When this matter is spoken about in the main Chamber there are many fine words from all parties, but as a feisty volunteer said to the mayor when he spoke about the CAB in respect of a funding cut, “Fine words butter no parsnips. Let’s see the colour of your money.” That is what we need.

We may talk about the transition fund—£20 million given for advice agencies—but transition, to me, means moving on. I cannot see where advice agencies are going to move to, to get specialist funding. I feel that a lot of them will be transitioning into oblivion.

[Toby Perkins (Chesterfield) (Lab)]

I congratulate my hon. Friend on securing the debate. She is hitting on a key issue; the continued existence of the advice agencies is obviously important but ultimately, if their clients cannot afford to access the services, the existence of the organisation itself is of little value. The legal aid funding that supported welfare claims and appeals was fundamental to many of those people continuing to access benefits to which, it turned out, they were entitled. She is generous to assume that the Government are genuine about wanting to find an alternative, but is it possible that they like the idea that a lot of people will not be able to claim the benefits in the future? That would save money not only on legal aid but in welfare. Is it possible that everything has been planned?

[Yvonne Fovargue]

Were I a cynic, I might agree with my hon. Friend. Only a few weeks ago, in this very Chamber, the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling), mentioned that the backlog was of almost nine or 10 months, which will certainly not be the case if people do not have access to appeals any more.

I welcome the announcement by the Chief Secretary to the Treasury that there will be more money for advice, but I am a pragmatist and have worked for an advice agency, so the bottom line is when, how much and what for—without answers to those questions, my welcome cannot be too great. As my hon. Friend the Member for Chesterfield (Toby Perkins) said, is it a coincidence that the funding will be removed at the same time as the need for advice will increase? What assessment has been made of the need for specialist advice in the period of change? Finally, has the Minister—I know it is not his area—discussed with his colleagues when the advice review is due to be published? I thought it would be essential to publish the results of the advice review before the decisions are made on the removal of legal aid from advice agencies.

I welcome the vote in the other place that people should have access to legal services that meet their needs effectively. Citizens Advice and other advice agencies have been offering such services for more than 70 years, which are as vital now as they were then.

[Dr William McCrea (South Antrim) (DUP)]

Advice services such as Citizens Advice have expressed concerns about the effect of the Bill. Citizens Advice stated that

“what’s left…of legal aid will be…unworkable for too many advice providers.”

Is that the opinion of the hon. Lady as well?

[Yvonne Fovargue]

It is, because of what is known as a critical mass in the area. We should not forget that advice agencies have already suffered an unplanned 10% cut in the rates of such cases this year. To remove legal aid completely would be to destabilise; for the small amount of work left in scope, it might not be worth employing an adviser—in fact, an adviser could not be afforded.

I have always believed that a thriving advice sector contributes to a healthy society with fairness and access to justice for all at its heart. The changes to legal aid rip the heart out of the advice sector and will leave the vulnerable lost and alone, knocking at the doors of cash-starved local authorities and of MPs’ surgeries. The changes are not only heartless but economically unsound.

13:13

[The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)]

I congratulate the hon. Member for Makerfield (Yvonne Fovargue) on securing the debate, and on her contributions to a vigorous and informative discussion of an important issue. I understand and share the strong concerns expressed, and the high level of interest, in debates on the value of the not-for-profit advice sector throughout consideration of the Legal Aid, Sentencing and Punishment of Offenders Bill in both Houses. Today, I would like to deal with the concerns expressed on behalf of Jeannie, Sharon and other vulnerable people, and assure the hon. Lady that we have listened and are taking action.

The Government value highly the important role of not-for-profit organisations such as Citizens Advice and law centres in delivering advice services locally. The Government want to support such organisations, particularly at the current time. Reforms to the legal aid system will, as the hon. Lady is aware, reduce the organisations’ income, and my colleagues throughout Government and I appreciate that times are difficult for free advice services, which are understandably concerned about their future. Given the financial climate, however, any Government today would have to take difficult decisions and make major changes to the services that they fund. Legal aid expenditure is approximately £2.2 billion per annum, which is 25% of the Ministry of Justice’s budget. Legal aid must play its part in fulfilling the Government’s commitment to reduce the fiscal deficit and return this country’s economy to stability and growth. The proposed legal aid reforms therefore have the additional aim of achieving substantial savings.

We are not making the changes lightly, although the importance of seeing them in context cannot be overstated. Our structural deficit, which we inherited from the Opposition, and their mismanagement of the economy present a range of challenges to our economy and to our ethos on public service provision. I am, however, confident about, and stand by, the criteria that we have employed in determining what areas should attract funding under the Bill.

In the Bill, we have sought to define clearly those areas that the Government believe should attract public funding in future under a reformed legal aid scheme. That will allow at least some certainty as to the areas in the legal aid market that we will continue to support and that, I hope, will thrive. We are aware and fully acknowledge that there will be implications for future provision: fewer legal aid providers are likely to be needed; the methods through which many services are delivered will change; organisations might change; and advice provision will also change. That is alongside other changes to the legal market, such as alternative business structures. The full impact assessment has been published, but the hon. Lady also asked about the knock-on costs, and it is true that those are sometimes difficult to define because they often depend on behavioural change, such as people switching from family courts to mediation.

The result of the changes is not necessarily the decline of a thriving legal aid market; the market can still thrive if it adapts. We must acknowledge the need for acceptance and recognition of the fact that the market will be different. We must consider constructively how best people can be assisted, and how sustainable voluntary organisations can be run under the new framework. The important issue is whether services will be available for clients, rather than whether that service is provided by any particular type of provider in a particular way. The expansion of telephone-based advice, to which the hon. Lady referred, will create contracting opportunities, and we already have examples of providers, including those from the not-for-profit advice sector, that run face-to-face contracts alongside centralised telephone advice contracts as part of their business model.

[Yvonne Fovargue]

How would the Minister answer Steve Hynes from the Legal Action Group, who said that if we wanted to create a system that removes access to advice, we should make it a telephone-based system?

[Mr Djanogly]

I have spoken to the gentleman about that, as I have to the hon. Lady, who made the same point in Committee. The Government are determined in their view that telephone advice, if used appropriately and provided for the right clients, can be a helpful service, not least for those who are disabled or live in remote rural areas, for instance.

[Andrew Percy]

I appreciate what the Minister is saying. As he must know from his surgeries, many constituents come to us and say that the last thing that they want to do is have a telephone conversation with us—they want to see us face to face. Can he assure us that residents who need assistance and do not want to access it down the telephone line—a lot of older people in particular have problems with that—will continue to be able to get face-to-face advice?

[Mr Djanogly]

The telephone service will be used only in a limited number of areas, so that we can see how it works, and yes, if someone is unsuitable for receiving telephone advice, perhaps because of their age, the alternative of face-to-face advice will be available.

I am pleased to see good examples of not-for-profit organisations acting innovatively, forging partnerships with other organisations and adapting to the changing face of advice provision. I accept that the proposed reforms are likely to be particularly challenging to the not-for-profit sector. Legal aid, however, is only one of many funding streams that citizens advice bureaux and law centres receive. For example, legal aid represents only 15% of the income of citizens advice bureaux. I also point out that our scope changes have not yet happened and will not do so for another year, giving us time to look at the changing needs of the market. Indeed, one of the major issues for the sector is changes to other sources of funding, such as local authority cuts, which are determined by local priorities, not central Government.

[Toby Perkins]

I am encouraged by the Minister’s suggestion that he has an open mind when it comes to listening to the concerns of the not-for-profit sector. I recognise what he says about the need to reduce the overall legal aid bill, but he will be aware of amendment 11, which was proposed in the House of Lords and which deals with social welfare law. My concern is that if the Minister comes through with this policy without identifying an alternative, the most vulnerable people, who are used to being on benefits and suddenly find that they are not eligible, will be desperately marooned. Will the Minister give us a sense of who might pick up the slack in those cases? If not, will he consider giving Government support to that amendment, rather than scrapping the entire savings proposals?

[Mr Djanogly]

No. What I will do is give the hon. Gentleman a clear idea of what the Government propose to do to ensure that that slack, as he called it, will not be forgotten or missed. We are committed to ensuring that people will continue to have access to good-quality, free advice in their communities. That is why the Government acted, and set up the £107 million transition fund to support the voluntary sector in managing the transition to a tighter funding environment. That is why we also launched the £20 million advice services fund, and a Government-wide review of free advice services. The advice services fund was always intended to provide support to the sector in the short term only, with the Cabinet Office review of the advice sector providing longer-term solutions. I can advise the hon. Member for Makerfield that the review is expected to conclude later this spring, and it will provide recommendations on proposals to secure the long-term sustainability of the sector.

As the hon. Lady said, the Chief Secretary to the Treasury announced only yesterday that the Budget statement will set out that further additional funding will be made available to the not-for-profit advice services in the current spending review period to support the Cabinet Office review, so that advice services are sustainable over the long term.

[Sarah Newton (Truro and Falmouth) (Con)]

I very much welcome the Cabinet Office’s work on changing the advice landscape. Will the Minister assure me that when discussions are held with the National Association of Citizens Advice Bureaux, it is encouraged to ensure that it passes the new money down to the local citizens advice bureaux, which is where most people experience the organisation’s high-quality work?

[Mr Djanogly]

Yes. The work that is being done through the Cabinet Office is looking at local CABs. I thank my hon. Friend for making that point, and also for highlighting that NACAB is funded quite separately from local CABs. It is mainly funded by the Department for Business, Innovation and Skills; that is bringing a new player into the debate. That point also highlights the complexity of the debate. One of the problems we have had in the run-up to and passage of the Bill was confusion when people misunderstood the nature of legal advice, and the general advice that is the core of CAB provision, which we are so keen to maintain.

With regard to the issue of existing contracts for law centres—community legal advice centres and networks—which was raised by the hon. Member for Makerfield, we will honour those contracts and review how best to implement the Bill when contracts need to be re-let. The needs of Manchester and the local area will be carefully considered as part of that review.

[Yvonne Fovargue]

I do not think there is a lot of confusion between generalist and specialist help in the minds of the people who use and provide it; it appears to be just in the mind of the Government. The specialist help is needed for areas such as welfare benefits. The Government have tried on many occasions to say that that is about simple form-filling. It is not. There are 8,690 pages of Department for Work and Pensions guidance given to its decision makers.

[Mr Djanogly]

As the hon. Lady knows, where there is a risk to someone’s security or liberty, or where someone is at immediate risk of losing their home, we are not ending legal aid for civil advice. There seems to be a misconception that we are taking away all legal aid for civil advice. That is simply not the case. We are prioritising our help for those who are most vulnerable, given the overall funding that we have to work with.

I can confirm that my Department is working closely with colleagues across Government, and particularly with the Cabinet Office, which is leading on this area, to support this important cross-Government work. The Prime Minister and Deputy Prime Minister are aware of the ongoing work; I hope that will assure hon. Members that the Government are listening to the concerns being voiced about the not-for-profit sector, and are urgently taking work forward to address those concerns.

13:25

Sitting suspended.