Justice Committee - Minutes of EvidenceHC 378-ii

Oral Evidence

Taken before the Justice Committee

on Monday 13 December 2010

Members present:

Sir Alan Beith (in the Chair)

Mr Robert Buckland

Ben Gummer

Claire Perry

Elizabeth Truss

Karl Turner

________________

Examination of Witnesses

Witnesses: Sir Suma Chakrabarti KCB, Permanent Secretary, Helen Edwards CBE, Director General, Justice Policy Group, and Ann Beasley CBE, Director General, Finance, Ministry of Justice, gave evidence.

Chair: Sir Suma, welcome back; Ms Edwards and Ms Beasley, welcome. We are very glad to have you with us. In our session in November, we went over some things in detail, and other things have happened since then, so we have quite a lot to ask you about. I will ask Claire Perry to begin.

Q68 Claire Perry: Thank you very much for joining us this afternoon. I want to start by probing a little the financial settlement and what it means for the Department. Clearly, you are being asked to make some quite substantial savings and tackle what is, I am pleased to say, perhaps one of the boldest policy agendas to be implemented by the Government. We are also concerned about staffing, financial skills and those issues. Perhaps I may start by asking: what are you going to do to achieve your financial settlement, and what does that mean for the numbers of staff you employ?

Sir Suma Chakrabarti: In terms of achieving the financial settlement, it is probably worth just setting that out a little because the profile in terms of what we have to do is quite interesting. Overall, if you compare this year’s baseline with 2014-15, it is a reduction of just over £2 billion in the budget of the Ministry. Particularly in terms of the resource element of that, which is the majority of it, the settlement came out as a straight line reduction, so it is £500 million off every year. That is not as front-loaded as some settlements, for example the Home Office, but it is pretty tough because we have to take immediate actions in the first two years before some of the legislation comes through that would help us.

Broadly, the components are: policy reform in two major areas which you know about, legal aid and sentencing-Helen can talk about those in more detail-and a very major reform in terms of efficiency savings. It is very radical indeed. Essentially, we are changing the way our business model operates. At the moment, we are in different silos, different arm’s length bodies having their own corporate service and so on. We will bring all of that together and develop a shared service approach to that. We already have a very good shared service model, which came out of the Prison Service. It won a European award and we are quite proud of it, but obviously it will move very fast down that route in the first two years. Those are the main components.

In terms of staffing impact, our modelling suggests that 15,000 posts would have to go over the four years. The modelling splits like this at the moment: about 10,000 would be in the Prison Service, not all of them frontline people-these are the total numbers; about 3,000 in courts and tribunals; and the remainder across headquarters and the rest of the arm’s length bodies, that is the Ministry. I don’t include probation staff in that because we are not their direct employers; they are employed by their trusts and so on, but once they have received their budgets I expect there will also be some reduction in probation staff. We don’t know the exact numbers yet; we will probably know that in January. That is the rough cut at the moment.

Q69 Claire Perry: Thank you for being so specific. Clearly, it is a reasonably large financial management task to make sure, first, that those cuts are made sensitively and, in particular, we don’t do what organisations often do, which is fire everybody else and maintain their own positions. Secondly, it is very welcome that the MoJ has improved its financial grip in recent years, but clearly it was an area of weakness for the Department.

Sir Suma Chakrabarti: Yes, it was.

Q70 Claire Perry: Referring to some of the NDPBs that you are bringing in house, many of us were absolutely appalled by the bonfire of taxpayers’ cash that has taken place in the Legal Services Commission in the last few years. There are many financial challenges to face. How confident are you that you have the grip, the metrics and transparency within the Department to make sure you are achieving these quite challenging financial targets?

Sir Suma Chakrabarti: I said to the PAC that if you wanted to compare where we are now with when I became Permanent Secretary of the Ministry in December 2007 and used the NAO’s own model, which is a maturity model that gives a score of up to 5, which is world class in financial management, I would have scored us at the beginning of 2008 as roughly about a 1.

Q71 Claire Perry: So would I.

Sir Suma Chakrabarti: At the end of last year we and the NAO scored ourselves jointly as 2. We have recently redone the scoring and we are at 3.6. Therefore, we are not a 5-I doubt that any public sector organisation is a 5-but clearly we are moving in the right direction. One thing we have done is upgrade the skills in financial management throughout the organisation. For starters, our finance function three years ago did not have quite so many qualified financial people in it. When I came into the Ministry, compared with my knowledge of previous organisations, I was quite struck by the way policy was often developed without thinking about the financial consequences. It was almost neglected, so finance was not a big player in many of the big decisions. That has now completely changed. This year, Ann having come in from one of the businesses, NOMS, has made a major difference. There is much greater unity between the business, if you like, and the corporate finance people. I think we have made some progress but we still have some way to go to be where I want us to be.

Q72 Claire Perry: If I may ask one more question and then allow colleagues to come in: you raise a very important point about the role of financial management which historically has been a data-collection and reporting exercise. Are you now telling the Committee that financial management is at the heart of your policy decision-making? The NAO criticised the whole public sector. The finance director is number two in the Department or at least a very senior member of the management team. You have those financial metrics; for example, you know how many full-time and part-staff you employ on a daily basis, which such data did not exist in many Departments until quite recently. You have those metrics at your fingertips.

Sir Suma Chakrabarti: Yes. Two years ago, to take that metric, we would not have been able to tell you and today we have that data all the time. Both financial and operational data is now joined up, which again was an issue in the past. For me, the Finance DG always has been extremely important for a number of reasons: she is my principal adviser on accounting officer issues but also in terms of just better financial management of the organisation. In the centre, we are definitely moving the right way. We have absolutely focused on three key areas, LSC, which you mentioned, the National Offender Management Service and the Courts and Tribunals Services, where most of the cash and most of the risk is, both financial and reputational, and we are getting far better at it. The weakest one was of course the Legal Services Commission. I think you had a recent hearing with Carolyn Downs. Why did we second her there? Because we were so concerned about what was happening there. This is quite an interesting issue about executive NDPBs and whether, frankly, Ministries have sufficient leverage. In my view they don’t. We had a session with Permanent Secretaries about this and what we might do because there is a looming issue here. As executive NDPBs become part of accounts of Ministries and so their accounts are reflected in our Ministries, we need more levers to make sure their performance is good enough.

Claire Perry: Absolutely.

Sir Suma Chakrabarti: In the case of the LSC it is 25% of our budget, so if it goes wrong there it throws everything out; it is very material. Therefore, there is a bit of a debate going on about how we might do that from now on. But I think the LSC issue is under much better control, and Ann can add to this. Ann has worked hard with Carolyn Downs. Carolyn Downs has hired as finance director someone who had helped to sort out the courts’ finances recently, so she has a much better team around her as well.

Q73 Chair: In managing redundancies, will there be a presumption that you would get rid of contract and agency workers first rather than create expensive redundancies amongst core staff?

Sir Suma Chakrabarti: Yes. We have been bearing down upon contractors, consultants and agency staff for a good couple of years, and obviously even more so since the election because the Government has been pushing very hard on that and there are controls around that. Ann has to prepare a submission every time we want to use contractors, consultants and so on, and that goes to the Secretary of State through me. We have a debate. Ann pushes back often on business groups’ ideas. Sometimes they feel they might need a consultant for something and we push back very hard on those things. Therefore, that is a first port of call. That is not to say there won’t be some specific areas of technical expertise that, frankly, we don’t have in the Ministry but we need in order to achieve the savings, so sometimes we do a value-for-money test as to whether it is a good thing to have a consultant for a short period, but generally our consultancy numbers are going down.

Chair: Mr Turner, do you want to come in at this point?

Q74 Karl Turner: Yes. Thank you very much, Chairman. You said in answer to questions that you expect 15,000 job losses. Does that not automatically suggest that a great number of those people will be very well skilled? How will you cope with the reorganisation if you are losing posts that are very skilled jobs?

Sir Suma Chakrabarti: This is an absolutely fundamental question. Particularly with this size of restructuring, as managers and senior managers we are worried whether we will lose the wrong people, if you like, in a sense partly because they reach an age when it may pay them to take a slightly earlier retirement. We have an agreement with the unions about the criteria to be used to offer voluntary terms. Frankly, we will not be offering voluntary terms to somebody who is key who might apply because that individual is so fundamental in providing a service, even with diminished resources. Therefore, skills, knowledge and experience are part of the three criteria we are using, and for us that is a fundamental point. Obviously, this goes all the way down through the organisations, but over the last few weeks we have been looking at the senior structure and positions-who is in them and so on-and have debated who the people we need to retain are, because even with diminished resources we want to provide the best possible service. The other side of this in terms of skills is that we also need a cadre of people who are good at leading and managing change. It may be that the same set of people can do both and that would be great, but sometimes different people are more change-oriented and are willing to try new ways of doing things which saves money but also provides a better service. That set of people has come forward particularly in the last 18 months or two years. We have been running a change programme for nearly two years now. They are called transformers and we have 1,500 of them in the Ministry signed up. It is quite important that those people, who are at all different grades in different parts of the country, play a very strong part in the change programme.

Q75 Karl Turner: In relation to the reduction in the admin budget, how much involvement was the Department able to have in that, or was it the Treasury that determined the reduction?

Sir Suma Chakrabarti: I will ask Ann to talk about the details. Obviously, there was some discussion with the Treasury, but the approach taken by the Cabinet was pretty much across Government.

Ann Beasley: That’s right. The requirement in terms of the submission for the Spending Review said we had to reduce our admin budget by at least a third. Therefore, we were required to submit proposals. But in any event we had done a lot of work around developing a new operating model for the Department, and we probably had more ambitious plans than that anyway because to live within a settlement that reduces our costs by roughly a quarter we had to operate the Department differently. Therefore, we were already on the case in looking at ways to run the business with less overhead in terms of corporate support and things like that.

Q76 Karl Turner: If I may make just a general point, Chairman; these cuts are huge. How confident are you that you can run the Department and continue to make it work with such massive cuts?

Sir Suma Chakrabarti: It just would not be true for anyone to sit here and say he is supremely confident that he can bring this off. I would not believe it and I do not ask you to do so. What perhaps gives us a bit more confidence than some others might have in this is that we have been planning for something like this since February 2009. If you go back to the Comprehensive Spending Review settlement of 2007, that imposed very large efficiency savings-over £1 billion-on the Department anyway.

Q77 Chair: But you had difficulty in delivering them.

Sir Suma Chakrabarti: We are going to deliver that. So we have a track record. But when we were delivering those savings, it became apparent to the new team who came in with me in 2008 and 2009 that our business model had to change quite fundamentally. It was quite obvious that the deficit was getting larger but also-this really matters for staff and all of us, I think-that the services could be more effective. Therefore, we had both an effectiveness and a cost agenda. We started Transforming Justice; the change came in in February 2009. It is now recognised by the Institute for Government as a bit of a benchmark programme. That had built in the policy changes and also the managerial delivery process changes that we have been describing. So we planned very well. That is not to say there is not risk still there; of course there is. On the policy side, what will the consultation bring? What will be the legislation when it gets to Parliament? How will that be debated? What will change? It is all predicated on behavioural change at the end of the day. Our models tell us what the behaviours are at the moment, but we don’t know for certain until we get there of course, so there is risk there. On the delivery process management side, we have to deliver good services while making major changes in personnel and structures and that is tough, but we are very firmly working on this case. Most of us spend most of our time on this. It is quite interesting to see how our time as senior officials has changed. Yes, we provide policy advice to Ministers, on which Helen leads, but I now probably spend less of my time involved in that sort of area and work much more on the delivery side with Ann and others on how we will bring this off or give ourselves the best chance to do so.

Chair: Elizabeth Truss is a new Member of the Committee. We welcome her today.

Q78 Elizabeth Truss: Thank you, Chairman. I want to follow on from the questions of my colleagues. What is the maximum number of layers between you and the most junior person in the Ministry of Justice, and what will it be after the proposed reorganisation?

Sir Suma Chakrabarti: I have not counted up all the layers-someone can do that while I am working this out-but basically what we are doing in two parts of the organisation particularly is taking out the regional tier, particularly in the National Offender Management Service. Quite a large regional tier grew up because that was the philosophy of the previous Government. That is being removed as part of the restructuring. In the Courts Service the regional tier is also being thinned out, but it can’t be taken out completely because circuits are judicially determined and we have to map to some extent on that. There is quite a lot of thinning out in that layer as well.

Q79 Elizabeth Truss: What would your estimate be of the number of layers at present?

Sir Suma Chakrabarti: I am being told it is eight or nine.

Ann Beasley: I would have said nine.

Q80 Elizabeth Truss: To what extent do you think that can be reduced in future? In a lot of private sector bodies, de-layering has been one way to deliver a more effective organisation, particularly given the modern technology that you plan to introduce.

Sir Suma Chakrabarti: In some areas, the number of tiers is already reduced. In policy you won’t have quite so many tiers, obviously, between me and the bottom. In delivery it is quite different. There will be eight or nine levels between me and a prison officer. Yes, I think to some extent it can be reduced. If you look at the history of the Civil Service generally but particularly the MoJ, some grades were collapsed towards the end of the last Government, quite helpfully. There are two other parts to this. As we restructure we will take out a number of senior posts. I had 13 Directors General, the next tier below me, at the end of last December. I am already down to eight, and I shall be down to four by the time we finish this whole process. That is a massive restructuring. That means the jobs below them will become more interesting in one sense but also more responsibility is being pushed down. The other part of it is that we are not a hierarchical organisation. These tiers may exist but I do not sit and go through submissions on a ladder of nine people before they get to me. We make judgments about what the top tier needs to see and, frankly, what we don’t need to see and where we just trust the right people to do the right thing.

Elizabeth Truss: Thank you; that is very helpful.

Chair: Do you want to carry on?

Q81 Elizabeth Truss: Yes. I will move on to section 2 on capital spending. I want to ask about how the assessment of which capital assets to dispose of had been made. Were the overall economics taken into account, for example, increased travel and staffing costs caused by disposing of particular capital assets? At which layer in the organisation of the Ministry of Justice was that analysis conducted and those decisions made? I refer to my colleague’s comment earlier that within some organisations people have a clear incentive to protect the area in which they might be working.

Sir Suma Chakrabarti: Again, Ann can go over the detail. Just to get it on the record, our capital bid was regarded by the Treasury as the best in Whitehall because it did do a lot of the proper economics around this. Following a report by this Committee, one of the things we did was to build up the whole analytical base in the Ministry, which in my view was weak before, so it was pretty well analysed and so on. No doubt some of the first ideas may well have come from local level, but the oversight of this was at more senior level. Take court closures. The announcement will be tomorrow and so you will see the results of that. The whole proposal around which courts should come forward was built up from local level and then at senior levels decisions were made using the criteria you’ve talked about such as travel time and others, to put forward the proposition. In the end, any local protectionism around particular things was always challenged through the process. Ann, do you want to add to that?

Ann Beasley: Our capital submission was based on future projects, in some cases new capacity and maintenance in others. That did look at the value-for-money or economic case for investing in particular assets on the basis of the return on capital employed. That was the actual submission we got for the capital going forward in terms of investing in the Estate, but the disposal programme will come out of the end result of the decisions we make about what capacity we need in the court or prison system. Therefore, once sentencing has delivered a reduction in the prison capacity we would need to look at which prisons would close and that would be on all sorts of criteria around the category of prisoners-male, female, young, whether or not they are high security or whatever-and the geographic spread. The closure then results from the end result of that as to where you need the capacity.

Q82 Elizabeth Truss: Is some reduction in prison numbers already built into the plan for the capital? You are saying essentially that you have done a zero-based assessment of what will be required and tried to move from the current Estate to what you think will be the future Estate. What is the implication if those numbers are not reduced or changed?

Ann Beasley: Our submission is based on the assumption that the sentencing reforms will deliver a reduction in the number of prisoners and that means we need less capacity than we will have. Therefore, we have assumed that we will have less capacity going forward in terms of savings that we made, because that will deliver part of the savings that Suma talked about.

Q83 Elizabeth Truss: What if that does not happen?

Ann Beasley: There are a number of different ways in which one could reduce the prison population. You would have to explore all the different options for doing that.

Sir Suma Chakrabarti: Let’s take prisoners as a good example and assume the Government doesn’t wish to go back to early release, which some previous Governments have had to do. It does not have all its sentencing reforms through or the sentencing reforms haven’t delivered all the behavioural changes we’ve hoped for, and there is a shortfall in terms of our savings. There are a couple of options left. One is to talk to the Treasury again and hope for some mercy. I wouldn’t hold my breath. The other option is the sort of thing that we as public servants and you as MPs wouldn’t like but would have to face up to, which is about changing outcomes and probably more prison crowding.

Q84 Chair: In the past this Committee has pointed out that prison places are treated as a free good within the system, whereas the alternatives are not. Therefore, it is simply assumed that if a prison sentence is given to someone a van will collect him and take him to prison, whereas the question must be asked: is there a suitable community penalty for this person available in the area? If there is, we will sentence him to that. There is a fundamental difference, isn’t there, in the way the system treats these two things?

Sir Suma Chakrabarti: Yes, and I suspect that some will respond to the Green Paper making exactly that point and Ministers will have to consider that. It is a point you have made before and I would not be surprised if it comes up again, frankly. But when you are cutting resource budgets by nearly 25%, plan Bs are not as obvious as they would be if you were cutting by 5% or 10%. It is not as if I can drag another saving off the shelf and say, "Well, let’s substitute that for that." If this package does not go through in quite the way we envisage, we are into quite difficult territory not only in terms of further job losses but also in terms of outcomes and so on. Ministers understand that; it is not just me saying this. I think everyone understands it.

Q85 Elizabeth Truss: To move slightly away from the topic of capital spending, in terms of efficiencies in managing the court process and getting people through the system better, how much saving do you expect that to deliver? How is that being driven? You talked about reducing silos within the MoJ, but how is that process being redesigned, because clearly that is a huge area of cost at the minute?

Sir Suma Chakrabarti: Absolutely. I will ask Helen to talk about that because that is very important. In terms of the Spending Review settlement we did factor in an amount for efficiencies in the criminal justice system. They are not enormous. Nevertheless, my view is that over time they could build up. We have said to Ministers that we need a new strategy on efficiencies in the criminal justice system. I am struck by some extraordinary inefficiencies in the system. If you look at our courts, something like 56% of cases are either cracked or ineffective. In magistrates’ courts I believe 57% are due to late guilty pleas, and it is 64% in the Crown Courts. Obviously, one of the things we need to tackle is late guilty pleas and change in sentence. That is part of the reform process. There are 70 steps between the CPS and police before you can decide to go with a burglary charge. It is just astonishing. There are lots of things that need to be changed. The problem is that for good reason there is separation of powers in the criminal justice system but for bad reasons that means mutual accountability is quite weak, and that’s the thing we have got to tackle. Helen, do you want to add to that?

Helen Edwards: We are working with our colleagues in the Crown Prosecution Service and Home Office to put together a strategy which will drive efficiency through the system. The first object of that is simply to allow all three Departments to live within the Spending Review settlement we have without service levels going down. The second aim is to try to be more ambitious and deal with some of the things that Suma talked about. We think there is scope around things like case management and case progression through the system, but it will require quite a high degree of cooperation. We are looking at the governance arrangements we can put in place to drive that.

Chair: Mr Gummer has a supplementary point.

Q86 Ben Gummer: On the issue of capital spend on prisons, before the election both parliamentary parties to the coalition had plans of greater or lesser ambition to sell off various parts of the Prison Estate and using the capital receipts to rebuild. I note that much of that has been put aside now that the property market is not so benign, but I wonder whether there is a plan B in the background in the event of a recovery in the property market which would allow such a plan.

Sir Suma Chakrabarti: Asset sales are baked into the settlement. I think that £300 million is written into the settlement for asset sales from both courts and prisons. The timing in terms of market is obviously quite important. We have a deal with the Treasury as part of the settlement that we can keep up to 120%. The £300 million is 120% of the actual sales, so we can keep all of that if we sell the assets. Obviously, we will have to see what the property market does. The phasing of our settlement is such that we need to get a move on with some of these sales; we can’t hang around for ever because we need to make savings early on.

Q87 Ben Gummer: I think I am right in saying that a relatively small proportion of that £300 million is in the Prison Estate or is most of that coming from the court side?

Sir Suma Chakrabarti: I can’t remember the proportion.

Ann Beasley: I don’t know what the actual proportion is, but there would be a reasonable proportion of that in the Prison Estate.

Q88 Ben Gummer: It would be useful to know at some point how many prisons that involves and how much larger that programme could become if the market changed.

Sir Suma Chakrabarti: How many prisons will be an interesting question. We can tell you at the moment the number of places that we think we won’t need compared with where we were before. Prisons come in different sizes, as you know, and all the factors Ann outlined in terms of geographical spread, managerial efficiencies and so on must be taken into account. Frankly, there is also a worry about risk. If we announce the whole programme up front and find that the policy side of it has not delivered what we need we will have linked ourselves to a programme that is not deliverable, so as we go forward Ministers may well want to think in terms of slices of which prisons. I think you can ask the Secretary of State about that on Wednesday, but that’s where he and I were this afternoon when we talked about it.

Q89 Chair: There are various areas in which you hope to achieve savings, for example, the merger of the Tribunals and Courts Service. Are you confident that the Tribunals Service can remain a less formal and less expensive system if it is merged with the Courts Service?

Sir Suma Chakrabarti: Yes, I think so. We are strong defenders in the Ministry of the way the Tribunals Service has developed and the informality has been part of that. There are some things I would like to import from the Tribunals Service to the more uniformed part of the courts, shall I say. For example, with appraisal, tribunal judiciary are appraised; the other judiciary are not yet appraised. That is not because they don’t want to be. The Lord Chief Justice is very keen on appraisal, but when it was trialled in the past it was quite expensive. But there are cheaper ways of doing it. I want to bring about that culture change as well. I would like to see it shift and so would he. But, yes, I am confident we can do that. What we don’t want is some sort of cultural apartheid. Basically, we want the best of both to infect each other, if you like-I am mixing my metaphors here-to get a really effective Tribunals and Courts Service.

Q90 Chair: Do you have a figure for what saving can be achieved by the merger?

Sir Suma Chakrabarti: Yes; it is about £30 million from April 2013, and that is achieved largely through reduced staffing levels and overheads.

Q91 Chair: You are trying to bear down on spending in the courts, but the courts have IT systems which have been widely criticised and are overdue for replacement. Conversely, the Department is asking what use there is in spending a lot of money on IT systems that don’t work in the end. Where are we on that?

Sir Suma Chakrabarti: I think our courts IT is in better shape than it was a couple of years ago. Ann, do you want to answer that?

Ann Beasley: I think the NAO did a report which said that certainly the Crown Court system, albeit very old, was in reasonable shape. One of the things we are investing in and for which we have capital for the future Spending Review is the basic platform. Quite often, the problems with the IT systems are not the software but the unreliability of the hardware on which it sits. We are continuing to invest to ensure that the hardware is the right spec to improve performance and things like that. We are also talking to some of our suppliers about ways in which to develop new case management systems. The old way was very much that the public sector paid for the development and then ran it, but quite a lot of our suppliers are interested in a model that they would develop and we would pay for it on a per usage basis. We are exploring those kinds of conversations with them at the moment.

Chair: Mr Gummer wants to turn to another area.

Q92 Ben Gummer: I turn to legal aid. It is notoriously difficult to control this line of expenditure. The Department has pledged to realise £350 million of savings by 2014-15. Is that a straight line reduction to that point? What is the profile of the reductions? What does it mean?

Sir Suma Chakrabarti: Of course, this is dependent on changing scope and eligibility, which requires legislation, so for that reason it is not a straight line. Most of the legal aid savings come in years three and four rather than one and two. Helen, do you want to say anything on that?

Helen Edwards: No, that’s true. Anything that is dependent on legislation will be back-loaded; and we are still consulting on the proposals.

Q93 Ben Gummer: In the interim will you maintain the existing controls and those introduced by previous Administrations?

Helen Edwards: Yes.

Q94 Ben Gummer: Are they sufficient?

Helen Edwards: The Legal Services Commission is constantly looking to try to improve its systems, as you will have heard when Carolyn Downs appeared before you. We have a whole programme of work to try to make sure we have in place the right controls and we recover money that we should recover and paying out only those moneys we should pay out. Obviously, that work continues until we bring in the major reform for which legislation is required.

Q95 Ben Gummer: As you say, bringing them in-house means that you have an additional interest in the accounts.

Sir Suma Chakrabarti: Yes.

Q96 Ben Gummer: They are unlikely to be qualified again, I think, for the next two years. Is that right? They are likely to be qualified rather than unqualified in the next two years. How does that help you?

Sir Suma Chakrabarti: Of course, I won’t enjoy having the MoJ accounts qualified if that is what happens, but the key thing was to try to sort out the LSC and get it in shape over a few years. I think it would be foolhardy for me to say it will be sorted out within another year because I think the mess was quite serious. We have sent in one of our best change managers. She turned round Shropshire council, so she has been sent in there for that reason. She has a track record in this. She is putting together a team that is helping to pull the LSC together, but it will take time. It is quite possible that the accounts for this year will be qualified. Whether the accounts for the following year will be qualified I don’t know, and, if they are, whether they are qualified to such an extent that they are material, because it has to reach a certain level before they hit our accounts overall. It will be a sad day to see our accounts qualified, but the key thing is to get the LSC into shape first. This is quite important because this did not come out in the session we had. We are already operating pretty much as if it was an agency. It is not an agency but we now have rules of engagement with the LSC’s senior team, with the chair and the commissioners, which means that it is a much more open book approach than in the past. It is done by consent, obviously, and that has helped our financial stewardship to work much closer together.

Q97 Ben Gummer: Within the modelling for the reduction of the legal aid budget again there are so many known unknowns, such as the effect of litigants in person and the changes to sentencing which you mentioned. It is difficult to know exactly what kind of effect they will have. How sure are you of the effect that these various factors will have as time rolls on? You are as aware as I am of the controversy it has created in the industry.

Sir Suma Chakrabarti: Yes. We have done a lot of serious work on modelling all this with lots of sensitivity testing as well. Helen can talk about that.

Helen Edwards: We have done the best assessment that we can. For example, in respect of litigants in person our assessment at the moment is that there won’t be a big impact there. I think there was some research done in 2005 by what was then the Department for Constitutional Affairs. It showed that in practice there seemed to be very little difference in terms of the impact on court time. We recognise that that is now a bit old and we want to look at it again, but we have designed the reforms in a way that tries to take into account the complexity of the issues, whether certain kinds of cases we have looked at can be removed from the scope where people’s vulnerability might be greater. I think we have done as much as we can at this stage to take that into account. In terms of the other areas, for example, where we have looked to take things out of scope, we have looked at what we currently spend on those cases and have calculated what we would save if they were no longer in scope. We have put in a 10% downward optimism bias because there is always the danger that you overestimate. We have tried to calculate what the effect would be of excluded cases coming back in, if it was necessary to fund them to meet our national and international obligations. We have done quite a lot of calculation and estimation of the impact in respect of the different proposals. In respect of fees in civil and family cases, for example, we have modelled what a 10% reduction would be. We think we understand, as far as it is possible to estimate, what the impact of the changes would be, but obviously they are only estimates.

Q98 Ben Gummer: I speak as one of the few non-lawyers. The estimate for litigants in person goes against all the anecdotal evidence I have heard from people.

Helen Edwards: I realise that.

Q99 Ben Gummer: Finally, on the issue of removing legal aid from family law do you believe that you are cultivating the various tribunals mechanisms, or at least the mechanisms for dispute resolution, which are supposed to take its place? Is there work going on now to try to make sure those systems-mediation panels-are in place and ready?

Helen Edwards: Obviously, we are doing quite a bit of work looking at mediation. We have factored in some increased expenditure in that area. Again, we’ve tried to design this looking at where the alternative sources of both advice and information might be but also how mediation could be used. We have been looking at the success rates. I think that at the moment 65% of cases that are mediated are done so successfully. Obviously, we spent a good deal of time looking at what the impact of this would be. We have been quite clear in the consultation paper that although we have to save money-we have been explicit about that-there are examples of where, arguably, we have become quite litigious. It is not always clear to us that it is better that people should try to resolve their disputes through the law and the courts. Therefore, in some instances we think there are better ways, particularly in some of the family cases, where people can be helped to reach agreement in a less adversarial way.

Q100 Chair: But won’t some of these people arrive at the offices of the Citizens Advice Bureaux, neighbourhood law centres and other voluntary organisations, which hitherto have had contracts to provide legal advice to these people, with the expectation that they can get some kind of advice, perhaps not legal now, as to what the alternative options are and the organisation does not have any funds to provide that advice?

Helen Edwards: We are looking carefully at the advice sector, including Citizens Advice Bureaux, because, as you say, often what people need is not necessarily legal advice but timely and well-informed advice. If they get that advice, that might hopefully obviate the need for them to go on to get legal advice. We are looking carefully at the impact not just of our changes but other changes will have on the advice sector. The chief executive of CAB came to talk to us recently.

Chair: Elizabeth Truss has a quick point to make.

Q101 Elizabeth Truss: Thank you, Sir Alan. My understanding is that internationally the UK ranks very high in terms of its legal aid costs per head. Have you carried out any international analysis as to why that is? I understand, obviously, that other countries have different legal systems, but there are others with systems similar to the UK’s. Why are our costs higher, and in which areas are they particularly high?

Sir Suma Chakrabarti: Helen may want to give detail. The usual number that is put out is £38 per head for the legal aid system in England and Wales. It is one of the most expensive in the world, if not the most expensive. The gap between that and many other countries is vast, including countries with legal systems similar to ours. When I talk about this to a lot of people abroad-in Canada and other countries-we pay a lot to lawyers compared with what they would do in their countries. Therefore, fees are part of this. But part of the reform is about changing the way we do family law in particular. Other countries have moved down that route faster than we have so it is less an adversarial system and more into the mediation sort of world.

Q102 Chair: Rather than trading an anecdotal view about it, would it be a good idea if you wrote to us telling us what research information you have relied on or you think is out there? I don’t just mean work you have done yourselves but what external sources you have looked at.

Sir Suma Chakrabarti: We can certainly do that. During the development of the policy we did a piece of work on it.

Q103 Chair: A little more detail would be helpful.

Sir Suma Chakrabarti: Certainly.

Q104 Claire Perry: It would be interesting to know whether it is a value problem, i.e. we are paying too much for each individual case, or a volume problem. I think many of us would be inclined to help more people through legal aid. In particular, we have all received strong submissions from our local Citizens Advice Bureaux showing just how this helps. How can we attack this rather than restrict access? Is there a way to drive down the value per case, if you like? I would be particularly interested in your thoughts on that.

Sir Suma Chakrabarti: Yes.

Q105 Chair: My original query was simply what information you had that helped to explain this difference.

Helen Edwards: We will certainly let you have sight of the evidence we have. Taking our figure of £38 per head of population, the comparative figures are: £7 in Australia; £8 in Canada; and £8 in New Zealand. We have to be careful with these because it depends on how the costs are calculated and where they fall. I think we have to take those costs with a pinch of salt, but we can let you see how the costs look according to the evidence that we have.
The point about volumes and value is that in a sense we are trying to do both. We are taking cases out of scope and also trying to cut the cost of those cases. We referred earlier to early guilty pleas. For example, we are very keen to see how, where someone is going to plead guilty, we might incentivise that so they plead guilty earlier in the process. We think that is right for cost and for victims and witnesses. We are doing that through both the legal aid and sentencing reforms.

Q106 Mr Buckland: Before I ask a question on legal aid, I have been in receipt of criminal legal aid in the past; I am still being paid for cases that I have done, historically. Whilst I am interested in the cost per head, is it not right that in the field of criminal legal aid, for example, that a substantial proportion of the amount spent is spent in only a couple of large cases as opposed to the myriad of different cases that are dealt with in the magistrates’ courts and the Crown Courts? I am talking about the very high-cost cases that eat up a huge amount of the budget.

Sir Suma Chakrabarti: It is more than a couple of cases, but your basic point is correct, in my view. The Chairman is right; it is anecdotal. Well, it is not anecdotal because I have been given the figures by several courts when I have visited them. I have been struck by those very high-cost cases. Even the judges are struck by the process by which they are done which drives up the cost. There does not seem to be an incentive in the system to bear down on the costs anywhere other than a judge acting very ferociously, if you like. I think there is an issue in that area of costs. Do you want the figures?

Ann Beasley: Of the approximately £1.2 billion that we spend on the crime legal aid fund, £100 million is spent on very high-cost cases.

Q107 Mr Buckland: That is a substantial amount bearing in mind the percentage they actually occupy. Thank you very much. Perhaps I should move on to what we call the rehabilitation revolution, the Green Paper and the welcome announcements we see within that. But I just want to ask you some questions about what I call the cost comparisons that can be made between terms of imprisonment, for example, and other types of sentence. The Green Paper makes interesting and thought-provoking reading, but I am interested to know what work has gone into modelling some of the alternatives to custody. If you remember, this Committee’s predecessor made a constructive suggestion in its report on justice reinvestment. It talked about the different streams of funding that are relevant here: for example, health. I can think of the mental health diversion proposals, which are very welcome but they will depend on health funding, education, and social welfare. All these funding streams have an impact on how we deliver sentences and justice. I welcome your impetus to what modelling has been done in order for a proper comparison to be made between the cost of a prison term and an alternative.

Sir Suma Chakrabarti: This is a really fundamental question. When the Committee produced its report on justice reinvestment we were working on exactly the same thing, so it was a welcome recommendation. We have used that recommendation to put a lot of work into this area. If you look at the evidence which accompanied the Green Paper it is set out in some detail. It is more than for anoraks, but it has a lot of stuff on exactly that kind of model and the various impacts. Helen, do you want to give a couple of examples on how we factor that in? Health is an interesting one.

Helen Edwards: It was part of the negotiations through the Spending Review that we should look at the role of health in funding some of the diversion schemes that we need both at police stations and court. We got agreement to that. Health is now committed to rolling out diversion schemes by 2014 which will give us the coverage we need to make sure the health services are there when we do divert people, so that has been a very important development for us. We hope we can get a better response now to many of the people who come into the system with mental health problems. Similarly, we have been working with other Departments, too. The Department for Work and Pensions is very relevant here because trying to find a job is a really important part of reducing reoffending. Therefore, in terms of the payment by results schemes that we run, we are trying to work with that Department through its work programme to get to a system whereby, if the people who provide services to the DWP also reduce reoffending, they get recognition for that in the payments system. I think we have a much better understanding with the key Departments that matter that what they do and what they spend is very relevant to criminal justice and reducing reoffending.

Q108 Mr Buckland: It follows, does it not, that without that economic modelling it will be very difficult to work out how the system of payment by results will be measured? There must be a measure, must there not? I would be interested to know your thinking about how you are going to measure that so that we can make it a genuine system of payment by results.

Helen Edwards: We have had to do this work already because we have one payment by results pilot up and running at the moment in Peterborough. In order to reach agreement with the funders-it’s a social investment model-we have agreed the methodology whereby we will use the Police National Computer to assess levels of reoffending and reconviction. That will help us to determine whether or not we have the 10% improvement in reoffending rates that we are looking for, which would trigger the payment. That is a form of social reinvestment; it is built on that model. These investors are prepared to put their money in upfront and if they deliver the results, and provided we can have clear evidence that they have delivered those results, we will pay them for that.

Q109 Mr Buckland: Using the Police National Computer is a good start. Are you talking about reoffending within six months or 12 months? Is there any particular measure that you use?

Helen Edwards: We generally measure over 12 months; that is the standard rate of reoffending we use. We have done quite a bit of work to try to develop local measures of reoffending.

Q110 Mr Buckland: I was going to ask you about that. One of the recommendations in the predecessor Committee’s report on justice reinvestment was precisely that. There should be some data, not just data as to types of sentence but the cost of sentence at a local level, so that judges as well would become more informed and be part of the process. I would be interested to know whether you adopt that particular approach and what measures you are taking to implement that.

Helen Edwards: We will because we need it for payment by results, but it is part of our transparency agenda anyway whereby we and other Departments have committed to produce more information on things like cost so that people can judge in their area what we are spending our money on. We are not there yet, but we are working on it and are confident that we will be able to do that.

Q111 Mr Buckland: We have a very good start, haven’t we, with the cost of a prison term being about £41,000 a year for an adult? That is a good base point.

Helen Edwards: Yes.

Q112 Mr Buckland: Knowing the unit cost of a rehabilitation order, whether it is mental health-which at the moment is hardly used because we don’t have the provision, and that’s where the Department of Health will hopefully come in-or an unpaid work order is vital as part of this process, is it not?

Helen Edwards: Of course.

Sir Suma Chakrabarti: We could not agree more, and that is part of what we have been developing. Of course, everything is subject to cuts, but one of the things I want to try to protect relatively is the capacity to model these things, which we have built up so carefully over the last three years. It is quite fundamental to understanding whether or not we are achieving what we want to achieve and comparing different costs of different options and also trying to work out how, if you have an initiative in one part of the criminal justice system, that impacts on the rest of the system. Two years ago we ran an initiative on knife crime in London. I pick this as a real life example. Two years ago the police quite rationally pushed forward on that in London, but there was neither the mutual accountability nor the ability to tell how that would impact on the CPS, the Prison Service, courts and so on. We couldn’t have done that. We can do that now. The modelling has advanced quite a bit. We are trying to build health, DWP and others into those models.

Q113 Mr Buckland: We have talked about the measurements and methodology. I want to talk about timescales. When do you estimate that savings will be made from the implementation of payment by results?

Sir Suma Chakrabarti: We have six pilots. Obviously, the Peterborough pilot is going already and we also have the Diamond District Integrated Offender Management pilot.

Q114 Mr Buckland: Which we have seen.

Sir Suma Chakrabarti: And six pilots will be kicking off next summer.

Helen Edwards: We don’t expect to see huge savings in this Spending Review period. It will take a while and obviously you then have to measure the impact. Although we expect to see some savings in this period, as with a lot of our work around the rehabilitation revolution, we are investing for the future. We do expect to see significant savings. Over half of crime is committed by people who have already been through the criminal justice system. To make some inroad into the very high rates of reoffending-50% by adult prisoners and 75% by young prisoners-will take us some time, but it will be very well worth doing. We expect to make savings but not substantially in this Spending Review period.

Q115 Mr Buckland: While I have been focusing upon money, the point you make is that this is an important reform that is happening with or without a Spending Review.

Helen Edwards: Yes.

Q116 Mr Buckland: It is also about a change in philosophy. I am looking at reoffending.

Sir Suma Chakrabarti: Yes.

Helen Edwards: It is.

Q117 Mr Buckland: Focusing on that is the measure that matters. Would that be a fair analysis?

Sir Suma Chakrabarti: That is right. From the six pilots that might kick off next summer, we hope that within a couple of years, if they are successful, there will be some reductions in reoffending which will show up in both a cost forgone in our system, if you like, but also a reduction in the cost to the economy with less crime.

Q118 Mr Buckland: May I ask a specific question that relates to the big problem between different funding streams? It is prompted by my looking at the Winter Supplementary Estimates and the transfer of £9.5 million net to BIS relating to OLASS-the Offender Learning and Skills Service. For as long as I have been aware of it, I have been rather concerned about the fact that training in prison or young offender institutions has two streams-one from OLASS and one from NOMS. That has caused a lot of problems in terms of getting the provision right. I think we all acknowledge that there is a lot of work to be done yet. I would like to know how we resolve the problem of the two different streams and the lack of coordination that that can bring.

Sir Suma Chakrabarti: Both of my colleagues have been involved in this. Which one of you wants to take this?

Ann Beasley: Do you want me to have a go? We have largely moved away from having two separate streams. The transfer to BIS as part of the Winter Supplementary Estimates is to do with new capacity. We bid for the costs of education and training when we get the money for new capacity and we need to transfer it to BIS because they pay for it. A few years ago the money was Prison Service money, as was Health money, but after that it was transferred. Therefore, Health are responsible for paying for the health of prisoners; as for education, BIS are responsible for training prisoners. Therefore, we have moved away. Some of it comes back because in each prison there is a training adviser who is technically on the staff of the prison. Therefore, some money comes back from BIS to pay for that, but now the funding is all in the same place.

Q119 Mr Buckland: That is in BIS?

Ann Beasley: Yes.

Mr Buckland: Thank you for that.

Chair: Mr Gummer has a quick point on this.

Q120 Ben Gummer: Sir Suma, you brought up a fascinating point about the wider economic savings to be made from proper rehabilitation. The problem all along is that in many ways you have not been able to harvest that to your advantage. I wonder whether you have any kind of agreement with the Treasury whereby the savings realised by the Home Office or by local authorities’ housing departments-all the savings that come out of proper rehabilitation-are at least balanced against any marginal additional costs which you incur within MoJ.

Sir Suma Chakrabarti: The short answer to that is we don’t. We all know the costs to the economy of crime and so on. I think the NAO’s latest estimate is £9.5 billion to £13 billion. If these policies work, then obviously there will be a reduction in that cost, but there is not in the sense that that cost flows back to us in any way. Obviously, the Treasury has been quite helpful in terms of capital assets, as we talked about earlier, but not in terms of linking the economic cost reduction to our future spending settlements and how we might share that with other Departments. Interestingly, though, within our own settlement what we are doing is some revenue or benefit sharing. With two of the pilots we just talked about, one in Manchester and one in some London boroughs, if those pilots are successful in reducing reoffending, the revenue stream will be shared between ourselves and those boroughs. I think that is quite an interesting change of incentives. We are trying to put those incentives within our own boundary, if you like.

Q121 Ben Gummer: Now that you have a split Department, is that something you can agree with the Home Office? They can reduce their policing because you are putting fewer offenders back on the street.

Sir Suma Chakrabarti: We now have a joint Minister for Policing and Criminal Justice, Nick Herbert, so this is all signed up. In the next couple of days we are to have a meeting with the Home Secretary, the Attorney General and our Secretary of State on how to get more efficiencies out of the criminal justice system, because it really requires all three Ministries to work together properly. There should be a plan on that in the New Year.

Q122 Chair: Do Government Departments need a financial incentive to do the right thing? We tend to assume that the private sector does, but do Government Departments need a reward to be in the right form as opposed to a reward in heaven?

Sir Suma Chakrabarti: Given the way the pay freeze is going, a reward in heaven is probably the only thing we will ever get. It is a very striking dichotomy. Although we are not as individuals motivated as much by making huge amounts of money, however, with the way public spending negotiations have been conducted throughout my career, it is extraordinary how defensive people are about their own budget. They measure their success by this, not by whether they can do something in a shared way which delivers a greater public policy outcome. The great thing we, the Home Office and others have tried to do in the area of criminal justice in the last few years is to say that there are some shared outcomes here and sometimes financial incentives might help.

Q123 Chair: A serious follow-up to Mr Gummer’s question is whether in the absence of a return of money to the Department you will carry on doing the right things even though the benefit shows up on somebody else’s budget rather than yours.

Sir Suma Chakrabarti: The financial situation does push one or two things. If we take shared services, it is quite interesting that the Home Office is buying shared services from our facility. I think some of the Departments will coalesce over time in the shared service area because it is clearly a way to save money and put the money you have more into the front line.

Q124 Chair: We have been talking about prisons. I was wondering how on earth you expect to reduce the cost per capita from £41,000 to £25,000.

Sir Suma Chakrabarti: Fundamentally, we need to do something about the least cost-effective prisons. We have an extraordinary Estate, from castles to prisons that should have been hospitals, for example, in the case of Holloway. We have all sorts of expenditure profiles for all of this. Ann can go into great detail about this, but the costs vary between the most efficient and most inefficient.

Q125 Chair: It would be counter-productive if you achieved this reduction by reducing the quality of regimes so that they no longer rehabilitated. It is the sort of thing we have seen in recent years where levels of work in prisons have been inadequate and Friday locking-up has happened simply because of resource constraints.

Sir Suma Chakrabarti: Yes. I don’t think anyone would deny that it would be counter-productive if we pushed back on effective programmes. Of course, not all programmes are effective, so we need to work out which ones are the most effective. There is always an issue when you change programmes about focusing on the core things you need to do and getting rid of the non-core if they are less effective. That is one of the things our managers are doing.

Q126 Claire Perry: I want to raise a point on that, which goes back to the idea of pulling it in from various silos. I was always struck by how much money was spent on prisoner education; it is almost as much as we spend on a primary school child, yet there is almost no beneficial result in terms of reoffending, so perhaps it pulls money in. To get back to the whole idea of grip and outcomes, perhaps I may make a plea that in your corporate report you ask people whether they feel they are managing other people’s money effectively. I am always struck by how many questions are asked that have absolutely no relationship to either the outcome of the Department or the fact that we are all spending other people’s money. It would be great to see a realisation of your new focus on grip, which is very welcome, reflected right through the organisation.

Sir Suma Chakrabarti: I think that is a very helpful indication.

Q127 Chair: If I remember rightly, when you were in the Treasury you were one of the architects of Public Service Agreements. Now you are going to work to a different system of business plans which don’t necessarily make clear what the financial outcome is. You have milestones and actions which arise. Having devised the previous system, you must have thought there was some merit in it. Is this system to do either what Claire Perry has just suggested or more generally provide the focus that the Department needs?

Sir Suma Chakrabarti: I was wondering when my past might catch up with me. To say just a word on why we devised the system we did for comparison’s sake, at the heart of this people like me always worry about accountability more than anything else.

Chair: Good.

Sir Suma Chakrabarti: When I worked at the Treasury I felt, having worked previously in international development, that, frankly, the World Bank or IMF had better accountability than we did in the UK system. When you borrow money from the World Bank you have to produce an outcome. That was why I designed the PSA system around that. At the same time, there was also the Contract with America. Therefore, it was designed essentially around saying that as public servants you are trying to deliver certain outcomes for the money you are given by the taxpayer. One could make various criticisms of that: there were too many targets; there was also game-playing. Of course, all those things are there. The new system is also about accountability; it is just a different approach to it. I think it is quite an interesting approach. When one looks at the management literature on this, it is much more about transparency and trying to empower individual citizens and groups to hold officials and Ministers to account by having information which they can then manipulate and match up in the way they want to try to do that. Interestingly, Helen and I saw this a couple of years ago in the States in relation to crime mapping.

Q128 Chair: We talked about that in our report.

Sir Suma Chakrabarti: Yes. Civil society essentially has done that. In my view there is something in it in terms of empowering civil society to try to hold public officials to account by providing more information than we’ve done in the past. Openness is a good thing and particularly in our area I think it’s a very good thing.

Q129 Chair: Lastly, let us look at your arm’s length bodies. We have talked a bit about taking the LSC in-house. Is the taking in of arm’s length bodies as a whole, and indeed the removal of some of them, a very significant saving?

Sir Suma Chakrabarti: No; I would not claim there will be huge savings from the arm’s length body exercise. There will be some. The biggest saving in the whole area, and Ann can add to this, is through what we call the operating model changes. By bringing the corporate functions of these arm’s length bodies and the Ministry together into a shared service function, which will be for procurement, HR and finance, we make significant savings, and it is part of our efficiency agenda. But we would have done that whether the arm’s length bodies were or were not changing status. I don’t think we’ll make major savings by changing the arm’s length bodies. Obviously, we will get small savings from some of the changes but not major changes.

Q130 Chair: There must be some savings from the closure of bodies such as the Public Guardian Board, magistrates’ courts, Rule Committees and Courts Boards.

Sir Suma Chakrabarti: There are but they are not massive, not in the multi-million league. In some cases of course the costs are being transferred in. So, if you take the Youth Justice Board, yes, there will be some savings because there is probably some duplication, but we are still going to have to perform those functions; it is just that it is on this side rather than that side of the boundary. There won’t be massive savings from that change, for example.

Q131 Chair: I think the achievement of the Youth Justice Board rather commends itself to the Committee because they focused very clearly with Youth Offending Teams on achieving certain objectives. The inappropriate use of custody was very significantly reduced, as a result of which there have been closures and presumably savings, including the closure in my own constituency of a Young Offender Institution. Will that focus be maintained when it is within the Department?

Sir Suma Chakrabarti: Yes, it will. It will be in Helen’s area and will be a dedicated function within the Ministry of Justice, so you will be able to say that this is still the focus on youth justice. We do not plan to change the approach completely in that area or anything like that. I think it has been quite a success story. An NAO report came out at the end of last week which showed the relative success.

Q132 Chair: It’s successful, so why not keep it?

Sir Suma Chakrabarti: The three tests that the Government devised in opposition-the Tory Party devised these key tests-weren’t about whether an organisation was successful or unsuccessful in meeting its objectives. They were quite technical issues: does it perform a technical function? Should it be politically independent? Does it have to establish facts independently? Those are the three tests. Of course, on those three tests the YJB doesn’t need to be outside the boundary.

Q133 Chair: What strikes me is that, if you take the two areas where policy of the kind the Government is now trying to implement was pursued in relation to custody, they were youth justice and women. That is work still unfinished, but nevertheless significant progress was made in those areas when that kind of progress was not being made elsewhere. It seemed to me that a degree of focus had been achieved in different ways on these objectives.

Sir Suma Chakrabarti: Personally, I am very proud of what the Youth Justice Board, YOTs and others did. There was a 22% reduction in first-time entrants to the justice system. Once you are in the system it is more difficult to get you out, so don’t enter the system. That is a major success rate.

Chair: Absolutely.

Helen Edwards: I was interested that you picked out women because we drove that from within the Department. It had very clear ministerial oversight; it was very clear that it was a priority, and with colleagues in NOMS we took that agenda forward. It does not necessarily have to be outside Government for that to happen as long as you prioritise it as an area that is really important and has good ministerial oversight. Of course the YOTs are still there; they do the actual work. So our job will be to oversee the YOTs, disseminate good practice and look at commissioning for the Secure Estate. As you say, fortunately the number of young people requiring the Secure Estate is going down. Therefore, it is possible to do that both within the Department or outside it, but the real delivery is in local areas through the YOTs.

Q134 Mr Buckland: To ask about that very point, YOTs are not just creatures of the Ministry; they are collaborative teams working particularly with local authorities.

Helen Edwards: Absolutely.

Sir Suma Chakrabarti: They are accountable to them.

Q135 Mr Buckland: Absolutely. That is why they work so well. I would be grateful to know what your thoughts are about some of the excellent work that my local YOT does in Swindon on restorative justice. It is very interesting work which is victim-led and involves young offenders in confronting and facing up to the consequences of their actions with a huge success rate. I was there the other day and was told that nine out of 10 of the cases will involve some form of closure for the victim either by a handshake or even something warmer. I would be anxious to know your views not just about preserving the work of YOTs in restorative justice but enhancing that work, particularly bearing in mind what has been said in the Green Paper about restorative justice.

Helen Edwards: We want to build on the work that the YOTs have led, because it is only in the youth system that we have seen restorative approaches being taken forward. Like you, I have seen that work in action and it is incredibly powerful when it works. We do want to build on it and, ideally, we would like to see restorative justice play more of a part in the adult system. Of course, the challenge for us is that we do not have any new money to put to this, so we will have to build it in in such a way that if we are to use restorative justice it is instead of something else. In lots of cases you can use restorative justice outside the court system as a way of resolving cases and diverting people. We are also looking at whether we can use it more at the sentencing stage, as we do for young offenders via the referral order but not in the adult system. Yes, we would definitely like to do more.

Q136 Mr Buckland: Would you agree with me that it is important to preserve the principle that it must be led by the victim?

Helen Edwards: Yes.

Q137 Mr Buckland: I have heard discussion about it being a choice for the offender. That really isn’t the appropriate way forward here, is it, because it is part of the punishment?

Helen Edwards: I agree.

Q138 Mr Buckland: Part of the punishment is the offender facing up directly to the consequences of his or her action, which can mean a meeting with the victim, if the victim thinks it’s appropriate.

Sir Suma Chakrabarti: We agree.

Helen Edwards: Yes; it has to work for the victim. Where it is done properly, victim satisfaction rates are very high, but it must be done properly and the victim must want to be part of this process.

Chair: Thank you very much to the three of you. We are glad to have had you with us this afternoon. Good luck with achieving the objectives you have told us about.

Prepared 25th April 2012