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Baroness Crawley: I cannot agree with Amendment No. 115 in the name of the noble Lord, Lord Kingsland. For the commission to operate effectively it is essential that it is able to assess the availability of resources and use those resources within the terms of the community legal service fund. After all, as we are constantly reminded by my noble and learned friend the Lord Chancellor, this is a properly controlled budget which must be administered in the context of the priorities set by my noble and learned friend. My noble and learned friend quite rightly reminds us that there is no longer a bottomless pit of resources within the terms of this Bill.

Lord Phillips of Sudbury: We on these Benches wish to associate ourselves with the amendment moved by the noble Lord, Lord Kingsland. Access to justice--as this Bill is entitled--will not prevail once the capped budget has been reached. Access to justice and equality before the law is one of the most basic and fundamental rights to which citizens of this country are entitled, and which they have claimed since the time of Magna Carta.

Like the noble Lord, Lord Kingsland, we too believe that the budget is not out of control. Last year and this year the legal aid system operated within budget. The number of cases covered rose by 3 per cent. Most important of all under this Bill the Government will take vast new powers, discretions and controls to ensure that what has prevailed without those extra powers over the past two years will prevail in future. Therefore the difference between us in terms of this amendment may be less than the previous speaker and the noble and learned Lord the Lord Chancellor have indicated.

As I said, with the new regime there is a degree of flexibility which the Government can control to some extent by means of the merits test and the means test. That is desirable from any point of view and most of all in terms of obtaining access to justice. The legal aid budget has never before been capped in this way. It is difficult to see the justification for doing so at a time when the legal complexities of life for the ordinary citizen and the importance of obtaining access to justice, have never been so great. That need will continue to increase. In our view it is not possible to justify this aspect of the Bill.

Baroness Thornton: I am puzzled about this matter. The figures appear to indicate that expenditure on legal aid has risen dramatically over the past few years and that it continues to rise at a rate well above inflation. That means that we have to set priorities in regard to this area of our public expenditure. Politics is about setting priorities. I do not see why this area of our public expenditure should not be subjected to the same conditions as other areas of our public expenditure. No one has said anything so far to convince me otherwise.

This legislation seeks to establish systems to ensure we obtain the best value from the resources which are available. The Bill seeks to build a modern legal edifice

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which will achieve several key objectives; namely, high quality legal services which are accessible to people when they need them most. The Bill seeks to achieve the most effective use of public funds to meet those objectives. A cornerstone of the Bill is the concept of the availability of resources and likely demand. The effect of the amendment would be to make the new structure lopsided, even if it did not make it fall over, as it were. Therefore I believe the amendment must be resisted.

The Lord Chancellor: The Prime Minister said again and again during the election campaign that schools and hospitals were our number one priority. He did not say that legal aid was our number one priority. I agree with the realism of the noble Baroness, Lady Crawley. With regard to all the competing claims on scarce resources, the Government are entitled to take a view as to how much they will spend on legal aid, and on what kinds of services they will expend those moneys. The average cost of cases has continued to outstrip inflation. In 1997-98 the average cost of a civil case was 12 per cent. higher than the previous year.

It is essential that under a controlled budget the funding code should reflect the availability of resources. Therefore I cannot accept the noble Lord's amendment. The main way that resources will affect the code will be through the priorities that I set for the deployment of resources. That will obviously be influenced by the amount of money that I can provide to the community legal service fund. I must repeat a simple truth that no noble Lord would or could gainsay in our discussions; namely, that what is available for civil legal aid is what is left over from the budget after the prior claims of criminal legal aid have been met. We can no longer operate in a world where the budget for funding civil legal aid is entirely open-ended and controlled by the lawyers and simply regulated by demand. That is simply not an appropriate way of spending taxpayers' money when there are so many other important calls on public expenditure.

Resources will not usually be taken directly into account in individual funding assessments as regards the merits of cases that should go forward. But they will be a factor in determining the toughness of the criteria at any particular time. For very expensive cases, which will be funded through a centrally held budget, resources will always be a factor, and they may be a factor in borderline cases, particularly if the commission is faced with unforeseen demand and needs to ensure that it can continue to meet the demand for funds that are judged to be required in priority areas. In fact unforeseen demand is not something that I expect to be a major problem. The combination of effective planning and the flexible allocation of resources to service providers through contracting should, with the ability to vary the criteria in the funding code, mean that we have an effective system for matching the available resources to the need for publicly funded legal services.

However, it is important here to stress this flexibility in the funding code. It has been designed to be able to take a variety of factors into account, with criteria varying with the priority accorded to the category of

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case. In some cases resources will be a major consideration, such as the high cost cases to which I have just referred. In others, such as cases about whether a child should be taken into care, they will not be considered at all.

I know that some people fear that the funding code will somehow or other be used covertly to achieve cuts in services and to lead to differing availability of services in different parts of the country. I shall take those two points in turn. First, there is nothing covert about the funding code. Quite the opposite is the case. For a start, a consultation document--to which I have already referred--outlining the code has just been published by the Legal Aid Board. People have until the end of April to make their views about it known. The code is very much more detailed and open about what is intended than before. For example, there is an entire chapter about resources issues. I have already indicated that I am prepared to consider making the important changes to the code in future subject to affirmative resolution by Parliament. Openness and accountability are central characteristics of the new code.

Secondly, the code is a national one. There is nothing in it which will discriminate between different areas or communities across the country. I refer your Lordships to paragraph 2.27 of the code. It is simply wrong to suggest that that kind of discrimination is possible. Of course the differing needs of areas and communities will be assessed by the commission under its duties in Clause 5(4) so as to assess the needs for particular kinds of services that specific areas most require. The allocation of contracts will take account of geographical variations in the need for services of particular kinds.

I understand the concerns that noble Lords may have about the consideration of resources in the funding code. I do not believe their concerns are well founded and I invite the noble Lord to withdraw his amendment.

6.30 p.m.

Lord Simon of Glaisdale: As I have intervened every time, until now, on matters on which I considered this Bill was open to criticism, it is only in justice to my noble and learned friend that I should say that I entirely agree with the way in which he has just put the case. We really cannot afford any open-ended financial commitment--not even for education, which I would certainly put first, or health. Our resources are not unlimited. If any fund is to be limited it has to have priorities within it, just as there must be priorities for the other major demands.

Still less are we entitled to regard any fund as open-ended if we are in a state where we are borrowing--not only borrowing at a particular moment but incurring debt over the whole economic cycle. What we would then be doing is asking those who come after us to pay for our satisfactions. To my mind, that is legitimate in education, which will inure to their benefit; it is extremely doubtful as to health and access to justice. Access to justice is not the same as access to the legal system.

It seems to me, even though we are disappointed in our particular predilection--even those of us who have chosen a life in the law because we believe it to be a

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life serving justice--that we have to accept that there, too, the funds are not unlimited and that therefore there must be priorities. As I said, I entirely agree with the way in which it was put by my noble and learned friend.

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