Revised Funding Code

– in the House of Lords at 8:25 pm on 25th July 2007.

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Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Government Whip 8:25 pm, 25th July 2007

rose to move, That the draft code laid before the House on 14 June be approved.

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Government Whip

My Lords, the changes to the Legal Services Commission funding code were considered in Committee in another place on 18 July and agreed. The funding code, which is created under Section 8 of the Access to Justice Act 1999, sets out the types of legal services that can be supported by civil legal aid. The funding code criteria and procedures are being modified under Section 9 of the Access to Justice Act 1999. That section requires any changes to the code criteria—as here—to be approved by both Houses of Parliament before coming into effect. This is done by laying the revised funding code before each House, rather than by tabling amendments.

The revised funding code before the House introduces three changes to the operation of legal aid in family cases. The first introduces new levels of service in private law family cases and care proceedings. The second concerns the removal of residential assessments from the scope of disbursements payable by the legal aid fund. The third concerns the application of an existing test to childcare cases to ensure that separate representation is granted only where it is necessary in an individual case.

The first set of changes to the funding code comprises changes to the levels of service for family legal aid, which are primarily intended to support the fee scheme for providing help in family private cases—cases occasioned by relationship breakdown and often involving issues of child contact or the distribution of assets. The new levels of service for legal aid in family cases are intended to support and to place greater emphasis on pre-court dispute resolution work, following arrangements piloted by the LSC over the past two years. Of course, I can reassure your Lordships that, where alternative methods of resolution are impractical or inappropriate—for example, where there is an application for an injunction for protection from harm—legal aid is still provided for legal representation at court. I can assure your Lordships that the legal aid reform programme, of which these changes form a small but important part, has been subject to extensive consultation with practitioners, representative bodies and other interested parties.

A full three-month public consultation took place last year on the legal aid fee schemes, and the family fee schemes and childcare changes were the subject of a separate further consultation this year. There has also been significant parliamentary scrutiny of our reform programme, with a full debate in another place in January and three separate debates in Westminster Hall this year alone. Alongside those debates, there has been a detailed report by the Constitutional Affairs Select Committee, to which the Ministry of Justice responded on 22 June.

I do not wish to rehearse the issues raised once again, as the changes to the funding code do not themselves implement any of the new civil legal aid fee schemes. That will be done by amendments to the legal aid contract signed by providers and by regulations that will be laid before Parliament later this year.

The second set of changes being made to the funding code concerns the removal of residential assessments from the scope of disbursements payable under legal aid. These changes are directed towards the objective, supported by many of those consulted on the legal aid reform programme, of ensuring that limited legal aid funds are applied only to their proper purpose of ensuring a fair outcome to a legal case. The issue here concerns the residential assessment of a child, sometimes of a whole family, which can be conducted over a long period—sometimes up to a year—in order to determine the most appropriate way forward in childcare proceedings. They can be very costly, although they are undertaken only in a minority of cases.

Until a few years ago, it seemed fully accepted that commissioning and paying for such an assessment was for the local authority. Local authorities have a duty under the Children Act 1989 to safeguard and promote the welfare of children in need generally and, specifically, the welfare of children in their care after an interim care order has been made, but there has been an increasing number of cases in which courts have ordered a residential assessment, with the costs to be shared among all parties. Since a typical childcare action involves two or three legally aided parties, plus the local authority, that means that most of the costs will be met from legal aid. We believe that that cannot be right. Legal aid should not be paying for therapy, education or rehabilitation; they are for the local authority as part of its duties to a child in need. If a local authority takes the view that a residential assessment offers a good chance of enabling rehabilitation safely to take place, perhaps without the need for a care order, it could offer the prospect of an improved outcome for the child and very much reduced costs for the authority on account of avoiding long-term care. Therefore, the right body to take responsibility for the decision on a residential assessment and for its costs is the local authority. Of course, a court which considers that a local authority has failed in its duty can order it to take appropriate action.

A previous funding code change in 2005 sought to exclude the costs of treatment, therapy and training from legal aid. However, it has not proved effective, since residential family centres—the main providers of family assessments—do not make a clear distinction among the various kinds of work that they offer. Accordingly, it is now proposed to exclude residential assessments completely from the scope of legal aid funding. The change is supported by many practitioners, the Law Society and the Legal Aid Practitioners Group.

The third set of changes concerns the application of an existing test to childcare cases to ensure that separate representation is granted only where it is necessary in an individual case. This criterion, which already applies to every other category of case covered by the funding code, allows funding to be refused where there is no need for separate representation, in particular in the light of other parties already represented in the proceedings. The Government and the LSC have taken account of the view expressed in consultation and are not proceeding with the most substantive part of the earlier proposals to introduce a form of merits criterion for funding parties in childcare cases. The LSC recognised the view put forward by consultees, which was that parents can become disengaged from childcare proceedings at different stages and for different reasons so there are difficulties with the merits test in those circumstances. Instead, we have maintained the current entitlement system for certain parties in childcare cases, subject only to applying the tests that I have described to those cases. While it is important that separate funding is not granted where it is unnecessary, I assure noble Lords that where it is necessary—for example, due to a conflict of interest—it will continue to be granted, even under these new arrangements.

I hope that the House has found this explanation of the revised funding code of help. The work done in this limited area of the legal aid reform programme is an example of the effort that is being made to create a legal aid system that delivers the maximum benefit and makes the best use of the resources available. I commend the revised funding code to the House. I beg to move.

Moved, That the draft code laid before the House on 14 June be approved. 21st Report from the Statutory Instruments Committee.—(Lord Evans of Temple Guiting.)

Photo of Lord Henley Lord Henley Shadow Minister, Justice 8:30 pm, 25th July 2007

My Lords, I am grateful to the Minister for that explanation of what the revised funding code is doing and where it has been revised. As I looked through the code this morning, I found it difficult to understand the amendments, but I was grateful for the assistance that I had from the noble Lord's office. I think that I can see where the amendments are and how the code was amended.

As the Minister made clear, the code has been through the Joint Committee on Statutory Instruments and the Merits Committee and has been debated in another place, although the debate was somewhat brief. I think it went through on the nod, which does not amount to much of a debate. Its predecessor was debated in this House some two years ago and seemed to have general support from my noble friend Lord Kingsland, who spoke from these Benches, and from the noble Lord, Lord Goodhart, who spoke from the Liberal Benches. I also understand that regulations will come through later in the year that, as the Minister suggested, may be a little more controversial. No doubt, we can look forward to debating them in due course.

I do not think that I have anything to add, other than that I would have been grateful for an explanatory memorandum. I do not know if there was one, but I could not find one in the Printed Paper Office. All there was was the draft regulatory impact assessment of the family law proposals of March 2000, which, I imagine, predated the funding code. I would be grateful if, in future, if the department is going to send me a copy of the funding code, it would also send an explanatory memorandum that puts it in simple terms and makes it easier for me to follow what is going on. I do not have any further questions to put to the Minister, but he will, no doubt, be prepared to respond to that point and to any questions that are put to him.

Photo of Lord Thomas of Gresford Lord Thomas of Gresford Spokesperson in the Lords (Shadow Attorney General), Home Affairs

My Lords, I, too, am grateful to the Minister for his exposition of the position. The Legal Aid and Advice Act of 1949, following the Rushcliffe review in 1945, proceeded on the basis that there would be equality of access to justice and that the right to representation is fundamental to a just society. It was thought to be, and rightly, one of the parts of the programme of the Attlee Government that introduced the welfare state; had there been more Members of the Government's party here tonight, no doubt they would agree. It was decided at that time that there would not be a government service of salaried lawyers, which is one way of dealing with representation, but that rights were best secured by solicitors and barristers working in private practice but funded by the state.

I reserve my comments on the Carter review and the means of funding legal aid in civil proceedings, which, as the noble Lord said, has long been the subject of debate and disputation. The noble Lord referred to the legal aid reform scheme—which is actually the "less fees for lawyers" scheme, a populist measure which the Government are pursuing. Suffice it to say that the Government always approach the legal profession as if it is a single, grand monopoly that can be broken up only by intense competition. In fact it is a highly competitive profession, both at the level of the high street solicitor and at the Bar.

UKHL 68—concerned with whether residential assessments in care proceedings under the Children Act 1989 which fell within the provisions of Section 38(6) should therefore be funded by legal aid. Very briefly, the facts of the case are as follows.

A child, E, was born in May 2003. The second child of that family, R, had died of non-accidental injuries, and the eldest chid, J, was already in care with grandparents. The local authority therefore sought to remove the newborn baby from her mother's care. She was eventually admitted to the Cassel Hospital at the age of seven weeks, along with her parents. Assessment in the community of the mother's ability to look after the child was regarded as a risk which the local authority was unwilling to take. Eventually the child and the parents received in-patient therapy for nine and a half months at a cost of £200,000. At the end of that time, the treatment was, happily, completely successful. The mother retained the baby, and the eldest child, J, was returned to her. The question was, who was to pay? Kent County Council refused and said the court had no power to make it do so. The period had been extended to nine and half months because the county council had not provided any accommodation, but nevertheless it was not willing to pay. The Legal Services Commission made it clear that the council was not to make public funding available for therapy or treatment but only for assessment.

In the judgment, one of the noble and learned Lords said that, under the ECHR,

"There is no article 8 right to be made a better parent at public expense".

So the House of Lords Judicial Committee said that legal aid was confined to an assessment of the child and parents, the risks and so on, with a view to the court making a decision with a minimum of delay. That was all very sensible. Unfortunately, the Legal Services Commission has gone overboard and, as the noble Lord said, has banned funding altogether, even for the limited purposes referred to in the House of Lords judgment; namely, for making an assessment that is to go to the court to help determine where the child should end up.

Following that case residential assessments continued to be directed and paid for in legal aid. Indeed, in a later case—Re V—the court overturned a previous decision of the family proceedings court and held that legal aid would pay for assessments even though that work included treatment and therapy. That was the position in March 2007 when the Legal Services Commission produced its proposals. It said:

"Reliance on residential assessments and waiting lists for placements contribute to delay and increased costs in court proceedings. There is little evidence that these assessments add sufficient value to the legal process to justify the costs and delay. The outcome of many of these cases is that children are made the subject of care orders. It is not appropriate that the legal aid budget be used in this way".

So there was no legal aid for an assessment of any sort to assist the court.

The proposal was to remove residential assessments altogether. The noble Lord said that that was supported by a number of the respondents to the consultation. So it is, but you need to look at who those respondents are and why they support it. They are the Law Society, the Legal Aid Practitioners Group and the Association of Lawyers for Children. They told the whole story about why they supported the proposals to remove residential assessments from legal aid when they said:

"The transfer of payments for experts and residential assessments to other departments would free up resources which should now be 'ring fenced' for improvements in rates for family work".

Of course the lawyers support the removal of residential assessments and the costs, providing that the money is then spread out among the practitioners. Although I approve in a personal sense, from a political point of view that may not be the right way to go about things.

How much is involved? The right reverend Prelate the Bishop of Ripon and Leeds asked a Question on 11 June, and I am pleased to see the noble Lord, Lord Adonis, in his place, because he gave the Answer. The Question was:

"What was the average cost to the legal aid system of residential assessments in proceedings under Section 38 of the Children Act".—[Hansard, 11/6/07; col. WA 228.]

The noble Lord, Lord Adonis, said that he did not know. The Question was then repeated in another place on 9 July by Annette Brooke, the Liberal Democrat Member of Parliament for Mid Dorset and North Poole, who asked the Secretary of State for Justice how much we were talking about. The honourable Bridget Prentice said:

"Information on the cost to legal aid of residential assessments in care proceedings is not recorded centrally. Further work is being done to isolate these costs through a review of closed files at the moment".—[Hansard, Commons, 9/7/07; col. 1299W.]

The Government do not know how much we are talking about, and the provision has been brought forward without anyone having any idea of the cost.

Who is against the provision? The Magistrates Association—the people who make decisions on care proceedings. In the consultation process, the question was: do you agree that residential,

"assessments are outside the ambit of the legal aid budget as they are primarily about possible rehabilitation"?

It did not. It said:

"As long as the assessment is for the purpose of determining the ability of the parent to provide good enough parenting, and to establish the bond between parent and child, in a residential setting, at the time of the assessment, such assessments fall within the criteria of section 38(6) as assessments of the child.

For this reason it would seem to be more appropriate to restrict any residential part of the assessment of the parent to a length that gives sufficient time for the above factors to be determined. This would then satisfy the findings in Re G".

The magistrates said that the elements of the assessments that determine the ability of the parent to provide good enough parenting are justified, and were of the view that legal aid should pay for them, in accordance with the earlier decision of the Judicial Committee of the House of Lords.

The Family Justice Council, which is also concerned—not so much with how much lawyers get paid as with whether justice is done to families, and whether proper assessments are carried out so that the right decision is arrived at in care proceedings—said that it had,

"grave concerns regarding the proposed withdrawal from funding residential assessments which ... will jeopardise the appropriate funding of proceedings designed to protect some of the most vulnerable children in our society".

It felt that:

"All of the assessments proceeded within a 12-16 week timescale. None involved unnecessary or unreasonable delay ... All of the cases involved genuine assessment of the child with its parent/s ... All of the cases involved residential establishments where the costs were comparatively modest. One charged little more than the mother's state benefits ... Each of these cases represents a 'high risk' situation where a court would be unable to authorise assessment of the child placed with a parent without 24 hour monitoring ... All involved new born babies".

We are dealing with a family that is completely hopeless and possibly even dangerous, and a small baby that has just been born. Should it stay with those parents or should the court be able to see whether the child is safe in their hands? The council pointed out that the critical client in each case is not the parent, but the child. How is it to be brought up—in care from the day when it is born? Is it to be given the chance of a proper assessment that would enable the judge to come to a different view? The council urged,

"the Commission to respect its obligations to other agencies in the family justice system and its wider obligations to the administration of justice".

It also went on to give illustrations which, having regard to the time, I will not go into, of other cases where residential assessment had been critical in determining the future of that baby for the whole of its life.

We are considering a provision to produce these new rules; the aspect that I am talking about is tucked away at the very end of it. I am not here to oppose the rest of it; we cannot bring forward a prayer to annul it because of the procedures of this House. I hope that what I have said adequately underlines the point of my objection to the proposals and how I think that the removal of funding and the failure of local authorities to pick up the bill will lead to less judicially-considered decisions on the future care of children. The Government really ought to take that into consideration.

Photo of The Earl of Listowel The Earl of Listowel Crossbench 8:45 pm, 25th July 2007

My Lords, I feel privileged to follow the noble Lord, Lord Thomas of Gresford, who has so carefully and thoughtfully outlined the reasons why many of us are greatly concerned about what is proposed in the code. I, too, will concentrate on the elimination by this provision of legal aid funding for residential family assessment. I thank the noble Lord, Lord Hunt of Kings Heath, for drawing my attention to this provision yesterday. I would have given notice to the opposition Front Bench of my concerns, but having only learnt of this so recently I could not do so.

One recognises that the Government have had a difficult balancing act in bringing forward this provision and that they have not brought it forward lightly. The noble Lord, Lord Evans of Temple Guiting, explained the great process of deliberation that has taken place in this area, which also highlights the deep concern that many people have felt about these reforms and the need to get them right. Placements in a good-quality family residential institution are scarce, and waiting for a placement can cause delay, adding to costs and harming the child to some degree. The money used on those few children might be used for the benefit of many other children. However, Her Majesty's Government have recognised in their policy document on children in preparation for the Comprehensive Spending Review that both prevention and intensive intervention must receive adequate priority if the cycle of deprivation of too many of our families is to be broken. It is not a case of either/or; we must bite the bullet of the cost of such intensive interventions as residential family assessment if we are to be successful in the Government's aim to see that every child matters.

As the noble Lord, Lord Thomas, said, the Legal Services Commission appears to find little evidence of the value of family assessments. The response to consultation tends to suggest that such assessments should be funded elsewhere. As the noble Lord pointed out, legal aid practitioners have an interest in that point. They have a very real concern about the continued funding for their service. It worries me very much that many of them will choose not to continue in this work because of the payment that will be offered. That is understandable, but we need to bear in mind that they have an interest.

What evidence is there of the efficacy of such assessments? I can speak only of the Cassel Hospital in south-west London, which has been mentioned. It is recognised as a beacon hospital by the health service. It has produced a number of audits of its services, which point to successful outcomes for children. My noble and learned friend Lady Butler-Sloss, who has expressed her regret at being unable to speak in this debate due to a long-standing engagement, said of the Cassel: "It is a most wonderful place, giving the most disadvantaged mothers a chance to look after their children". We are talking about giving mothers the opportunity to keep their children. My noble and learned friend has been a long-term supporter of the Cassel and deeply regrets this legislation.

My noble friend Lord Adebowale, who is familiar with such residential services through his involvement with alcohol recovery projects for families, says that the Government are throwing out the baby with the bath water, and that in the case of these services expense is a reflection of quality. I am familiar with the Cassel, having visited it, entertained its nurses in your Lordships' House and been acquainted with two young men who benefited from residential treatment there.

Susan Kramer, a member of the other place, gave an example of its assessment of one mother and baby. She said:

"An 18-year-old mother had suffered extreme emotional and physical neglect at home, as is frequently a key factor in such cases. When she became pregnant, she hoped for something better for her child. Initially, she cared well for the baby, but as the baby grew more demanding, that care fluctuated and raised the concerns of the local authority.

Mother and baby were removed to a foster care placement, but the concerns continued unabated. There were scant local resources to provide support to the mother, who had never lived away from home. She became so distraught that she threw the child on the bed in despair. The result was a court attendance and an assessment at a specialist centre—the Cassell hospital ... There, the mother's difficult history of neglect and deprivation was gradually understood, explored and worked through, as was her wish to provide something different for her daughter. The history was so protracted as to warrant a specialist investigation. The child began to flourish, and the mother engaged well. At the end of the assessment, a recommendation for a move to treatment was made by the clinical staff ... In this case, the Cassell made the decision to fund the treatment for free. As a consequence, mother and daughter are now doing well. They have returned to the community and are out of the care system altogether. They have a positive future ahead of them".—[Hansard, Commons, 5/7/07; cols. 1166-67.]

At a seminar at the British Association for Adoption and Fostering earlier this year, I heard an eminent social work academic present the conclusions from her recent investigation of placements for vulnerable children across the world. One of her two principal findings was that the outcomes for children depend heavily on the quality of the initial assessment of the child. That quality determines where the child is placed and whether that child experiences a stable or an unstable childhood. It is of the greatest concern that this regulation denies these few most vulnerable children the quality of assessment that they need.

Who else will meet the cost? It seems most unlikely that health or local authorities will have the funds to do so. Perhaps the Minister can offer some comfort here. I understand that his colleague Ivan Lewis is looking at the specific matter of funding for the Cassel. Such high-quality residential services are expensive, as we have heard, although not as expensive as one might expect on some occasions. The cost of children experiencing instability throughout their childhoods, perhaps moving repeatedly from care to birth family and back again, and going on to offend and to become teenage parents whose children are in turn taken from them, is financially even higher. The cost in human suffering is immeasurable.

I praise the Government's intentions, but the unintended effect of this provision troubles me and many others. Given the concern, will the Minister consider an inquiry into the effect of this aspect of the code and the funding of residential family placements? I look forward to his response.

Photo of The Bishop of Worcester The Bishop of Worcester Bishop

My Lords, I shall be brief, following the expertise of the noble Earl. This is one of those occasions when I come near to despair at the way in which we do our sums. We well know the cost to the criminal justice system of the failure of early interventions. I would even suggest that there is a substantial cost to the legal aid system in the long term in the failure to get assessments right at this early point. It seems that we are confronted yet again with an inadequacy in the way in which we calculate costs and savings. If we could only look rather further ahead than we do, we might find that the funding that is being withdrawn would have been a very good investment even in the narrow area of legal aid, let alone in the human area of the care of children.

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Government Whip 9:00 pm, 25th July 2007

My Lords, I recognise the understandable concerns of the right reverend Prelate, but I hope that in the course of my brief speech I will be able to reassure him. I am grateful to noble Lords who have taken part in this short debate. I will attempt to answer all their questions and, if I miss any, I will arrange for letters to go out tomorrow.

The noble Lord, Lord Henley, asked whether there was an Explanatory Memorandum. My understanding is that it was laid before the House with the code. I will ask officials to investigate this with the Printed Paper Office and will write to the noble Lord. He also said that he is looking forward to debating the regulations on legal aid reform in due course. I am sorry to disappoint him, but on a point of clarification, the regulations which implement the new fee schemes are considered under the negative resolution procedure, as set out in the Access to Justice Act 1999. This has always been the case.

As well as making a very interesting commentary on the code, the noble Lord, Lord Thomas of Gresford, asked a number of questions. He asked whether the legal aid representative bodies supported the removal of residential assessments because that money will go to lawyers. We believe that the Legal Aid Fund must be focused on legal representation. However valuable these assessments may be, they are not legal expenses and it is therefore inappropriate for them to be funded in this way.

The noble Lord also asked how much legal aid is spent on residential assessments. I hope finally to be able to give him an answer that might partially satisfy him. Since 2005, the Legal Services Commission has been collecting information on residential assessments where it has received a request for prior authority from the solicitor to guarantee the expense. However, this is not a mandatory requirement, so the picture is incomplete. Based on the data collected, the LSC estimates that the cost to legal aid of residential assessments is at least £1 million a year. The LSC is undertaking a review of expert costs which include residential assessments in care proceedings. The review covers over 12,000 files where the bills were submitted between April and June 2007. The final figures are expected later this year and will be available to noble Lords.

The noble Lord also argued that removing residential assessments from the scope of the fund means that they will not be done and they are very valuable. It is only recently that these costs have fallen to the Legal Aid Fund, since the decision in a case in May 2005. This amendment restores the position to what it was prior to 2005.

The noble Earl, Lord Listowel, asked a number of questions which touched on some points raised by the noble Lord, Lord Thomas of Gresford. The Government recognise the importance of work that centres such as the Cassel hospitals do. Consultees told us that such assessments can be useful in appropriate cases. However, the view of the Legal Services Commission and legal aid experts such as the Legal Aid Practitioners Group and the Law Society is that, while these assessments may have therapeutic benefits and may provide protection for the child, they are not a form of legal representation and the costs should not fall to the limited Legal Aid Fund. It is simply not correct to interpret the Government's position as being that, because we argue that they should not fall to legal aid, we do not believe that they are important. It may reassure noble Lords to know that there is no question of legal aid being removed from community-based assessments, which will continue to be funded as they currently are.

Most noble Lords also asked if this change could deny children much needed assessment. I reassure them that the change that we are introducing will not mean that children are denied assessments. Local authorities have a duty to children in need under the Children Act 1989 and will commission as necessary any assessment that is needed in a residential unit because of child protection concerns. If a local authority does not undertake an assessment where one is necessary, the court can order a residential assessment where appropriate.

Noble Lords also asked who will pay for residential assessments if they are not paid through legal aid. This is not a new financial burden for local authorities, which have always paid for these assessments as part of their duty to protect children in need. Recently, however, as I have explained, these costs have increasingly fallen to the Legal Aid Fund. There must be legal aid to pay for legal representation for the vulnerable, and, I say again, residential assessments form no part of legal representation. Where rehabilitation with a family is possible following such an assessment, this may obviate the need for a care order and the costs arising from the local authority's continued involvement with the child.

I hope that I have answered most of the questions that have been asked. I confirm that my colleague Ivan Lewis is looking into the funding of the Cassel hospitals, which I hope reassures the noble Earl. I also hope that I have provided reassurance that children will not be adversely affected by this change.

On Question, Motion agreed to.