“As the Secretary of State announced yesterday, the Ministry of Justice has had to play its part in reducing the budget deficit. Economies have had to be made in every area of expenditure. In the last Parliament, spending on legal aid was reduced from £2.4 billion to £1.6 billion. Further changes to the legal aid system were due to be implemented in this Parliament, with a second reduction to litigation fees in July 2015.
At the time the fee reduction was proposed, the market was made up of around 1,600 legal aid firms. After careful negotiation, the then Justice Secretary decided to adopt a system of ‘dual contracting’ to drive greater efficiency and consolidation within the market. But over time, opposition to this model has increased. Solicitors’ firms feared that it would lead to a less competitive market; barristers that choice and quality would diminish. In addition, a process of natural consolidation was already taking place in the market.
Although we recognised these arguments, we also needed to deliver reductions in expenditure. Since July 2015, however, two significant developments have occurred. HM Treasury has given us a settlement which allows greater flexibility in the allocation of funds for legal aid, and it has become clear that there are real problems in pressing ahead. We currently face 99 legal challenges and a judicial review of the entire process. Litigation will be time-consuming and costly for all.
We have therefore decided not to go ahead with the introduction of the dual contracting. We have also decided to suspend the second fee cut for a period of 12 months. The Legal Aid Agency will extend current contracts to ensure continuing service until replacement contracts come into force. We will review progress on joint work with the profession to improve efficiency and quality, before returning to any decisions on the second fee reduction and market consolidation”.
My Lords, I start by thanking the Minister for repeating the Answer given in another place. I hope the Minister will acknowledge that, although the announcement made by the Lord Chancellor yesterday is of course welcome to criminal law practitioners and others, it represents something of a disaster for his department. It was not only Her Majesty’s Opposition who opposed the two-tier contracting scheme when it was first mooted, way back in 2013 by the coalition Government, but practitioners, experts and many others. We all pointed out that it could not work, that it would mean the closure of too many solicitors’ firms and that it would result, seriously, in legal deserts where those facing criminal charges would not always be able to find advice and representation. That is why we welcome the U-turn.
However, now the scheme has been abandoned, it leaves behind it enormous costs for the Government, for many solicitors’ firms—whether successful or unsuccessful in their tenders—and, of course, for those involved in the litigation. Just think of all those wasted hours worked by civil servants, solicitors’ firms and others—and all for what? What do Her Majesty’s Government intend should happen next? Sometimes in government it is right to say sorry. Does the Minister agree that this is one of those times?
A Government should always say sorry when they make a mistake. This is a response to a difficult situation which confronted the Government. As I indicated, contractions were taking place within the market. There has also, fortunately, been a drop in the crime rate generally, and the need for consolidation was overtly acknowledged by the Law Society. So these changes were not, as was suggested by the noble Lord, going wholly against the grain, true though it was that many objected to those changes.
It is easy to say that this was a disaster for the department, but the noble Lord is not himself unfamiliar with changes in policy. In 2009, as he may well remember, the Labour Government altered their approach to criminal legal aid. Governments of all colours will, from time to time, in reviewing these difficult situations and in trying to balance the need for access to justice and the need to control public expenditure, adjust their plans.
What we have done has been welcomed by the profession. We have considerable regard and respect for the profession, particularly those criminal legal aid solicitors who go to the police station at highly inconvenient hours and provide valuable assistance to their clients. The profession has welcomed the abandonment of dual contracting, the suspension of the second fee cut and the Government’s intention to work with the professions, as we have indicated, to try to ensure that changes that will have to be made in due course are made with maximum co-operation from both solicitors and barristers.
Although we have not yet calculated the overall cost, this will certainly have been expensive, which is of course a matter of regret. However, if it results in stabilisation of the legal profession and continued maintenance of high standards, then that is not a matter of regret. We will of course have to accept the characterisation of this as a U-turn. I am not sure that U-turns are always quite the disasters they are depicted as in the newspapers. If a responsible government department thinks again, that may be characterised as a U-turn or it may be considered an appropriate response to changed circumstances.
My Lords, whether we regard this as a U-turn, a breath of fresh air from a new Secretary of State or simply a dose of realism in the department, it is welcome. But does the Minister recognise that a number of factors were reducing the number of solicitors doing criminal work in most towns and many rural areas, and that he will still have to address the danger that no one will be available, particularly if there is more than one defendant? While he is looking at that, will he also look at the fact that, since the scope changes, the number of claims on the exceptional cases fund has been surprisingly small, perhaps because people have never consulted a solicitor in the first place? Does that not need looking at as well?
The noble Lord is right that whatever the change in policy, it is important that we are satisfied that there are firms of solicitors that can represent people in whatever part of the country they are needed. When the replacement contracts come to be considered, that is clearly one of the factors that will be taken into account. The noble Lord also asked about the scope of legal aid generally and the exceptional funding provisions. They have been the subject of litigation and further clarification. One of the difficulties was that the forms that had to be filled in were perhaps not as clear as they might be. There has been considerable improvement in that regard, and the percentage of cases where exceptional funding has been obtained as a result of an application has increased considerably.
As a Back-Bencher looking at the LASPO Bill as it went through, I found the provisions on exceptional funding somewhat opaque, referring, as they did, to the Human Rights Act and Article 6. It was not always easy to know quite what the coalition Government were driving at. I think there is increased clarification of that. There has been a decision, although it is subject to appeal, but the noble Lord is right to draw our attention to exceptional funding.
Does my noble friend accept that it is extremely refreshing and encouraging when a Secretary of State listens, not least to the voice of this House, and makes an adjustment and a change of policy? None of us should be churlish in welcoming this very real change. Not the least of its advantages is that it has produced a situation where we have a legal profession that is in tune with the Secretary of State and a Secretary of State who is in tune with legal profession.
I am grateful to my noble friend for that intervention. He is right that this House has always held the Ministry of Justice, in particular, to account with the galaxy of legal talent that is available around the Benches. I am certainly aware that any policy change is subject to great and close examination by all those here, not least this particular policy, which I have been asked about a number times in specific debates and in the course of Question and Answers. I reassure my noble friend and the House that the Secretary of State listens to what is said in this House and will continue to do so.
The amount of complacency about changes in legal aid is absolutely bewildering. I speak as somebody who, in earlier life, was much involved with criminal legal aid. At the moment, there will be immense difficulties in recruiting young solicitors to do this work. I hold the view that it is desperately unsatisfactory. I hope the Minister will not again get up and say that economies have to made in legal aid. The economies that have already been made are devastating.
There is no complacency on the part of this Government. This Government value the contribution that solicitors make to system as a whole, particularly those who work in criminal legal aid. The noble Lord is quite right: rates are not what they were and, as a profession, it has considerably fewer attractions than it once had. It is important that we continue to encourage able practitioners to go into areas where legal aid is the main source of funding. However, we have to bear in mind the interests of the taxpayer. We have constraints put on us by the Treasury. I particularly pay tribute to those who, despite the difficulties that are encountered, nevertheless pursue careers in this less profitable area of the profession. Our profession is often characterised as being full of ambulance chasers and fat-cat lawyers. These lawyers are very much not in that category.