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12 July 2007 : Column 499WH—continued
“would amount to serious misconduct and breach of contract by the firms, not to mention arguably amounting to a fraud of the
taxpayer. The firms are doing nothing of the sort. They are receiving a fixed fee for work they undertake in accordance with their contract, the same fixed fee as every other solicitor in an urban area outside London. They are not being paid specifically to attend Beverley, they are not paid for any cases they do not undertake and they are not failing to undertake any work they are contractually required to do.”
I also received correspondence from Bill Waddington, of Williamsons solicitors, who watched the debate on television in disbelief. Speaking of the Minister’s claim that the eight Hull firms had proposed to the Legal Services Commission that they be offered payment for travelling and waiting on top of the new revised fee—in essence, that they be paid twice over—he said
“I cannot imagine for one moment that this was a misunderstanding of the proposals that we put to the LSC”.
The firms had suggested that they revert instead to the old, lower fee, but that they be paid for waiting and travelling, because the inadequate administration in many courts often led to solicitors sitting around for many hours, and they could not afford to do that without at least being remunerated or having the system improved. Mr. Waddington went on to say that, unfortunately, he had come to the view that the then Minister’s statement was “deliberately misleading.” He said:
“what we in fact proposed in an attempt to resolve this issue pre-April 16th was that they should consider de-urbanising the rural area”,
which would take us back to the old way of doing things.
The previous Minister and, indeed, this Minister—as I understand it, we have one, indivisible Government—owe the eight Hull firms an apology. The then Minister attempted to tarnish their professional reputations and caused personal anguish to the individuals concerned. Those people are committed to the services that they provide in our community; they do not enter the profession to become rich and they are particularly proud of the work that they do. As one firm put it:
“Solicitors do not jettison clients that have sometimes been represented by their firm over many years without trepidation and crisis of conscience.”
These solicitors do not deserve to be smeared by a Minister who, as a member of the Bar, was used to far greater remuneration than they currently receive. The present Minister should recognise that, do the honourable thing and apologise on behalf of the previous Minister this afternoon. If she cannot find time to address my points in her remarks, I would ask her again for a written communication that I can share with my constituents to ensure that the injustice that occurred in this Chamber is put right.
3.14 pm
Dr. Alan Whitehead (Southampton, Test) (Lab): I hope that we can all agree about the statement right at the beginning of the Government’s response, where they say that the legal aid system is
“one of the proudest legacies of the progressive post-war Labour governments”.
There may be a few dissenting voices, but the legal aid system is indeed a great achievement, and the fact that further money has gone into it over recent years indicates the support that it receives.
However, it can also be generally agreed that the overall cost is increasing, and the question before us is how to ensure that the legal aid system offers fair representation across the country, regardless of whether the person seeking representation lives in a large town, a city or the countryside, and that representation is undertaken on a reasonable basis. When it is suggested that changes are made to the way in which the legal aid system works to address those issues, some people will resist those changes for reasons of self-interest.
The issue is, however, much larger than simply whether administrative changes can maintain the legal aid system in the way that I have described. The issue that took up a considerable part of the report on the implementation of the Carter review—the question that is at the heart of the proposed changes, whatever else may be contained in the detail—is the method by which any changes may be undertaken. Put simply, the chosen method is a best-value tendering system based on market principles. We have long experience of the process of best-value tendering—and of compulsory competitive tendering before that—particularly in local government services. It is not, therefore, a new concept, although as we know from experience, it does not always turn out to be quite what its proponents thought it was when they introduced it.
The Government response errs, however, on the side of suggesting that the principle of the tendering process itself—not any variation of the process based, among other things, on the many lessons that have been learned over the years as a result of the unfolding of the tendering process in various services—will solve a number of the problems. Indeed, the Government state:
“We agree that there may need to be different ways of creating a viable market in different parts of the country: different areas have different conditions...In urban areas where the balance between the number of firms and legal aid clients is strongest we might reasonably expect downward pressure on prices. In rural areas where supply is often weaker and clients are certainly more dispersed, a move to the market will reveal the lowest price at which a sustainable service can be secured.”
I read that extract twice, but I came to the conclusion on both occasions that it appears to say that, where there are few suppliers, the process will reveal the point at which the service will no longer be supplied. That, of course, will be the nub of the issue if this complex method of tendering becomes the chosen instrument by which to make changes and to ensure that supply exists across the country in the way that I have described.
There is not just a slight difference or a difference of emphasis, as has been suggested in the quotation I just gave, but an enormous difference between the process in large cities and towns and that which applies in smaller towns and rural areas particularly. There is a smaller number of suppliers, and in some instances just one or two even in quite large communities. We know that there is continuing movement away from the area, and evidence to the Committee indicated a reduction in the number of people who continue to be engaged in supplying legal aid services.
Mr. Drew:
Does my hon. Friend accept that there is another problem with the tendering process: one that relates to the subject of tenders? National Family
Mediation claims that its work saves money for the state and is much more successful than court processes in trying to deal with family break-up. It has told me that because mediation will now often be subject to court action—that being the way in which the tendering process will operate—its valuable work is being pushed to the margins. The mediation agency in Gloucestershire is considering closure. I am sure that other hon. Members have received similar information.
Dr. Whitehead: My hon. Friend illustrates that there are complications in the application of the tendering process to legal aid services—not just in the bidding process but in connection with a range of other factors such as mediation, advice from citizens advice bureaux, and similar areas. He underlines the point that I was about to make, which was that it is difficult to apply a relatively simple tendering idea to the complex issues before us.
The Committee heard evidence of the so-called “curse of the winner”, whereby tendering firms might, because of anxiety to remain in the frame, make a low bid at an early stage. Another way of putting it is contained in a book by the late Kieron Walsh entitled, “Public Services and Market Mechanisms: Competition, Contracting and the New Public Management”. In that book, he said:
“The fixed price contract is likely to have an effect on the way that the service is provided. If contractors cannot control the income they receive then they are likely to try to cut the costs of the work by reducing the quality or quantity of work done.”
That is just one example of why we do not need to look into a crystal ball to see the outcome of what is happening to tendering processes. The information is not new; we have it in a book—in that case, a book written in 1995.
The known outcomes of the tendering process mean that, as was the case historically, we must consider not just the question of the first tendering process but those that follow—the second, third and fourth rounds. The suggestion appears to be that, if prices increase as a result of the process, as they might well do in areas such as those that I have described that have only one or two suppliers, that might be seen as evidence of a cartel. That is not necessarily the case at all; it might simply be that there is not sufficient supply to accommodate a tendering process.
During the Committee’s deliberations, I asked one or two questions that were couched in terms of comparison with waste collection tendering processes. I subsequently received letters from several lawyers asking how I dared to compare them to bin men. It was not my intention to do so, but I did intend to draw some lessons from waste service tendering processes, among other things. One of the lessons is that, once second, third or fourth tendering process are reached, the tenderers that were previously knocked out cannot get back in. After a period, that results in the only remaining tenderers being those that have tendered already, because they are the only ones left in business. In those circumstances, the idea that the process will continually improve competition, drive down prices and lift the standard of services does not necessarily stand up.
That idea is based on classic tendering theory. As Kieron Walsh said, it is relatively simple to organise a
tendering process for rubbish collection, but it is much more complex to organise one for legal services. Among other things, and as has been mentioned, the tendering parties in a rubbish collection tender have to submit a tender in order to stay in the market. If local authorities or private companies do not tender for municipal waste collection, they are not in the waste collection business. That is not true of legal services; the firms will simply switch to some other legal service. The point about the planned tendering process is that it is leaky; firms leak out of the process and switch out of the area.
Mr. Graham Stuart: Does the hon. Gentleman agree that some processes are not suitable for tendering? In a commercial environment, businesses allow audit tenders because there are statutory auditing requirements, and the supplier will seek to fulfil those at the lowest cost. However, companies do not ask their lawyers for fixed advice tenders, because the amount of advice that they receive differs, and they want the best possible advice. Instead of adopting an appropriate process, we are trying to drive down costs in the same way as for bags of waste.
Mr. Eric Martlew (in the Chair): Order. Interventions should be short.
Dr. Whitehead: I agree with the hon. Gentleman. The tendering process is differentially appropriate to different services, and different kinds of tendering are appropriate to different services. I wish the party of which the hon. Gentleman is a member had said that a few years ago about other forms of tendering, but we shall let that pass.
3.27 pm
Sitting suspended for a Division in the House.
3.42 pm
Dr. Whitehead: I recognise that a number of other Members wish to contribute, so I shall be as brief as I can in drawing my remarks to a close. I draw the House’s attention to a fundamental assumption about what will happen after the first or second tendering round—Lord Carter himself, in evidence to the Committee, suggested that it would be the case. When asked what would happen about the maintenance of effective competition beyond the first bid round, he said that it would be
“very difficult...I think people will leave.”
“if people saw that there are weak suppliers in an area,”
they might “break away” or come in
“from other areas, which is probably more likely.”
It is a sort of “on your bike” theory of tendering. It is most unlikely to happen in this area of supply. That is why it would have been important to pilot the process in London, as was suggested, before undertaking the Carter review.
The Government’s response to the Select Committee report says:
“We propose to roll out best value tendering initially”.
That is a sort of suggestion of piloting, inasmuch as the Government recognise
“the need...for a dynamic information monitoring process in order to assess the state of the market.”
A roll-out is not the same as a pilot, nor will it enable the sort of lessons to be learned that I have suggested are needed.
I also note that the Government propose in their response to undertake consultation on the tendering processes that will be designed for the system. I hope, if piloting is not to occur, that the design of the tendering process will take into account the fact that inevitably, both the initial and subsequent rounds of tendering will have to be very different in some areas from others. I suggest that in some areas, the mechanism effectively would not be a tendering process. If the consultation leads to that conclusion, it will be a positive outcome.
Careful thought is needed about how the system will progress. As other hon. Members have suggested, the danger is that we might end up effectively destroying the very service of which I, as a Labour Member and supporter of this Government, have been so proud—a service introduced over many years to ensure that people receive the proper assistance in accessing justice.
3.45 pm
Mr. Geoffrey Cox (Torridge and West Devon) (Con): I draw attention to my entry in the Register of Members’ Interests. Some Members present will know that I am a practising member of the Bar, and that I practise in fields funded by legal aid. I have thought long and hard before rising to speak, and before attending this debate. I have attended none until this one, because it has been extremely difficult for me to see how I could make a speech to the House on a subject of such close financial interest and concern to me.
After careful reflection and consultation with many people in the profession whom I have known for many years, I have found that I am duty bound to speak on a subject of such grave concern not only to the legal profession of which I have long been a member but, I firmly and passionately believe, to the wider public interest, which is being defeated and damaged by the Government’s proposed measures.
The quality of justice and the judiciary in this country is one of the proudest assets of which we can boast. When I say “the quality of justice”, I refer to all those involved in the administration of justice in this country. We sometimes forget that when we speak of the administration of justice, we are talking not only of those who dispense justice from the bench, the magistrates courts, the Crown courts, the High Courts and the county courts right up to the House of Lords itself. Critically, we are also talking of those who assist the administration of justice in an essential way—those who represent people before the courts, whether they be solicitors or members of the Bar. It is upon their integrity, competence and willingness to commit themselves to their clients’ cause—their decision to go that extra mile to discern whether the interests of justice help their client and to discover a particular way to assist them—that the administration of justice integrally and importantly depends.
All members of the justice system administered in this country should do their job with the maximum vigour. Only that guarantees the system’s success. During the 25 years for which I have practised, I have seen the most breathtaking commitment. People not remunerated at all well have given their time—frequently knowing that they will not be paid for it, or certainly not paid at any commercial rate—trying, at 9 o’clock in the evening, to find a bail hostel for a drug addict; trying to find a probation officer to give their client a chance and to look into his case; trying to find a way to help their client in a criminal legal aid case to avoid the spiral of imprisonment and continuing drug addiction.
I have seen such things personally. I have seen how solicitors paid on legal aid contribute every day with their effort, energy and dedication to the administration of our justice system. We should be proud of that system, and we should be proud of them. Their remuneration does not make them fat cats, although I suspect that many people regard them as such, and I often wonder whether this Government do too.
I say more in sorrow than in anger that I cannot help feeling that some of the measures shortly to be put before the House are driven by what we have seen from this Government in recent years: a regrettable tendency to denigrate those who practise in the criminal justice system. I do not mean only judges, although it is true that the Executive have repeatedly denigrated them. All sorts of extraordinary remarks have been made not only about judges, but about other practitioners in the field. I seem to recall that a former Home Secretary of this Government referred two or three years ago to “bent briefs” who tried too hard for their clients. I am not sure that the two are necessarily related. However, that kind of remark and that kind of atmosphere seem to be driving what is almost contempt for those involved in legal aid and the legal profession—particularly those engaged in representing people in the criminal courts.
The measures will lead to a brutal degradation of legal services. Some 600 to 1,100 firms will close or merge. Black and minority ethnic solicitors will be particularly affected, as will rural firms in constituencies such as mine. The plight of those firms is the burden of my short speech.
From time to time in my surgeries, I see people at their wits’ end, unable to get help with legal problems that are desperately and obviously important to them; other hon. Members must have similar experiences. For example, I have seen a lady with learning disabilities, who was married to a violent husband, and a man whose stepmother had left a disputed will, the money from which would have set him up and enabled him to escape poverty. There are so many ways in which legal problems can go to the root of somebody’s life. Unless such people can easily get advice and help, the problem of going to the law to tackle the issue that stands in their way can often be insurmountable.
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