Legal Aid Payments

Simon Hughes 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.