Public Bodies (Abolition of Her Majesty’s Inspectorate of Courts Administration and the Public Guardian Board) Order 2012

Lord McNally Excerpts

Wednesday 18th July 2012 Grand Committee

Moved By

[Lord McNally]

That the Grand Committee do report to the House that it has considered the Public Bodies (Abolition of Her Majesty’s Inspectorate of Courts Administration and the Public Guardian Board) Order 2012.

Relevant documents: 2nd Report from the Secondary Legislation Scrutiny Committee; 2nd Report from the Joint Committee on Statutory Instruments

[The Minister of State, Ministry of Justice (Lord McNally)]

My Lords, the purpose of this order is to abolish two of the Ministry of Justice’s public bodies: Her Majesty’s Inspectorate of Court Administration, which I shall hereafter refer to as HMICA, and the Public Guardian Board, which I shall hereafter refer to as the PGB. This omnibus order provides for abolition of these bodies, with no transfer of functions in the case of the PGB and, in the case of HMICA, with a transfer of certain functions which I will outline shortly.

The Public Bodies Act 2011, which received Royal Assent in December, was the legislative vehicle resulting from a 2010 government-wide review of all public bodies, which had as its overriding aims to increase transparency and accountability, cut out duplication of activity and discontinue unnecessary activities. In conducting individual reviews of their own public bodies, departments were asked, first, to address the overarching questions of whether a body needed to exist and whether its functions should be carried out at all and, following from this, whether it met specific tests that would justify its retention. In the case both HMICA and PGB, the Ministry of Justice felt that retention was not justified. They were therefore included in what was then the Public Bodies Bill, now the Public Bodies Act 2011.

I will now give some background on each body in turn, beginning with HMICA. It was set up in 2003 and was given two main statutory duties—first, to inspect and report on the system that supports the business of the Crown Court, county and magistrates’ courts and, secondly, to carry out joint inspection, along with other criminal justice inspectorates, of the criminal justice system. However, the situation in which HMICA was working changed greatly after it was created. Her Majesty’s Courts and Tribunals Service, previously HM Courts Service, has since that time developed and put in place more sophisticated and robust ways of carrying out audits, which has mitigated the need for independent inspection of court administration systems.

The outcome of this was a decision by the previous Administration to close HMICA administratively. It was felt, given the more robust audit and monitoring processes then in place, that continuing to fund the body was unjustified and it was closed at the end of December 2010 with the full support of the Lord Chancellor and inspectorate’s senior management. This order, therefore, merely puts on a legislative footing that which has already been administratively achieved. Closing HMICA will save around £6.4 million against the Ministry of Justice baseline for this spending review period.

The Government remain committed to joint inspection of the criminal justice system, and this order includes a transfer of functions to the other criminal justice inspectorates, which will enable them to inspect HMCTS for the purposes of joint criminal justice inspections. This will ensure that no necessary functions previously carried out by HMICA will be left without a statutory basis.

The legislative abolition of HMICA also formed part of a Ministry of Justice consultation that took place in October 2011. Eighteen responses were received, of which seven were opposed to abolition, three expressed some concerns, six stated their support for abolition and two did not express a view either way. Among those who supported abolition, the overriding feeling was that there was no need for an independent inspection of the courts in the current climate, and that HMICA’s function could be adequately carried out elsewhere. Those who opposed abolition were generally concerned that a key government body would be left without independent scrutiny, and that the inspectorate’s specific functions would be left in jeopardy. These concerns have been addressed in the transfer of functions that have been written into the order, and the Ministry of Justice therefore finds no compelling argument within the consultation responses to change its proposal to abolish.

I turn now to the Public Guardian Board, the second body addressed in this omnibus order. The PGB was set up in 2007 to scrutinise and review the way in which the Public Guardian discharges his or her functions and to make such recommendations about the matter to the Lord Chancellor as it thinks appropriate. While this is a worthwhile role, the Government believe that it can now be more effectively and efficiently delivered through new governance arrangements within the Office of the Public Guardian, which I shall hereafter refer to as the OPG, the executive agency which supports the Public Guardian’s work. The Ministry of Justice feels that a separate body for this purpose is no longer needed. As a result, the board was found not to meet the key tests for retention as part of the 2010 government-wide review of public bodies, and was listed for abolition in the Public Bodies Bill.

Following the abolition of the PGB, governance of the Public Guardian and his office will be provided, in line with usual government arrangements for executive agencies, through a management board within the OPG. This will be chaired by the OPG’s chief executive, with executive membership from the OPG and the Ministry of Justice as well as three non-executive directors. The presence of non-executive directors will provide independent scrutiny and challenge of the discharge of the Public Guardian’s functions and those of his office. Collectively, they will have relevant experience such as business and performance management, financial management and dealing with those who lack capacity. I must emphasise that the board itself has also accepted the proposal to abolish, and held its last meeting in June.

As well as fulfilling a key aim of the public bodies review of discontinuing activities that are no longer needed, the abolition of the PGB will provide savings in the region of £400,000 over the current spending review period. Implementation of the new governance arrangements for the OPG will incur some costs that will offset these savings, for which our best estimate is no more than £187,000 over the same spending review period. As with HMICA, the proposal to abolish the PGB was included in a full public consultation which ran from July to October 2011. There were a total of 12 responses, of which 10 did not oppose abolition as long as alternative governance structures for the OPG were put in place. Two were opposed to abolition due to concerns that the PGB’s functions would not be adequately carried out by other means. As we have ensured that the board’s functions will indeed be adequately replaced by the OPG’s management board, the Ministry of Justice finds no compelling reason to change the proposal to abolish.

I turn now to the scrutiny given to this order, which was laid before Parliament on 10 May. Orders under the Public Bodies Act have a minimum 40-day scrutiny period, with a committee of either House able to extend this to 60 days by resolution if that is felt necessary. This order been scrutinised by several Select Committees: in this House, the Secondary Legislation Scrutiny Committee; in another place, the Justice Select Committee; and, collectively, the Joint Committee on Statutory Instruments. None of these triggered the optional 60-day extended scrutiny period. The Secondary Legislation Scrutiny Committee reported on this order on 24 May, having requested a few points of clarification from officials. The committee was satisfied that the order met the tests set out in the Public Bodies Act, but specifically asked the Minister to address two key points during this debate, and I will now address these.

First, the report stated that public reassurance would be enhanced by the results of Her Majesty’s Courts and Tribunals Service’s scrutiny of court administration being published on an annual basis. I can confirm that Her Majesty’s Inspectorate of Prisons provides a full report of each inspection, and recommendations to improve outcomes are submitted to the relevant Secretary of State. Moreover, all these reports are published and publicly available.

Secondly, the report suggested that the Ministry of Justice should publish the outcome of the new governance arrangements for the Office of the Public Guardian. I can confirm that the Office of the Public Guardian publishes, and will continue to publish, an annual report, and that this will indeed cover governance arrangements as well as key performance indicators and monitoring outcomes. In fact, the latest OPG annual report was laid before Parliament only last week. Key stakeholders were also sent letters outlining the new governance arrangements before they came into effect, as outlined in the consultation response. The Ministry of Justice has taken on board the views of the Secondary Legislation Scrutiny Committee, and thanks it for its thorough reporting.

HMICA and the PGB are two public bodies that were created to carry out particular functions, but their roles have either been superseded by other bodies or can be carried out more efficiently and effectively through other means. HMICA is already closed administratively, and the Ministry of Justice has taken the opportunity within this order to put its residual functions on a statutory footing, ensuring ongoing scrutiny of court administration and the wider criminal justice system. The functions of the PGB have not been formally transferred but we have put robust governance mechanisms in place in the OPG that will ensure continued oversight of the work of the Public Guardian.

The Ministry of Justice remains committed to close scrutiny of the courts and tribunals system, and to continuing the excellent work of the Public Guardian. In the current financial climate, however, it is right that unnecessary activities and bodies across government should be removed; abolishing these two bodies will save the public purse several million pounds. I therefore commend this draft order to the Committee and beg to move.

[Lord Beecham]

My Lords, as the Minister has said, HMICA was effectively abolished last December. It is now, seven months later, that we have the interment in statutory form. Some sort of inquest might be thought appropriate.

This is another example of what I would call pre-legislative implementation, as I have done in respect of several other measures the Government have brought forward in the past two years. It is unfortunate that the decision has been implemented even before the relevant secondary legislation has been brought forward. Having said that, I do not dissent from the view that change is, if not necessary, then certainly not damaging, subject to the observations of the Secondary Legislation Scrutiny Committee about adequate reporting and annual reports to the public.

By sheer coincidence, I received a copy of the annual report of Her Majesty’s Courts and Tribunals Service just this week—a rather glossy document. There was very little in it about the actual operation of the courts and tribunals. There is a lot of financial information. I do not have the document with me, but my recollection is that there is only about a page or so of detailed reporting—in fairly minimal fashion—of the work of the service. Given the extra responsibilities, and while acknowledging that custodial arrangements will be dealt with separately, there ought to be a fuller report than has evidently been the practice thus far.

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We accept that these changes will be made. We look forward to rigorous annual reporting so that the performance of both the courts service and the guardianship office can be given adequate scrutiny in the public interest, particularly in relation to the public guardianship function because by definition we are dealing with many vulnerable people, so it is important that we should see perceptible progress being made in dealing with their affairs and providing a system that is accessible and efficient in so doing.

[Lord McNally]

My Lords, again, I thank the noble Lord, Lord Beecham, for his constructive response. I am not sure that it was pre-legislative implementation; perhaps it was pre-legislative anticipation, but I take the point. I also accept his point about annual reporting. I am sure that the relevant bodies will note his comments that annual reports should be just that. There should be full coverage of all areas of responsibility, particularly when the body concerned has taken on new responsibilities.

I also take on board the point about the Public Guardian. There is concern and we must be sure that oversight is proper and full. One aspect that we now hear about in relation to our ageing population is the need to make sure that those whose mental capacities may be diminished have proper protection. It is important that that is assured. We believe that the presence of non-executive directors will provide independent scrutiny and challenge to the discharge of the Public Guardian’s functions and those of his office. Collectively, the directors will have the relevant experience, including in business, performance management, financial management and dealing with those who lack capacity. There will also be non-executive director representation in the Public Guardian’s two existing stakeholder groups, which meet four times a year. There will be continued liaison between the OPG, the MoJ’s sponsor team and relevant policy officials, including those who led on the Mental Capacity Act 2005. I hope that the noble Lord will accept those assurances that his very valid questioning on this is being addressed.

I do not think that any other points were raised. I emphasise again that each report and recommendation arising from all inspections of the courts will be published for public scrutiny.

[Lord Beecham]

I am very grateful to the Minister, who has answered fully. I am stretching the purpose of today a little wider than I should, but I wonder whether it is the Lord Chancellor’s intention to reply to the letter that he received from the outgoing chairman and whether that reply will be placed in the public domain.

[Lord McNally]

Knowing the Lord Chancellor’s courtesy in all such matters, I am sure that a full reply will be sent. I will see that it is also copied to the noble Lord, Lord Beecham.

When I saw that the title of the order included “public bodies” and I saw the noble Lord, Lord Beecham, come in, I was petrified. I thought that I would be grilled, so I was even more pleased than usual to see him take his place at the Dispatch Box, rather than as a Back-Bencher. Having made that confession, I commend the Motion.

Motion agreed.