Not-for-profit Advice Sector

Toby Perkins Excerpts

Tuesday 6th March 2012 Westminster Hall

[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.

--- Later in debate ---

[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.