Legal Aid Payments

Lord Clarke of Nottingham Excerpts

Thursday 17th June 2010 Commons Chamber

[Simon Hughes (Bermondsey and Old Southwark) (LD) (Urgent Question)]

To ask the Secretary of State for Justice if he will make a statement on the consequences of the timing of legal aid payments to the charity Refugee and Migrant Justice.

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

Refugee and Migrant Justice entered into administration earlier this week. It wrote to me a month ago warning me of the risk, and has since made requests for substantial assistance from public funds. The organisation was one of many that provide legal advice and representation to individuals on asylum and immigration matters funded by legal aid. The Legal Services Commission is confident that there is widespread provision of legal advice in this area and that overall capacity will not be affected by the closure of Refugee and Migrant Justice. More than 250 offices nationally are currently providing this type of service.

It may help if I explain the background to this unfortunate situation. The Legal Services Commission has worked closely with Refugee and Migrant Justice for the last few years to help the organisation to make the change to a system of payment based on units of work, the graduated fees scheme. As a result, Refugee and Migrant Justice has received substantial support—over and above the support given to not-for-profit and other organisations—to help it transfer to the current payment system.

However, it is crucial that the Government achieve value for public money. The fixed fee system introduced three years ago by the last Government is already being successfully used by the vast majority of not-for-profit organisations in this area of law. As other organisations have successfully made the transition, it is only reasonable to expect Refugee and Migrant Justice to do the same.

It has been suggested, and is implied in the hon. Gentleman’s question, that under this system payments to Refugee and Migrant Justice have been delayed. It is not a question of any late payments. Refugee and Migrant Justice was paid what was due. However, it did not make the efficiency savings that other providers made.

There is significant long-term interest in the work from other providers, both not-for-profit organisations and private solicitor firms. The Legal Services Commission is currently running a tender round for new contracts for immigration and asylum services from October 2010. There has been an increase in the number of offices applying to do the work. Providers have also bid to handle more than double the amount of cases currently available. It would be wrong to divert legal aid funds to one of the bidders in the middle of the bidding process.

In my opinion, given this unfortunate situation, the highest priority must be the vulnerable clients of Refugee and Migrant Justice. Now that the organisation has left the market, the Legal Services Commission will work with it and other providers to seek to minimise disruption and ensure that clients continue to receive a service. I have checked this morning and I can assure the House that the LSC is working closely with the administrators to ensure that any disruption to clients is minimised. Even today, LSC staff have prioritised the approximately 20 clients of Refugee and Migrant Justice who have court appearances.

The Under-Secretary of State for Justice, my hon. Friend the Member for Huntingdon (Mr Djanogly), will ensure that LSC staff continue to prioritise that area. He and I agree that the main task now is to ensure that the interests of that vulnerable group are properly protected and that no one is left without the legal assistance they require.

[Simon Hughes]

I am grateful to the Secretary of State for his full and careful response. On behalf of colleagues who have huge numbers of asylum and immigration cases involving people who use those services, may I say that I hope he appreciates the importance of the subject to them and to our constituents?

Does the right hon. and learned Gentleman accept that currently—so I am advised—13,000 clients are being looked after by Refugee and Migrant Justice, including nearly 1,000 children, who are of course very vulnerable? Does he accept, too, that the reason for the financial problem is the change in the payment system? Although there has been a reduction in income because the payment system has changed, Refugee and Migrant Justice has also reduced its costs by the same amount—I am advised that it is by 40%—and is now being paid in arrears rather than up front, a system that the Law Society and immigration law practitioners have said is unsustainable. I should be grateful if, in time, the Secretary of State would discuss with those organisations how we might improve the system.

Can the right hon. and learned Gentleman give an assurance that he or his hon. Friend, the Under-Secretary of State will make sure that all clients who have been the responsibility of the organisation are given the assurance that their cases will be fully looked after in the immediate days ahead? Are there any other charities in the field with the same sort of problem? If so, there needs to be some continuing and widened support. Will he or our hon. Friend be willing to meet those of us with a direct interest, and the organisations where appropriate, to make sure that there is a stable and secure footing in the years and months ahead for this most important legally aided work?

[Mr Clarke]

I am grateful to the hon. Member. Certainly the problem arose as a result of the change to the graduated fees scheme in 2007, but I do not accept that the failure was necessarily caused by that. Every other organisation, including the other not-for-profit organisations, has coped with this. I do not criticise the 2007 decision, but it was designed to improve the efficiency of the use of public funds in providing large amounts of money to give legal aid to those making asylum claims or facing threats of deportation, or whatever. As far as I am aware, this is the only organisation that proved in the end unable to manage its affairs and its finances to avoid the demise that has occurred.

I know that the system is not popular; I know that the Law Society does not like it, but in these difficult times I am not going to go back on it, because it does provide value for money. We have just invited tenders under the system, and the number of people who want to provide services in this area has actually gone up.

[Mr Speaker]

Order. May I ask the Secretary of State to turn to address the House? I want to hear his mellifluous tones.

[Mr Clarke]

Amongst many others, Mr. Speaker, so I will certainly address the House.

I agree with the hon. Member that the main problem now is the vulnerable clients up and down the country. We think that there is a wind-off process going on; Refugee and Migrant Justice is still, of course, entitled to be paid for the work going on, but I have asked the Legal Services Commission to pay very strong attention to that. My hon. Friend the Under-Secretary will be giving more attention to that today, to make sure that there is no problem occurring. Certainly one of us will meet the hon. Member and other interested Members, although we may have to take advice on whether we can properly meet them in the middle of the bidding process. This is complicated by the fact that we were in the middle of a bidding contest, which means that one cannot suddenly divert lots of money to one of the bidders.

[Mr David Hanson (Delyn) (Lab)]

May I first apologise on behalf of my right hon. Friend the Member for Blackburn (Mr Straw), who is out of London today but who takes an interest in these matters generally?

This is a major first: we have the deputy leader of one of the governing parties challenging his own Government on the Floor of the House. I look forward to more of that in the future from the Liberal Democrats.

The policy of returning people under 18 years old to safe places in countries such as Afghanistan was introduced by my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) when he was Home Secretary, and we support it, but it was introduced on the basis of ensuring that there was fair legal representation, of quality, for those who were potentially being deported. Will the Lord Chancellor take steps today to assess, as I think he has already, the viability of Refugee and Migrant Justice, and ensure that this is not just a cash-flow problem? If it is a cash-flow problem, will he ensure that he examines it as a matter of urgency?

Will the Lord Chancellor also meet his right hon. Friend the Home Secretary to look at the issues of joint tendering? I understand that there is tendering for this type of service involving both Departments, and I think there needs to be some consideration of that. Will he particularly look at the points made by the hon. Member for Bermondsey and Old Southwark (Simon Hughes) in relation to the client group who are now potentially left without legal representation, so that we ensure that they receive proper representation of quality and are not forced to undertake representation with, potentially, providers who are not giving the level of service that we would expect?

Finally, in the longer term, will the Lord Chancellor look at the Legal Services Commission as a whole? One thing that my right hon. Friend the Member for Blackburn wished to do was to look at providing for that organisation to become an executive agency as a matter of urgency. We noticed that that was not included in the Gracious Speech; had our party secured government, it would have been. I should be grateful if, in the longer term, the Lord Chancellor looked at those issues for the House.

--- Later in debate ---

[Mr Clarke]

First, I doubt that my hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) was asking a particularly aggressive question; he was rightly seeking some more information about a worrying situation, and I do not think the two of us actually disagreed. In any event, coalition government should give us—certainly those of us in the House not bound by collective responsibility—the opportunity to give up the fatuous media convention that every member of every party automatically agrees with every other member of the same party on each and every issue, which the public have never believed anyway.

To return to the more serious question, the organisation is now in administration, so whether it is even remotely possible to rescue its finances is properly a question for the administrators, not for us. It appears to have got into very serious trouble because, over the past month, it asked for large sums to be paid from the legal aid fund for things such as rent. I have already stressed—I accept that the right hon. Member for Delyn (Mr Hanson) was making the same point as my hon. Friend the Member for Bermondsey and Old Southwark—that we must look at the client group and ensure that there is no hiatus in the representation of children and others who were looking to the body, but I think that that can be done.

We rather supported the previous Government’s indications that the LSC should be examined and that consideration should be given to making it an agency, because we must be clear about where policy making is proceeding in the area. I assure the right hon. Gentleman that that is actively in hand, because we have to face difficult issues under the legal aid heading. The matter did not make the Queen’s Speech because important though it is to him, me and many others who look for proper representation in our courts, it was a bit too detailed.

[Several hon. Members]

rose—

[Bob Russell (Colchester) (LD)]

I was extremely disappointed by the statement. Complacency seemed to be there; the good samaritan was certainly not. On behalf of those who worked out of the Ipswich office, and in the absence of any other east of England Member wishing to speak, may I ask the Secretary of State to confirm that Members of Parliament who represent predominantly urban seats will find that their work load increases as a consequence of the situation?

[Mr Clarke]

With the greatest respect, we face a lot of demands on legal aid. Public money should be used to provide individuals with the legal representation they require, but we cannot suddenly start diverting huge sums out of the legal aid budget to bail out a voluntary body that got itself into a financial mess because it did not make the adjustments for the 2007 system that everyone else succeeded in making. I underline the point that plenty of people—both not-for-profit bodies and professionals—want to provide such services and that an increasing number are trying to get into the market. We are ensuring that no one is left without the representation they require.

[Keith Vaz (Leicester East) (Lab)]

Some of us on the Labour Benches did not support the previous Government’s cuts to legal aid in this area because, as representatives of inner-city areas, we realised that there were few specialist immigration solicitors. Will the Lord Chancellor ask the LSC to consider an emergency franchising of those firms that have expertise so that the casework may be dealt with? The problem is the casework that is not being done by RMJ, so how do we help people now?

[Mr Clarke]

We will not go back on the graduated fees scheme. It might well be that the previous Government will not have been the only one who had to examine what could be done to improve the efficiency of the legal aid scheme and to address its costs, although I realise that that will not be altogether popular.

There are a lot of specialist firms, although there could no doubt be more. The number of firms bidding has gone up in the present contract round, with 330 organisations bidding for twice the amount of work available. However, I will ask the LSC to consider whether something like the right hon. Gentleman’s proposal might be required in particular cities or areas.

[Stephen Mosley (City of Chester) (Con)]

I think that part of the problem is that this is not an isolated situation. One of my constituents is owed £11,000 from the past financial year by the LSC. Yesterday, I received an e-mail from the policy consultant of NAGALRO, the professional association for family court advisers and independent social work practitioners, to say that some of its workers are owed more than £15,000 from the previous year—

[Mr Speaker]

Order. May I gently say to the hon. Gentleman—he is a new Member and these things take time—that an urgent question of this kind is narrowly focused on a particular organisation operating in a given area and that questions and answers must be confined to that? We have heard the hon. Gentleman, and I call the Secretary of State to make a brief reply.

[Mr Clarke]

We have inherited a few problems in this area, and we are reviewing policy, so I will take on board the very helpful comments of my hon. Friend the Member for City of Chester (Stephen Mosley).

[Kerry McCarthy (Bristol East) (Lab)]

I think the right hon. and learned Gentleman is confusing quantity with quality when it comes to legal advice on asylum and immigration. Just because there are lots of people coming forward to provide it, it does not mean to say that they are providing good services. Every day in my constituency work I see people who are not getting good advice. Does he agree that it is a false economy for people to go to firms that will not provide them with the service they need? It just means that they then go through the appeals process and make further representations, and that clogs up the system. We should focus on getting reputable organisations, such as the one in question, up and running and providing the services that people need.

[Mr Clarke]

The contract operation is based on both quality and quantity. My hon. Friend the Under-Secretary and I will certainly ensure that the Legal Services Commission follows through on the fact that there are meant to be quality standards; it is not just a matter of making bids for the work. However, we cannot intervene and take money out of the legal aid fund to rescue one voluntary body. That body is briefing everybody through very extensive public relations activity: archbishops are writing to me, and everybody seems to be informed that the body has gone broke, but someone is still producing a great deal of campaigning material on its behalf. It does very valuable work, but it is no good diverting money from the fund to it because it is the only one that has gone bust.

[Fiona Mactaggart (Slough) (Lab)]

What this high-quality body has done is highlight a problem that is not restricted to it. In my constituency, which has high immigration advice need, there is no LSC-funded adviser. Will the Secretary of State bring together those Members who have a large number of such cases to discuss with him whether there are better ways of funding immigration advice in our constituencies?

[Mr Clarke]

I am sure that my hon. Friend the Under-Secretary and I will be only too happy to meet the Members of Parliament particularly affected by the issue. We will have to take advice on whether we will be subject to any kind of legal review if we do that in the middle of the bidding process but, subject to that, we would welcome advice from Members who have particularly large numbers of such cases to deal with, because we will have to look at the whole provision of legal aid in this and other areas.

[Mr David Lammy (Tottenham) (Lab)]

The right hon. and learned Gentleman has made much of the fact that this is the only voluntary body that has found itself in such difficulties. Does he recognise the volume of immigration and asylum work that has been done and that has to be done? He suggests that other comparable bodies have not found themselves in such a situation; can he name some of those that particularly relate to immigration and asylum?

[Mr Clarke]

The trust that folded had a 7% market share. It was, of course, part of the old advisory service, which was split up some time ago. The other half of the old advisory service is to get a much bigger market share—over 20%. We are talking about a policy of the last Government, and one with which I do not disagree. The graduated fee scheme was introduced in order to get better value for money out of the legal aid scheme, and everybody had to adjust to it. So far as I am aware, the body is the only one that is in great financial difficulties. In a way, it would have been very awkward for us if it folded after we had awarded the contracts. We would have been in a mess if we had discovered that we had awarded a contract to a financially insecure organisation that went down once we were relying on it to do the work. As far as I am aware, everyone else who is bidding is, I hope, in a sound financial state.

[Mr George Mudie (Leeds East) (Lab)]

I accept the Secretary of State’s calm approach, and his objective of looking after customers, but I wonder about the accuracy of that. In Leeds, vulnerable people have great difficulty getting representation. We are talking about matters of life and death to those individuals. Will he spell out how he will assure them and this Chamber that no one will go forward without proper representation? In Leeds there is real difficulty, even with the organisation working, to meet the need in the market. How will pulling this firm out of the market help those people to get representation?

[Mr Clarke]

The LSC tells us that it has full cover for the work. It made a special intervention in 22 cases in which there were court appearances today to make sure that there was representation. I have no reason to doubt that the LSC is on top of the problem, but my hon. Friend the Under-Secretary will spend the rest of the day reassuring us that the LSC and our Department are doing everything they reasonably can to make sure that there is no difficult transition for any of the vulnerable people concerned.

[Several hon. Members]

rose—

[Liz Kendall (Leicester West) (Lab)]

Will the Secretary of State provide me and other Members who have a real interest in this issue with regular updates on what is happening? I appreciate his offer to meet us, and the fact that he says he is working to make sure that people have the representation they need meanwhile, but we need that information, too, so that we can share it with our constituents and the organisations involved in providing help and support to asylum seekers and people with immigration cases.

[Mr Clarke]

We will certainly consider that request carefully. Of course, if the hon. Lady or any other Member asks for specific information, or says that they do not have enough information, we will certainly do our best to respond and give the information required.

[Mr Tom Watson (West Bromwich East) (Lab)]

Will the Secretary of State quantify the additional tax-funded resources that have been allocated to support asylum seekers who are affected by the problem?

[Mr Clarke]

I have to say that I do not yet have at my fingertips the precise increase in recent years in legal aid dependent on immigration cases, or the additional amounts that may have been provided in recent years, but initial amounts of funding were provided for a very large number of purposes by the last Government, and most of those cases are now having to be looked at again.