Legal Aid Reform

Paul Farrelly Excerpts

Thursday 3rd February 2011 Commons Chamber

[Yvonne Fovargue]

I agree with my hon. Friend. In times of stress, people often need the support of a friendly face.

For every £1 of legal aid expenditure on welfare benefits in the Wigan borough, £20.50 per year of additional benefit is obtained for clients. Nationally, for every £1 of legal aid expenditure on welfare benefits, the state potentially saves £8.80.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

rose—

[Yvonne Fovargue]

I would like to make a little progress, because the debate is quite late.

Debt is another area that will be removed from the scope of legal aid, except for cases in which the client’s home is at immediate risk. The impact assessment shows that 55% of debt clients are female and that 30% are likely to have a disability. Yet again, the consultation paper states that, although debt problems are important to the individual, they are not important enough to warrant legal aid funding.

I have seen the effects of debt on individuals, and the cost—both human and to the state, including to the NHS—of not resolving debt issues at an early stage. A project that I was involved in used a recognised NHS scale to monitor stress levels before and after the advice process dealing with unsecure debts. The primary care trust believed that in the first nine months of the project, three suicides had been prevented. At what cost? In Wigan, the citizens advice bureau deals with 616 debt clients per year at a cost of £123,000 to the state. It reschedules £4.83 million worth of debt and writes off £3.47 million worth. For the expenditure of £123,000, £367,000 is saved.

I support the expansion of financial education into schools and communities, but that will not assist people who are in debt now. My experience is that when the issue is raised in schools, more parents arrive at the advice agency’s door because they are made aware that there is somewhere to go. They almost feel that they have got permission to go there.

[Paul Farrelly]

Every conscientious MP knows the value of citizens advice bureaux. Quite simply, without them, our offices would be swamped. That prospect awaits us. My hon. Friend has highlighted the situation in Wigan. Citizens Advice has highlighted that 730 fewer people will receive specialist debt advice in Stoke-on-Trent, 1,280 fewer in my area of Newcastle-under-Lyme, and more than 1,500 fewer in north Staffordshire. Does she agree that this is not only a false economy, but a heartless cut?

[Yvonne Fovargue]

I agree with my hon. Friend. I will go on to give some figures on the impact that the proposals will have on advice agencies.

Agencies that provide telephone advice such as National Debtline have a great role to play, but they cannot replace face-to-face advice, as my hon. Friend the Member for Nottingham South (Lilian Greenwood) said. The reality is that people need to sit down with an adviser. They need the reassurance and trust of a relationship that is built up over time.

There is a reason why social welfare law problems, including employment, housing, debt and benefits, were given primarily to advice agencies: the interlinking of those problems. Limiting the scope and the type of the problems that advisers can deal with limits their ability to deal with the whole person and with all their issues. For example, legal help might prevent somebody from losing their home because of debt, but it will not address the causes of that debt, such as unfair dismissal or a refusal of sickness benefits. I could give examples of many areas that are taken out of the scope of such help, but I believe that colleagues will mention them. The list is extremely long and access for the most vulnerable is severely curtailed in many cases.

I shall turn now to the effect on citizens advice bureaux and not-for-profit providers. The Ministry of Justice estimates that this sector will lose 97% of its legal aid funding. Currently, local citizens advice bureaux receive £26 million of legal aid funding, with the largest amounts being spent on debt and benefits. If the proposals are implemented, £20 million will go in one fell swoop and there will be a significant impact on the ability to deliver not only legal aid-eligible services but all other client services. A survey undertaken by Citizens Advice showed that if the proposal went ahead, 80% of local bureaux would have to withdraw specialist services, 85% would have reduced capacity to meet clients’ needs and, most shockingly, 51%—more than half—felt that there would be a risk to the continuation of the whole CAB service in their borough.

Legal aid funding cannot be treated in isolation from other sources of advice funding, especially as the consultation assumes that people can access other services to pick up the slack. The free advice sector is suffering disproportionately from public funding reductions, and even agencies such as the Royal National Institute of Blind People, which have no legal aid funding, have approached me to say that they could not deal with any increase in demand for their services due to the impact of the proposals.