Legal Aid Expenditure (Hansard, 20 February 1997)

§ The Lord Chancellor (Lord Mackay of Clashfern)
My Lords, last summer's White Paper, Striking the Balance, set out fundamental reforms that will allow us to control legal aid expenditure and ensure that the money spent is targeted on cost-effective services for the people in greatest need. In the meantime, the Government are doing all they can to control expenditure within the constraints of the present system.

§ Lord Boyd-Carpenter
My Lords, I thank my noble and learned friend for that reply. Is he aware that the old system under which counsel of fairly junior standing were employed in this work was a great deal cheaper to operate than the present system? What is the objection to reverting to that system?

§ The Lord Chancellor
My Lords, the precise arrangements for particular cases are very much a matter over which the court has control in relation to certification. The controls that we are able to apply under the present system relate to the fees charged and to examination of the financial position of those who may apply. We have made some progress in providing better mechanisms for testing that than were hitherto available.

§ Lord Williams of Mostyn
My Lords, does the noble and learned Lord the Lord Chancellor agree how pleasant it is to see the noble Lord, Lord Boyd-Carpenter, back in his usual place and undertaking his usual function of irritating the Government? He has not attended as regularly over the past few days as we have grown accustomed to note.
Is the noble and learned Lord able to confirm that for the past six years the audit certificate relating to the administration of the legal aid budget has been limited to a qualified certificate? Is that qualification in respect of millions of pounds or hundreds of millions of pounds of public money?

§ The Lord Chancellor
My Lords, first, perhaps I may join with the noble Lord in welcoming my noble 776 friend Lord Boyd-Carpenter. We are delighted to see him in his place. I do not of course agree that his principal function is to irritate the Government. Quite the opposite, I regard his Question as entirely in support of what I seek to achieve.
As regards the qualification of the legal aid accounts, the noble Lord, Lord Williams of Mostyn, is correct that the accounts have been qualified. The reason has been that the financial tests are applied by the justices' clerks and their staff in respect of the applications for criminal legal aid. Over the years the justices' clerks have not been able to show that those checks have been properly applied. We are trying to do everything we can to persuade them to do that properly. There has been a considerable improvement in the standard of checking. The only option available to me in this respect is to take the whole matter away from the courts altogether. That is not something that I am anxious to do because I believe that it will lead to further delay in the process of criminal justice. I would much prefer that the clerks were able to bring their checks up to the proper standard. As I say, in co-operation with them we have done all we can to encourage that, including trying to simplify the regulations.
The total sum involved is difficult to tell. One of the problems that the justices' clerks and their staff have is that it is highly probable that most of the people involved are qualified on financial grounds. It is the checking of that which requires to be done whatever one's prima facie view about the result of the check.
In respect of the last account the figure suggested by the National Audit Office that might be in question was of the order of £1.8 million. It is certainly not hundreds of millions or any of the other larger figures that the noble Lord, Lord Williams of Mostyn, mentioned.

§ Lord Clark of Kempston
My Lords, does my noble and learned friend agree that the amount of taxpayers' money going into legal aid is escalating tremendously? Are the terms of the Legal Aid Board—it is an independent body—sufficiently strict? Does my noble and learned friend also agree that if legal aid were extended to industrial tribunals and the borrowing requirement were to remain the same, in order to find the extra money for legal aid the Exchequer would require an increase in taxation or in the national insurance contribution at a cost to the British taxpayer?

§ The Lord Chancellor
My Lords, there is no question but that the budget for legal aid, the amount spent on legal aid, has risen substantially over the past few years. The problem is that the existing system which has been in operation for some time is in the nature of a demand-led system. Therefore it is extremely difficult to control the ultimate budget. The question of allowing representation of industrial tribunals under the present system would mean an add-on to the budget. I do not know any way in which that can be controlled properly. If the system were changed, the Government would have an option about the priority areas in which a given predetermined sum might be spent. That would enable the fund to be targeted on areas of greater need.
777 My noble friend will know that the Legal Aid Board is concerned primarily with the civil aspect. As I said earlier, the courts grant legal aid in respect of criminal matters. The terms of reference under which the Legal Aid Board operates are terms of primary legislation. That is one of the reasons why the White Paper, Striking the Balance, requires fairly fundamental proposals if we are to effect substantial change.

§ Earl Russell
My Lords, as the noble and learned Lord is doubtless aware, under Treasury guidelines Ministers may not attempt reductions in expenditure without first considering the resource implications for other departments. Will he give the House an assurance that, before any further reduction in legal aid, his department will observe that guideline? Will he tell us how it will set about doing so?

§ The Lord Chancellor
My Lords, it will be a unique experience for me if there is a reduction of any kind in legal aid. That is very difficult to achieve. It has certainly not happened yet. I hope that, if I am here sufficiently long, I shall have a chance to achieve just that. The effects that one department's arrangements have on others is a matter for departments to take into account. I believe that I am quite exemplary in trying to do that.