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House of Lords

Tuesday, 25 June 2013.

2.30 pm

Prayers—read by the Lord Bishop of Ripon and Leeds.

Sterling: Exchange Rate

Question

2.36 pm

Asked By Lord Empey

To ask Her Majesty’s Government what steps they are taking to bring about a lower exchange rate for sterling.

Lord Newby: My Lords, the UK does not have an exchange rate target. The Government’s macroeconomic framework includes an independent Monetary Policy Committee responsible for monetary policy that seeks to deliver price stability through an inflation target of 2% as measured by the 12-month increase in the consumer prices index. Under this framework the exchange rate is allowed to adjust flexibly.

Lord Empey: It is a great source of disappointment to me, and I am sure to many in your Lordships’ House, that the export-led recovery which we had all hoped for has not yet occurred. Does the Minister agree that while we take no action with our exchange rates and play by the Queensbury rules, our principal trading competitors in China and Japan are not so constrained as they deliberately manipulate the value of their currencies to the grave disadvantage of our exporters? Will he join with US President Obama, who in the past few weeks has expressed similar concerns?

Lord Newby: The UK exchange rate has fallen by about 20% since 2007. It was hoped that that would give a big stimulus to exports; it has given some, but not as much as we would have liked. On China, our trade to China over the past three years has increased by 76%. In April, for the first time, trade in goods to China reached £1 billion in a month. The access to China is proving rather better than the access to some other countries.

Lord Peston: I congratulate the noble Lord on his answer, which seems to me for once to be entirely right. The exchange rate did collapse but it had no noticeable effect on improving the balance of payments, as he said, because the supply side of our economy has not been able to respond. Apart from that—theoretically—we do not know whether it is the balance of payments that affects the exchange rate, the exchange rate that affects the balance of payments, or whether it is the two interacting. In other words, we do not know very much about this at all. A sensible Government will therefore concentrate on trying to improve the supply side of the economy and leave the exchange rate to go where it will.

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Lord Newby: My Lords, I agree with the noble Lord. I would just say, however, that we have been successful in reorienting trade towards the BRICS countries. China trade has increased by 76% while trade with Russia has increased by 71% and trade with other countries has increased by an almost similar amount. The problem we have been up against more than anything else is that the demand in our principal market area, the EU, has been very flat and declining. There has been a rebalancing of trade, and as the EU comes out of recession later in the year we hope that we will be able to pick up exports there as well.

Lord Taverne: My Lords, considering the massive devaluation of sterling since 2007 and the present state of our trade balance, is it not evident that devaluation is a tool of limited use in dealing with our economic problems?

Lord Newby: My Lords, it is a tool of limited use but that does not mean it is of no use at all. Obviously, you cannot have over a prolonged period all countries devaluing or competitive devaluation becomes a race to the bottom. The Governor of the Bank of England and the MPC would argue and have argued that without that devaluation our trade position would have been worse than it has been.

Lord Lea of Crondall: My Lords, is not the truth that the price devaluation of sterling can hardly be zero and that saying that price does not matter in export markets would make a nonsense of the whole argument about competitiveness? Would it not be more true to say—here I echo my noble friend Lord Peston—that when it comes to our manufacturing in particular exports, where the ratio of visible trade is 2:5 against us, we must have a policy on both sides? We must be competitive in price, which might require the pound to go down further, on that argument, but we must also give a massive shift of economic priority towards manufacturing as against the financial services industry.

Lord Newby: My Lords, the Government have been clear from the start that we want a shift away from financial services towards manufacturing. To a certain extent, that is happening. For example, we had an export surplus in cars last year for the first time in nearly 40 years.

Lord Forsyth of Drumlean: My Lords, does my noble friend not agree that the last thing we want is a further devaluation of sterling? Who is thinking about the interests of people who do the right thing and save, but who find that as a result of the programme of quantitative easing the returns on their savings are minimal? Pensioners who go for annuities are robbed blind because they get very little return on their savings. Surely the last thing we need is a weaker pound and the prospect of more inflation, which would hit people on fixed incomes.

Lord Newby: My Lords, the Government have no policy in terms of the exchange rate. Equally, the MPC does not target the exchange rate. However,

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the Governor of the Bank of England, before he retired in recent months, said on a number of occasions that he thought that the level of sterling is, in his view, now about right.

Lord Davies of Stamford: Is it not the case that under the brilliant economic management of this Government we have got the worst of all possible worlds? We have had a devaluation and the classic cost of that—an inflation rate which is about twice the eurozone average—but we have had none of the advantages: the balance of payments has got worse; the deficit has increased not fallen; growth has been imperceptible; we have the third lowest rate of capital investment in the EU; and under the most recent growth and employment figures, it appears that productivity is either static or declining.

Lord Newby: I do not agree with the noble Lord. The April trade figures show a deficit in goods and services of £2.6 billion, compared with a figure of £4.6 billion 12 months ago.

Lord Blackwell: My Lords, does my noble friend accept that, according to macroeconomic theory, one of the drivers of a trade deficit is a government deficit, because any public borrowing tends to be offset by savings from overseas savers? Would not those noble Lords who are concerned about the trade deficit, rather than trying to manipulate the exchange rate, be better off supporting the Government’s efforts to reduce the government borrowing level?

Lord Newby: My Lords, that is a very sensible point. I think that everybody is agreed that we need to do everything we can, as UKTI is, to promote exports, because growing exports means growing jobs, greater growth and a smaller deficit.

Small and Medium-Sized Enterprises: Funding

Question

2.43 pm

Asked By Lord Sharkey

To ask Her Majesty’s Government what assessment they have made of the success of their initiatives to increase funding to small and medium-sized enterprises.

Lord Popat: My Lords, the Government are helping more small and medium-sized businesses to access financial schemes including Funding for Lending, the enterprise finance guarantee and Enterprise Capital Funds. The enterprise finance guarantee scheme has enabled £1.2 billion of lending to 11,700 businesses, the Enterprise Capital Funds scheme has invested over £110 million in over 80 companies, and Funding for Lending has supported many more. The Government recognise that more can be done and are launching the business bank with £1 billion of new capital to bring the schemes together.

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Lord Sharkey: The fact is that net lending to SMEs is down again. That may not be surprising. Only a quarter of all SMEs are aware of the Funding for Lending scheme. The banks must know that you cannot sell a product if your customers do not know about it. Does not the figure of 25% of SMEs aware of the Funding for Lending scheme strongly suggest that the banks do not actually want to lend to SMEs?

Lord Popat: My Lords, the Government’s own research shows that awareness of the access to finance schemes has fallen in recent years. This is why we are launching a tailored marketing communication campaign to increase the awareness of many government access to finance schemes available to small and medium-sized businesses. This activity usually results in a highly successful brand. The launching of the business bank next year will solve part of that problem.

Lord Barnett: My Lords, has the Minister seen the recent survey by BDRC, which showed that only 23% of SME companies knew anything at all about the Government’s initiative? The survey also found that of SMEs applying for the first time, only 50% were accepted. Does he have some new initiative that might help?

Lord Popat: My Lords, my answer is no different from that to the previous question about awareness. Yes, we are doing everything possible through the Bank of England and the clearing banks to make their customers aware of the different schemes available to SMEs to borrow money through government incentives.

Baroness O’Cathain: My Lords, my noble friend Lord Sharkey is absolutely right: knowledge of the funding available does not seem to be percolating through. That is a real shame, because SMEs account for some 98% of all businesses in the UK and internal market. They also account for so much activity, and there could be a huge opportunity for growth and for employment, because if every SME in the UK, and where possible in the internal market, took on one extra employee, there would be no unemployment. The combination of getting the banks to let go of some funding for SMEs, plus trying to encourage more employment by the SMEs, could get us out of trouble very quickly.

Lord Popat: My Lords, since the banking crisis in 2008, the banks are a little risk averse. They do not want to have excessive lending. At the same time, the SMEs are risk averse too; 61% do not actually borrow money for their businesses, mainly because they have retained profits to run their business but quite often because they use their own capital. However, I agree with the noble Baroness that awareness is key. This is where we have partly failed, and we are taking steps to ensure awareness. Having said that, we launched the Funding for Lending scheme this time last year, and so far we have lent £16.5 billion through it. That is a pretty good record for the Government.

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Lord Mitchell: My Lords, we have already heard from noble Lords about the deplorable situation with respect to Funding for Lending. Loans in general to SMEs year on year are down by more than 3%, and Funding for Lending in the last quarter was down by £300 million. Billions of pounds are being drawn down by participating banks, but precious little is getting through to SMEs. It simply is not working. What we really need in this country is a fully fledged business investment bank with a strong regional presence. Does the Minister agree?

Lord Popat: My Lords, the Funding for Lending scheme is working. As I said, we have lent £16.5 billion in the past 12 months. We have also got other banks to join the scheme. Given time, it will prove to be successful. We have £80 billion allocated for that scheme. It is the best scheme available for SMEs. I also said that the banks are risk averse. They do not want to go through the crisis that they went through in 2008. SMEs are partly risk averse too. Not many SMEs are borrowing, which is why there is a little contraction in actual lending.

Lord Young of Graffham: My Lords, does the Minister not agree that the banks scored an own goal not after 2008 but over 20 years ago, when they took the managers out of the branches and that in fact there is nobody for the average SME to relate to but a relationship manager at the end of a telephone, whose only word is no? The real problem we have is to bring back a relationship between the banks and the small firms. The Government are trying to do that—we are introducing growth vouchers and a whole lot of other measures—but unfortunately it is the banks that have let them down rather than anything else.

Lord Popat: My noble friend makes a very important point and I agree with him. In fact, when I was at an SME 20 years ago I had direct contact with my branch manager, and it was the manager who did the lending. Now, most banks have corporate offices and half the decisions are made on their computers rather than by human brains. I agree with my noble friend, but the good news is that we have set up competition within the banking sector and that the new banks—Shawbrook, Aldermore, Metro and Cambridge & Counties—all have branches with branch managers now.

Lord Cotter: My Lords, this point may have been made already, but it is worth making again. Does the Minister not accept that many small businesses do not know how to get different sources of funding, as there are so many that are potentially available? Specifically, what is being done proactively to let businesses know what is available out there for them to tap into? I know from running my own small business that you have very little time indeed when you are running it and trying to survive in this day and age; you do not have time to do this work. Are local enterprise partnerships and others doing this to help?

Lord Popat: My Lords, we are launching a tailored marketing communication campaign to increase awareness of a number of government lending schemes available to SMEs.

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Mesothelioma Bill [HL]: Impact

Question

2.52 pm

Asked by Lord Wills

To ask Her Majesty’s Government what assessment they have made of the impact on insurance companies’ balance sheets of paying mesothelioma sufferers 100 per cent of the compensation to which they are entitled under the terms of the scheme set out in the Mesothelioma Bill [HL].

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud): My Lords, over the first 10 years of the scheme, a tariff set at 100% of average civil compensation would total £451 million. That is £129 million more than the current proposals, which are forecast to cost £322 million.

Lord Wills: I thank the Minister for that Answer. Indeed, I thank him for all that he has done personally to advance the cause of all those suffering from this dreadful disease. However, does he recognise the deep frustration felt by many in your Lordships’ House, and many outside as well, that the Medical Research Council seems unable to launch fundamental research into this dreadful disease, even when the insurers are prepared to pay millions to fund it? Does he also recognise the deep sense of injustice felt by so many that the insurers are refusing to pay 100% of all claims to all those who are entitled to them?

Lord Freud: My Lords, the point about research is that it is pretty complicated, one reason being that the Medical Research Council is constrained by the quality of the research proposals presented to it. There is a bit of a chicken-and-egg situation going on, as I see it, and I am working with my noble friend Lord Howe and the British Lung Foundation to break that situation. We are hosting a seminar on the importance of mesothelioma research shortly to try to stimulate the proposals for funding. As for the second aspect of the question, clearly there has been much debate on the exact level of compensation. In the end, this has been a very complicated and intricate deal to make sure that we can get good sums of money. We are getting an average of £87,000 a head to people who suffer from this terrible disease who have not been able to find any compensation whatever.

Lord Wigley: My Lords, those who have suffered industrial lung diseases get the full level of compensation under the 1979 pneumoconiosis Act, when they cannot identify their former employers to sue them, so by virtue of what reasoning should there be a scaling down for those who suffer from mesothelioma and cannot identify their insurance policies? They suffer equally and have great need of those funds.

Lord Freud: My Lords, I know that everyone in this House would agree with the proposition that we want to get as much money as we possibly can to mesothelioma sufferers, particularly those who, through no fault of

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their own, have not been able to trace the insurer that should be paying them the employers’ liability compensation. The reality is that we cannot trace the insurer in roughly 10% of cases. We are trying to make sure that we trace as many as possible. They will get the full amount, and then get a payment—not quite as much as I would want, but a safe, sustainable payment, for this group of people, and that is a lot better than the nothing they are getting currently.

Lord German: My Lords, I congratulate the Minister on bringing the good insurance companies to provide compensation for this fatal industrial disease for those who are non-traceable or wayward in their insurance. Will my noble friend tell me what guarantees he has that the insurance companies will not simply pass on the costs to their customers in their bills? If he has no guarantee of that, it might well happen anyway. Surely it would be worth the little extra it would cost to bring that 70% closer to 100% in order to be able to give compensation and help to sufferers and their suffering families.

Lord Freud: My Lords, as my noble friend pointed out, this scheme is based on a levy on insurers who are active in the market today, not those who may have actually been responsible for the historic liability. It is very difficult to assess who takes the real burden of the cost. I have been very anxious to get to a position where I am as assured as I can be that the bulk of that cost is carried by the insurance industry, not by British industry as a whole. The risk is that if the levy is too high, the amount would have to be passed on by the industry.

The Lord Bishop of Ripon and Leeds: My Lords, not so long ago, I was at the bedside of one of our clergy who died of mesothelioma, having not been diagnosed until very late. Will the Minister tell us what part sufferers themselves, their relatives and support groups will play in managing what sometimes comes over as an agreement and arrangement between government and insurance agencies?

Lord Freud:Let me make it absolutely clear that we have been acting as the agents of the sufferers in our discussions with the insurance industry. The idea that there is some kind of cosy relationship between government and the insurance industry is absolutely not true. It has been a really tough business to get a deal through. I talk regularly to victims’ groups and lawyers. I get their support and as we develop the next stage, which is a practical process, I will be getting their views and having them very much in mind.

Lord Alton of Liverpool: Will the Minister confirm that with people dying of mesothelioma at a rate of 2,000 a year the Government have predicted a further 56,000 deaths over the next 30 years? Will he tell the House the total level of compensation that will have to be paid out during that period to meet those claims? Will he contrast that with the not a penny piece that is currently being spent on research into finding cures

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for mesothelioma? In that context, will he give further consideration to the letter sent to him by more than 20 Members of your Lordships’ House from all sides of the House asking for public and insurance industry money to be used in order to do more to find a cure for this terrible disease that will take a further 56,000 lives in the next 30 years?

Lord Freud: My Lords, that is precisely the point. This is a terrible disease. It is about to peak in the next couple of years. That is why I have been in such a hurry to provide a scheme for those who cannot get compensation. I cannot do the sums in my head, but the payments are clearly in the many hundreds of millions. We have had much discussion about the lack of research in this area compared with other cancers. It is something that I and my noble friend Lord Howe are concerned about. We are going to try to launch that. There are two aspects: whether the Medical Research Council will find it valuable to do the research, and the insurance industry, which has been providing the only substantial source of funding until now in this terrible area.


Armed Forces: Human Rights

Question

3 pm

Asked by Lord Craig of Radley

To ask Her Majesty’s Government what advice and directions are being given to Armed Forces personnel following the Supreme Court judgment on 19 June that human rights legislation, and in particular the right to life, may apply to Armed Forces personnel engaged in operations abroad.

The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever): My Lords, urgent cross-government discussions are taking place to consider our options. We will provide advice to members of the Armed Forces as soon as possible. The Government are concerned that the ruling creates uncertainty and will continue to defend their position against ill-founded legal claims, while continuing to provide our forces with the equipment they need, and ensuring that, where casualties occur, generous provision is made for troops and their families through the Armed Forces compensation scheme.

Lord Craig of Radley: I thank the noble Lord for that not very reassuring Answer. Can he advise on this situation? A commanding officer orders a soldier to take part in operations overseas against an armed enemy, so clearly there is a risk of injury or loss of life. Is that officer’s order lawful? If the soldier disobeys the order, is he liable to a charge and court martial under Section 12, possibly, of the Armed Forces Act because he did not go into the operation? Is the officer liable to be charged or found disciplined under the human rights legislation because the soldier followed his instructions but was killed in battle?

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Lord Astor of Hever: My Lords, I hope that I can give the noble and gallant Lord some reassurance on his questions. While the judgment will create uncertainties, we are determined that it will not undermine the authority of commanders in the field to give orders required in often fast-moving circumstances. I do not expect it to be open to a soldier facing a charge of failing to follow orders to argue that his human rights trumped those orders, nor do I believe that officers acting in good faith would ever face disciplinary action in the circumstances that the noble and gallant Lord has described.

Lord Rosser: My Lords, the ruling is that the families of the Armed Forces personnel concerned can take action against the Ministry of Defence, since the court ruled that the doctrine of combat immunity should be interpreted narrowly. The individual claims concerned will now return to the High Court and it remains to be seen what the exact outcome will be. While it is essential that the MoD and the Armed Forces have a duty of care to service personnel, the concerns that have been expressed by the Defence Secretary and senior military figures on the potential military implications of the ruling should give pause for thought. Can the Minister say whether any consideration is likely to be given by the Government to the legislative position in the light of the court ruling, and is he aware of any of our allies who are in a similar position to the one in which we now find ourselves?

Lord Astor of Hever: My Lords, as I said in my initial response, urgent discussions are taking place in the Ministry of Defence. We are meeting lawyers and trying to work out the best way forward for members of the Armed Forces. As regards our allies, we know that they are very interested in this issue and we will share the conclusions of our discussions with them as soon as possible.

Lord Palmer of Childs Hill: My Lords, lawyers representing relatives said that the ruling meant that the Ministry of Defence owed a duty of care properly to equip service men and women as they went to war. Will the Minister comment on whether this interim judgment creates a risk of making the MoD more cautious with its engagements and less effective in peacekeeping? Will the Minister also confirm that the MoD is aware of its responsibilities towards our service men and women to provide them with vehicles and equipment suitable to the areas of conflict?

Lord Astor of Hever: My Lords, with regard to making the MoD more cautious, looking around the House I can see noble Lords and noble and gallant Lords who, in their time, had to take very difficult operational decisions on land, at sea and in the air. I am sure that they would agree that we must ensure that commanders have the confidence to take decisions that often must be made in the heat of combat to obtain their objective with the least possible loss of life.

As for the equipment, the most important priority is the protection of our troops. Since this litigation started, the wide range of protective vehicles, including Mastiff, Ridgeback, Husky, Wolfhound, Jackal and

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Foxhound, have been available to commanders to match the most appropriate available vehicle to a specific task, based on the assessment of operational risk. Every effort is made to bring troops’ kit up to spec for the job they do and continuously to update it as technology advances.

Lord West of Spithead: My Lords, 31 years ago my ship was bombed and sunk close inshore in the Falkland Islands during the amphibious landings, and its AA weapons systems were totally inadequate in the position in which it was placed. I knew that, as the commanding officer, and my task group commander knew that, but it is the duty of military men to fight the war they are in with the equipment they have. It is clearly a total nonsense that one can use human rights legislation to go against that. Indeed, if we had not done that, we would not have won that war. Will the Minister not agree that it is totally bonkers to apply this sort of legislation to war?

Lord Astor of Hever: My Lords, the noble Lord rightly raises the issue that we are grappling with at the moment.

Mesothelioma Bill [HL]

Order of Consideration Motion

3.06 pm

Moved By Lord Freud

That the amendments for the Report stage be marshalled and considered in the following order: Clauses 1 to 11, Schedule 1, Clause 12, Schedule 2, Clauses 13 to 21.

Motion agreed.


Offender Rehabilitation Bill [HL]

Offender Rehabilitation Bill [HL]

Report

3.07 pm

Baroness Anelay of St Johns: My Lords, I remind those leaving the Chamber that they are expected to do so quietly. I also take this opportunity to remind those from the Cross Benches and the Labour Benches who are leaving that it is a custom of this House not to walk in front of the person who has risen to speak. I wonder whether they might perhaps remember that courtesy on another occasion, since plainly it is too late to stop them today.

Amendment 1

Moved by Lord Ramsbotham

1: Before Clause 1, insert the following new Clause—

“Probation

Probation service reform: Parliamentary approval

No alteration or reform may be made to the structure of the probation service unless the proposals have been laid before, and approved by resolution of, both Houses of Parliament.”

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Lord Ramsbotham: My Lords, as I have said on a number of occasions, this is a curious Bill. While the whole House welcomes its intentions, many of us are deeply alarmed at the absence of detail about their cost and how and whether they can be implemented in the timeframe depicted on page 34 of the so far undiscussed Transforming Rehabilitation White Paper. I have received many letters of concern about this, including a number from serving members of the National Probation Service, who are understandably worried about what is being done to them and their service, 31 of whose 35 trusts are adjudged to be performing well, with the remaining four performing exceptionally well.

Last Thursday, the Minister was kind enough to e-mail me a copy of the revised impact assessment, which I have to admit I find as disappointing as its predecessor, because it is still so thin on analysis of impact, cost or risk. I note that, yet again, the Government’s justification for not releasing more details is that to publish estimates would put contractual negotiations at risk and so prejudice the effectiveness of the competition for delivery of offender services. Indeed, compared with what has been put to Ministers, as disclosed in articles in the Times and Guardian today, it feels rather more like a ministerial pat on the head of a recalcitrant child.

In drawing the attention of the House to the inadequacy of the initial impact assessment, I questioned whether, because it was published on the same day as the Bill and the White Paper to which it referred, it had been available to Ministers during their analysis of risk, or added later. I have to ask the same about the draft strategic risk register, prepared for a rehabilitation programme board on 21 May, referred to in the articles. If a board saw a draft only 12 days after the Bill was published, when were the risks that it assessed seen and discussed by Ministers?

I presume that the impact of these risks was excluded from the impact assessment, because it refers only to the Bill, not to the whole programme—a clever piece of parliamentary games playing. In asking the Minister when he and his colleagues considered these risks, I also ask whether a proper business plan for the implementation of their ambitious proposals has been drawn up, telling Ministers—and so the public, whom it is their duty to protect—exactly how, when and by whom they are to be implemented.

That leads on to the question of why, throughout this Bill’s progress, I have felt so deeply uneasy about the way in which this House is being used. We all want reoffending to be reduced, but we do not want to see any programme with that end fall flat on its face because understandable concerns about the viability of untried theories, in the uncertain world in which many offenders live what can only be described as chaotic and dysfunctional lives, have been ridden over roughshod in the desire to satisfy a party politically directed timetable that pays no attention to practical reality.

There is also the importance of taking people with you, particularly those whom you employ. Loyalty, like responsibility and accountability, is a two-way process. You cannot expect people to be loyal to you

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unless they know that they can rely on your loyalty to them. The loyalty of the probation service is being pressed to limits that would make every soldier shudder. Indeed, since 9 May, they, I and others who have asked questions have felt rather like that Chinese student who, trying to stop something relentless, climbed on to a tank in Tiananmen Square, whose crew could appreciate what he wanted but were not be deflected from their directed purpose.

I wonder whether the real reason why the Secretary of State is unwilling to reveal an objective assessment of the impact of his proposals is that he dare not, because they are so undermined by the sheer scale of the risks as assessed by his own officials in the Ministry of Justice. He cannot have welcomed the chairman of the Justice Select Committee in the other place saying last week that the Ministry of Justice, responsible for carrying out his ambitious plans, displayed naivety about the contracting out of key services and lacked the capacity to know what it was doing.

In Committee I tried to encourage the Minister to delay further consideration of the Bill until we had had a more satisfactory impact assessment, and answers to the many questions raised at Second Reading, many of which matched risks raised by officials, who described the whole process of transforming the National Probation Service as a,

“complex, large-scale change programme to be completed within an aggressive timetable”.

As I have long suspected, the change programme that has been laid before us is far from complete, because officials say, in a document issued only this month:

“We are undertaking further work on statutory responsibilities, to determine if there is an obvious split between the public sector probation service and competed Providers, and will come back with further advice on this, including on how we ensure that providers meet these obligations”.

Surely it is a bit late for that, when work on the Bill is so far advanced.

Officials spell out a breathtakingly long list of details of what this complex unresearched change programme entails, which, according to the White Paper timetable, have to be completed in little over a year. Those include the implementation and testing of the new operational model, but not payment by results, by three probation trusts; the establishment of the so-called new probation service; the establishment of 21 government companies; the recruitment and appointment of new senior management teams for the National Probation Service and the government companies; the allocation of staff into roles in the new organisation; and the transfer of 18,000 staff to new employers. Probation trusts are to have agreed the national and competed functional split, and identified the proportion of staff and assets to be allocated to the public sector or government companies, by the end of August, and to have implemented the new operating model, while remaining contractually responsible for delivery by public sector and competed functions, serviced by a single corporate support, by next April. Trusts are to cease responsibility for delivery, and all staff and other assets are to be transferred to the public sector, or government companies, by next August. Ownership of the government companies is to be transferred to successful bidders from October.

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3.15 pm

In addition, officials have to allocate around 500 premises in whole or part to the National Probation Service or government companies; establish corporate support functions for all 21 new entities; reallocate up to 250,000 offender cases; and introduce new, or terminate all, contracts and partnerships and re-engineer in the region of 2,000 IT packages to enable operation of new entities. Neither the Ministry of Justice nor government have very good track records as far as IT packages are concerned—including having experienced major problems with the current probation programmes—which does not fill one with confidence about their ability to co-ordinate so many in such a short space of time. Indeed, Ministry of Justice officials admit that the complexity of closing down all these systems and moving to a shared-systems approach will present a considerable challenge. However, the sting is in the tail, because, having listed all these requirements, the restructuring document reminds Ministers that they must be delivered without materially impacting on business as usual.

Of the 17 areas of risk mentioned in the articles, some belong to the Ministry of Justice and some are subject to other influences. Some mention the reputation of the Ministry of Justice and some the response to the proposals of existing probation staff, which I confess to finding unattractive because they sniff of the blame culture.

Levels of concern were arrived at by multiplying an impact rating on a scale of one to five by a similarly scaled likelihood rating, any result of 15 or above being regarded as problematic. I shall not go through all 17, but highlight the eight most problematic and one other that is of particular interest because of its relevance to the impact assessment. The impact of all the eight is said to be having “significant detrimental effect” and the first “could prevent achievement”. There is a more than 80% likelihood that an unacceptable drop in operational performance during the programme leads to delivery failures and reputational damage. There is a 51% to 80% likelihood that affordability objectives for the reforms cannot be demonstrated or met, leading to failure to secure approvals during the programme, or financial and operational risk and reputational damage to the department after implementation.

It is stated that insufficient support for the reforms by probation management, staff and staff associations leads to failure to progress design and implementation to time and quality; that it is not possible to design the programme to a timescale that meets ministerial expectations and/or the coalition’s commitment to roll out payment by results by 2015; that insufficient participation by the market in competition leads to failure to secure value-for-money bids or at-risk elements of reforms; that new service and market models implemented as a result of the programme are ineffective and/or inefficient, leading to operational, financial and reputational impacts and failure to realise the planned benefits of the reforms; that services following competitions do not meet required quality, leading to operational failures and loss of public confidence; and that programme delivery cannot or does not meet the timescale set by the programme because it is dependent on wider government.

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Finally, because it is so pertinent to both my amendment and the lack of detail in the impact assessment, there is a risk that the programme does not deliver to the agreed time, quality and cost, and neither impact nor likelihood have been worked out for this apocalyptic outcome because risk will be rated only once planned budget and products are baselined, which suggests that the cost has not yet been worked out.

During my professional career I have been involved in a number of change programmes involving people and functions with a non-operational service, including having to reduce the size of the Army by a third over three years following the end of the Cold War, but never before have I come across a detailed assessment of risks being drafted only after a plan has been agreed and announced, let alone begun its passage through Parliament. I know that I am not alone in doubting whether the Ministry of Justice has the capacity to deliver such a complex public protection programme within the aggressive timetable imposed by its tough Secretary of State. I believe that the most responsible thing that the Government can now do is to admit that they have been trying to go too far too fast and that following careful analysis of all the factors, including the Chancellor’s spending review, they have decided temporarily to withdraw the Bill while they reassess what can realistically be achieved using available resources, which include the public, private and voluntary sectors as well as related programmes commissioned by other ministries. However, because the protection of the public is at stake, this reassessment must be conducted in such a way that satisfies full and detailed scrutiny by both Houses of Parliament.

To expect this House, denied a veto, to rubber-stamp the Bill at this stage is to treat it with contempt because there are far too many doubts about the viability and affordability of the method the Government have chosen to achieve the proposals to which it is related, and the impact of destroying what is in place before proper evaluation of the ability of what is proposed in its stead to do better. I therefore ask the Minister to suspend further discussion until my request has been referred not just to the Secretary of State but to the Prime Minister because so many other ministries are involved.

Lord Beecham: My Lords, as the noble Lord has made very clear, this amendment addresses issues both of form and substance. I entirely concur with his devastating and magisterial critique of the way the Government are seeking not merely to impose massive changes on a highly successful—indeed, award winning—public service but to do so without an evidence base, proper costings or any parliamentary scrutiny. The farce of the impact assessments has been compounded by the revelations of advice given to Ministers by Ministry of Justice officials on the risks attendant on the implementation of their policies and by the recently leaked document showing that the residual probation service dealing with high-risk offenders that is envisaged by the proposals will face further cuts in funding of 19% by 2017-18.

When the Government drove through their controversial, some of us would say disastrous, reorganisation of the National Health Service, they at

25 Jun 2013 : Column 663

least observed the proprieties and made the changes the subject of a Bill that was itself subject to scrutiny. In this case, as I have previously observed, the future of this service, so vital a part of our system of criminal justice and so important in maintaining the safety of the public, would not be being debated at all were it not for amendments emanating from the Opposition and Cross Benches in your Lordships’ House. It is astonishing, indeed disgraceful, that we read today that in their risk analysis Ministry of Justice officials have apparently stated that this Bill has been deliberately kept slim to “minimise the dependence of the reforms” on the passing of the legislation. I do not blame officials for this, nor do I blame the Minister in this House. The blame lies with the Lord Chancellor and Secretary of State Mr Grayling, whose only reaction so far, I understand, is to have ordered a leaks inquiry.

Lord Randolph Churchill famously described Gladstone as an old man in a hurry. The Lord Chancellor is a relatively young man in a hurry, but he, as I am sure the noble Lord, Lord McNally, would agree, is no Gladstone. If anything, he more closely resembles Randolph Churchill and if he continues on his present path, rushing on with eye-catching gimmicks and policies which have attracted the deep concern of the senior judiciary, such as those on criminal legal aid, judicial review and court privatisation, his political career is likely to end in the same way as Churchill’s.

It is characteristic of this Lord Chancellor that he proposes to begin to implement the changes he seeks as early as the end of August this year. What answers does he give to the questions raised by Her Majesty’s Chief Inspector of Probation in her response to the consultation? Many of these relate to the payment by results scheme to which we will turn when we debate the next amendment, but what is the Government’s reply to Liz Calderbank’s concern that the process of advising the court and Parole Board on sentencing and licensing conditions will require increased investment because more full pre-sentence reports will be required where cases will be referred to the private sector for supervision?

She suggests that a more mediated approach to supervising short-sentence offenders, which all of us welcome as a proposal in the Bill, would facilitate the better use of scarce resources. She is concerned that the proposed move to national commissioning instead of by 35 probation trusts,

“could be at the expense of the local perspective”,

cutting across promising developments in partnership work and disrupting successful partnerships with probation trusts. She refers to an issue raised in Committee about the position of small voluntary organisations in a commissioning framework dominated by large private sector providers, the fragmentation of responsibilities and a duplication of work. As she points out, the changes will effectively be irreversible once implemented. Do the words and warnings of this highly experienced public servant count for nothing?

The Lord Chancellor is promoting this agenda in the spirit of the promoters of the South Sea bubble, one of whom, it will be recalled, advertised a project,

“for carrying out an undertaking of great advantage but nobody to know what it is”.

25 Jun 2013 : Column 664

Well, we know what it is, but we do not know what it will cost or whether it will work, and neither do the Government.

Under the Government’s appalling proposals for criminal legal aid a defence advocate will be paid the same fee for a guilty plea as a not guilty plea. The salary of the noble Lord, Lord McNally, I am happy to say, will be the same whatever the outcome of this debate. Nevertheless, I advise him to plead guilty, accept the amendment which would allow a proper consideration of the Government’s proposals, their benefits certainly alongside the risks and costs, and get it over with.

Baroness Hamwee: My Lords, I share the frustration that has been expressed about this Bill not being about what we want to talk about and, indeed, diverting us from the important aspects of rehabilitation. I know we all share the objectives that have found this legislative form even if we do not all agree on the form they have taken in the Bill.

Being rather boring, I want to address the amendment as it is tabled and ask a couple of questions of the noble Lord when he comes to respond, if not of my noble friend. First, although this sounds quite counterintuitive, is there such a thing in legislation as the probation service? The Offender Management Act 2007, which is what I understand the changes which are being described are based on, talks about probation provision, probation purposes, probation service, but not the probation service. Secondly, again looking at the 2007 Act, have the proposers of this amendment taken into account the provisions within the Act for affirmative orders? Section 5(3)(c)—I know this is not the sort of speech that holds the House, certainly without me handing out programmes—provides for the purposes of a probation trust to include a purpose specified in regulations made by the Secretary of State. Those must be made, we find later in the Act, by affirmative resolution. Section 38(2)(a) is about amending, repealing or revoking an enactment and this again requires an affirmative resolution. As I said, being rather tedious, I am struggling a little with the form of the amendment and in understanding quite how it would apply in taking forward the points that have been made by the two noble Lords, given that I think we have to base what we are doing on the existing legislation.

3.30 pm

The Minister of State, Ministry of Justice (Lord McNally): My Lords, far from being tedious or boring, I found that an extremely interesting intervention, and I look forward to the reply of the noble Lord, Lord Ramsbotham. My noble friend is quite right to draw attention to the Offender Management Act 2007, because the plans that we have for the probation service are provided for on a legislative basis in that Act. The Bill before us is not, as we have fully acknowledged from the beginning, about the reorganisation of the probation service. As I have mentioned on a number of occasions, the powers to do that were helpfully left for us in the 2007 Act by the previous Administration.

25 Jun 2013 : Column 665

Under the 2007 Act, the Secretary of State may contract, with a probation trust, providers from the private or voluntary sector, or he may provide probation services directly. The Secretary of State intends to use the powers conferred by that Act, together with his common law powers, to create and sell companies, and to transfer the delivery of a large proportion of the probation service to the private sector via contractual arrangements involving the formation and sale of a number of new community rehabilitation companies. That is the basis of the approach.

Of course, this has not come out of a blue sky. The department’s rehabilitation reforms, like any other major government project, are subject to additional scrutiny by the Cabinet Office and Her Majesty’s Treasury, and through the Government’s Major Projects Review Group. Her Majesty’s Treasury approval is required for projects outside Parliament’s delegated authority, and the programme team is finding this full engagement of particular use in learning from the experience of other government departments.

Therefore, I do not accept that this matter has not received very thorough preparation, as suggested by the noble Lord, Lord Ramsbotham. This major piece of legislation is being managed quite properly. Ultimately, after all the rhetoric, the sting was in the tail. The noble Lord does not want this Bill to proceed and neither does the noble Lord, Lord Beecham. That is good opposition politics.

Lord Beecham: I am sorry but that is not the position. I am certainly happy that the Bill should proceed. An improved version of this Bill should proceed, and one of the improvements is contained in this amendment.

Lord McNally: One problem with piloting this Bill is that I am supposed to sit here and listen to all the aspersions about the capabilities of my department and the intentions of my Secretary of State, as well as all the other brickbats that are thrown. However, if anybody takes on board anything like the full intention behind the amendment, it will be clear that the two noble Lords want to throw a considerable spanner in the works. If that upsets them, I am very sorry but it is true. I remain committed, as I hope the House does—it gave the Bill its Second Reading and went through Committee—to what I have always seen as the deal that this Bill puts forward.

That deal is that we are putting forward a major reorganisation of probation in a way that releases the resources to provide care, guidance and support to a very important section of those who have been sentenced to fewer than 12 months—the group that is most likely to reoffend and to get into that whirligig of crime that we are trying to break. I say that each time the noble Lord, Lord Ramsbotham, tables one of his amendments to delay the Bill. We are putting this forward with good intention, with a great deal of preparation and work, and with a clear determination to put before the House as much information as we can. We are developing a case and we will go into a certain amount of commercial negotiation but with the full acceptance that we are doing something very radical. To use the statistics from a leaked report, as the noble Lord, Lord Ramsbotham, just did, is not worthy of him.

25 Jun 2013 : Column 666

I know that the noble Lord gets upset when he is attacked, yet when one rereads his speech one sees that he is very willing to dish it out. He throws out figures of 80% of this and 60% of that when he knows as well as I do that we are talking about a specific management tool that was used and developed by the previous Labour Government inside government, not to assess definite threats or problems but to identify issues that need further work. That is what the process is.

We have had it before with other Bills—this sudden idea that somewhere inside government these risks are being hidden from the public and Parliament, when the Opposition know full well that what is being gone through is an exercise that enables those who are working on these various bits of policy to identify which particular area of policy they need to develop, do work on and make proposals in relation to. It is not, and never was, a forecast of what is going to happen. It is disingenuous to suggest to the House that that is what it is.

The noble Baroness, Lady Hamwee, was right to look at the amendment as it stands. It is very widely drafted. It states:

“No alteration or reform may be made to the structure of the probation service”,

but that would not just encompass national changes to a new framework; it would also mean that probation trusts in the current model could make no change to their set-up, however minor, without parliamentary approval. I do not want to dwell on this, but I ask the noble Lord to think carefully about whether that kind of parliamentary micromanagement is sensible in legislation.

I turn now to the detail of the changes that we are proposing. First, let me put on record that the Government recognise the excellent work that is done by the probation professionals across the country. I have said that time and again from this Dispatch Box. Our proposals for reform seek to build on those achievements, not to minimise them. We are doing that in two ways: first, by extending rehabilitation to all offenders who need it through the provisions in this Bill; and, secondly, by seeking to restructure the way in which these services are delivered by opening up the delivery of probation services to a wider market and by bringing the retained public sector probation service into a national entity. These latter elements of our reform proposals are crucial to the core aim of our proposals: to break the cycle of reoffending. We do so for three reasons. The first is that by opening up the provision of rehabilitation services to the private and voluntary sectors, we are seeking to promote additional innovation and investment. Despite the excellent work and commitment of those supporting offenders within the public sector, we are unable to achieve this fully under our current structures.

Secondly, by restructuring the public sector probation service into a national entity, we are focusing public sector resources on areas where it is most needed: on protecting the public from harm and providing clear and impartial advice to sentencers. By managing this service nationally, we are seeking to drive excellence across the country, bringing all delivery of these services up to the level of the highest performers.

25 Jun 2013 : Column 667

Finally, and perhaps most importantly, through both elements of this structural reform we are seeking to drive efficiency and savings in current practices and to provide the necessary investment to open up provision to all those who need it. I remind noble Lords that we simply cannot afford to expand rehabilitation to short-sentence offenders without these savings.

I now turn to the detail of the structural reforms that we are proposing. We are committed to maintaining a strong local delivery structure within the public sector probation service. Although current trusts have clearly built excellent relationships with other local delivery partners, much of this local working does not take place at the level of the 35 existing trusts but within the 150 local delivery units that sit beneath them. Our firm intention is to retain a strong local delivery structure based on these units, providing clear representation and involvement within both local authority and criminal justice areas.

Senior managers in the new organisation will have a strong presence within the National Offender Management Service and the Ministry of Justice, with directors for both England and Wales sitting on the NOMS board. Probation has often been viewed as the junior partner within NOMS, and this reorganisation is an opportunity to remedy that.

For probation functions that are being competed for, we are committed to retaining the skills, expertise and experience of operational staff currently within trusts. We are working closely with unions and associations representing probation providers to ensure that any process of selecting staff for the new structures is fair and minimises disruption as far as possible. We have also been engaging with interested parties to develop proposals for a professional body for the probation profession, and are strongly supportive of this idea.

We also recognise how crucial working in partnership is to the successful rehabilitation of offenders, and how probation trusts are integral to many of these excellent local partnership arrangements, including integrated offender management. The Government are determined not to disrupt this, and we are clear that contracted providers will need to demonstrate how they will engage effectively with key local partners when they are bidding for contracts.

As I set out in my earlier correspondence to noble Lords, we have already consulted extensively on the proposals in Transforming Rehabilitation: ARevolution in the Way We Manage Offenders. We received almost 600 formal responses to the consultation and held 14 consultation events that were attended by over 800 stakeholders, and the views received were invaluable in informing the reforms set out in the strategy published on 9 May. Both the transforming rehabilitation consultation document and the strategy were presented to Parliament, and we continue to welcome further interest from parliamentarians in these reforms.

I recognise the expertise that many Peers have on these issues, and I am committed to ensuring that noble Lords are kept informed of and involved in these reforms as they are taken forward. A number of other supporting documents have been and will be published that are available via the Ministry of Justice

25 Jun 2013 : Column 668

website: namely, the summary of responses to the consultation, the payment mechanism Straw Man and the prior information notice. In order to make them more easily accessible, I will place copies of these and all future documents giving further detail about the design of the new system in the House of Lords Library. I am happy to arrange an all-Peers meeting as and when we publish further documents. If it would be helpful to Peers, I will also explore through the usual channels the possibility of an opportunity for further parliamentary debate on these proposals outside the realm of this Bill.

In short, I am absolutely committed to ensuring that the Government engage with Peers and other parliamentarians as we develop the detail of our reforms. However, I stress again that the significant benefits that these changes will deliver, including the extension of rehabilitation to short-sentence offenders and the creation of “through the prison gate” resettlement services, are affordable only as part of a wider package of reforms. I hope that Peers will be able to support the Government in taking these reforms forward.

I hope that these points of detail will provide noble Lords with some reassurance as to the structural changes we have proposed, and in light of this I ask the noble Lord to withdraw his amendment.

3.45 pm

Lord Richard: Before the noble Lord sits down, perhaps he can help me with one small issue concerning the risk assessment. If you have a risk assessment, surely it follows that risks have to be assessed. The noble Lord says, “No, they do not have to be assessed; they have to be identified”. Why does he make that distinction? It goes to the essence of the point that the noble Lord, Lord Ramsbotham, is making. If there is an assessment of risk, surely we are entitled to see it, not to be told merely that certain risks have been identified but, as far as we know, remain unassessed.

Lord McNally: Of course, part of the problem is that it is described as a risk assessment by journalists. As I said before, a variety of exercises is carried out by the project development team, using various combinations of some of the figures that the noble Lord, Lord Ramsbotham, plucked out—in fact, it was a third source because they came from a leak to a journalist to the noble Lord, Lord Ramsbotham, to the House. So I ask the House to decide how accurate they are.

Of course, the Opposition cry, “Tell us”, but they went through similar exercises on big projects when they were in government. They realised that this was work in progress and it remained part of the management team’s work-in-progress tools. It is not a document that would give help to anybody in terms of what the noble Lord is talking about as risk. It is not about that kind of thing; it is about looking across the piece to see where the emphasis of work and development has to go.

The Countess of Mar: My Lords, before the noble Lord sits down, following his comments about his noble friend Lady Hamwee’s remarks about the probation service, he twice at least used the phrase “the probation

25 Jun 2013 : Column 669

service” in his speech. Can he say what he was covering in that phrase? In addition, has he not considered that a major stumbling block is the fact that we do not know how much this is going to cost? My noble friend Lord Ramsbotham and the noble Lord, Lord Beecham, both said that we need to know the cost. The Minister has made no mention of the cost.

Lord McNally: We are working within a very strict budget. Because we have other commitments as far as the overall expenditure of the department is concerned, we have also said that we will be spending a little less than the £1 billion that is spent on probation at present. We believe that with our experience of piloting other schemes we can bring that down. But that will unfold as we test against the market. One of the reasons why we cannot give the precise figures is that we will be going into negotiations with commercial operators who would very much like to know in advance what our baseline would be, along with our other financial operations. We know the figures in broad terms and, as we have said before, while this will make some savings, it is the flexibility, the hard bargains that we were able to drive with the private sector, and the efficiencies that we will introduce which will bring the costs down.

Yes, we all use the term “probation service” rather loosely. What my noble friend Lady Hamwee drew attention to was that there is no definition of it in statute, and therefore she was warning the noble Lord, Lord Ramsbotham, of a possible defect in his amendment in calling it as such.

Lord Elystan-Morgan: My Lords, perhaps I may put a point to the Minister. No doubt he will recollect that at the end of 2010, the National Audit Office calculated that the cost of reoffending lies between the parameters of £9.5 billion and £13 billion per annum. Is it not therefore a reality that, even with the best will in the world and the most accurate attempt at analysis, it is impossible to arrive at any meaningful figure for what these new and revolutionary changes will bring about? It is not a question of not showing your hand in what might be a commercial negotiation that will have to follow, but that the figures are virtually unquantifiable and could mean massive public loss.

Lord McNally: I am extremely grateful to the noble Lord for that intervention, which probably was not intended to be helpful, but certainly was. That is because these are the stakes we are playing for. I do not doubt the figures he has given and indeed I have seen them. Reoffending costs this country between £9 billion and £14 billion, so let us not say that we are going to aim to prevent 50% of reoffending. If we could get it down to 40%, just think what that would mean in hard cash. That is the prize we are aiming for. Of course it takes some radical thinking and means taking risks that are outside the box—that is exactly what we are doing. When there is a new idea, it is a lot easier to throw spanners in the works or to say what is so often said about any new and radical idea, “Let’s have a bit more time to think about it and take it all a bit more slowly”. We have put a lot of work into this project and, as we develop and unfold it, we are willing

25 Jun 2013 : Column 670

to share information with Members of this House and others. However, the noble Lord is quite right that, as well as the impact on offenders who are taken out of the cycle of crime, and apart from the impact on victims who will avoid the crimes that the rehabilitated will not commit, there really is big money to be saved by carrying this through. I am as enthusiastic and confident about it now as I was when we started, and I hope that the House will feel the same as it did when it gave the Bill an overwhelming Second Reading.

Lord Ramsbotham: My Lords, I am grateful to the Minister for that reply and I thank all those who have taken part in this short debate. I have to admit to the noble Baroness, Lady Hamwee, that I had not considered the details she outlined as far as the legislation is concerned. I had always assumed that the existing national probation service was the National Probation Service. Absolute logic suggests that I should go away and rethink the wording of the amendment because we must get it correct if we are actually going to put something through.

I should say to the Minister that I am not opposed to the intent of this Bill and I never have been. Indeed, I started my speech by saying that. The Cross-Benches are not the Opposition and I rather resent being called the Opposition purely because we sometimes go against what the Government propose. I am simply concerned to do all that I possibly can to encourage the Government and to make certain that we can be convinced by the Government that every possible examination has been carried out into whether what is proposed is possible and practical and that as little damage is done as possible to the existing public services, which have given such outstanding service for so long.

I am extremely grateful to the Minister for a number of things that he said, in particular that we will have a debate. As he appreciates, one of the frustrations of this Bill is that it is not actually about the proposals—it is about the tools of the proposals. The legislation would suggest that although we can say what we like about those tools, it does not matter a damn, because the Secretary of State is going to go ahead anyway, encouraged by the legislation’s permission for him to do so. In that case, we would be denied any chance to have our say and to put our expertise and intent at the service of the Government. I am also very grateful for his explanation of what was going on, because we have not heard that before. I am very grateful that he will put copies of the things in the Library, because I suspect that many noble Lords do not actually follow everything that is on the internet in the way that officials might hope.

There is no need to involve a third party in the distance between the leaks and me—I received the documents last Thursday and have them in my possession now. I was laying my assessment of Ministry of Justice documents before the House and not a journalist’s interpretation of those documents. My concerns were, I think, quite reasonable. We were presented with a Bill on 9 May, on which we started work, but these assessments of risk were dated 21 May, which suggests that they came after the Bill. That is something about which I still seek reassurance.

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I am extremely sorry that the Minister should have suggested that I am not happy to take it as well as give it. As he knows perfectly well, this refers to an incident—which I did not wish to lay before the House—when I complained to him that he had attributed views to me when I was not in the House and therefore unable to answer. I do not believe that we should conduct our business that way.

In view of the questions that the noble Baroness, Lady Hamwee, has raised, I have some concern about this, but I wish to test the opinion of the House.

3.58 pm

Division on Amendment 1

Contents 215; Not-Contents 186.

Amendment 1 agreed.

Division No.  1

CONTENTS

Aberdare, L.

Adams of Craigielea, B.

Adonis, L.

Afshar, B.

Allenby of Megiddo, V.

Alton of Liverpool, L.

Anderson of Swansea, L.

Armstrong of Hill Top, B.

Bach, L.

Bakewell, B.

Barnett, L.

Bassam of Brighton, L.

Beecham, L.

Berkeley of Knighton, L.

Bhattacharyya, L.

Bichard, L.

Billingham, B.

Bilston, L.

Blackstone, B.

Blair of Boughton, L.

Blood, B.

Boothroyd, B.

Borrie, L.

Bradley, L.

Brooke of Alverthorpe, L.

Brookman, L.

Browne of Belmont, L.

Browne of Ladyton, L.

Butler of Brockwell, L.

Campbell of Surbiton, B.

Campbell-Savours, L.

Carter of Coles, L.

Chandos, V.

Christopher, L.

Clancarty, E.

Clark of Windermere, L.

Clarke of Hampstead, L.

Clinton-Davis, L.

Cobbold, L.

Collins of Highbury, L.

Colville of Culross, V.

Corston, B.

Coussins, B.

Craig of Radley, L.

Craigavon, V.

Crawley, B.

Crisp, L.

Cunningham of Felling, L.

Davies of Coity, L.

Davies of Oldham, L.

Davies of Stamford, L.

Dean of Thornton-le-Fylde, B.

Dear, L.

Deech, B.

Desai, L.

Donaghy, B.

Drake, B.

Elder, L.

Elystan-Morgan, L.

Erroll, E.

Evans of Parkside, L.

Evans of Temple Guiting, L.

Evans of Watford, L.

Falkland, V.

Farrington of Ribbleton, B.

Faulkner of Worcester, L.

Fellowes, L.

Flather, B.

Foulkes of Cumnock, L.

Fritchie, B.

Gale, B.

Gibson of Market Rasen, B.

Golding, B.

Gordon of Strathblane, L.

Goudie, B.

Grantchester, L.

Greenway, L.

Grenfell, L.

Griffiths of Burry Port, L.

Grocott, L.

Hanworth, V.

Hardie, L.

Harries of Pentregarth, L.

Harris of Haringey, L.

Harrison, L.

Hart of Chilton, L.

Haskel, L.

Haworth, L.

Hayman, B.

Hayter of Kentish Town, B.

Healy of Primrose Hill, B.

Henig, B.

Hollick, L.

Hollis of Heigham, B.

Howarth of Breckland, B.

Howarth of Newport, L.

Howe of Idlicote, B. [Teller]

Howells of St Davids, B.

Howie of Troon, L.

25 Jun 2013 : Column 672

Hoyle, L.

Hughes of Stretford, B.

Hughes of Woodside, L.

Hunt of Kings Heath, L.

Hylton, L.

Irvine of Lairg, L.

Janner of Braunstone, L.

Jones of Whitchurch, B.

Jones, L.

Jordan, L.

Judd, L.

Kakkar, L.

Kilclooney, L.

King of Bow, B.

Kinnock of Holyhead, B.

Kinnock, L.

Kirkhill, L.

Knight of Weymouth, L.

Laming, L.

Liddell of Coatdyke, B.

Liddle, L.

Lipsey, L.

Listowel, E.

Lloyd of Berwick, L.

Low of Dalston, L.

Luce, L.

Lytton, E.

McAvoy, L.

McDonagh, B.

McFall of Alcluith, L.

MacKenzie of Culkein, L.

McKenzie of Luton, L.

Mar, C.

Martin of Springburn, L.

Masham of Ilton, B.

Massey of Darwen, B.

Maxton, L.

May of Oxford, L.

Meacher, B.

Mitchell, L.

Morgan, L.

Morris of Aberavon, L.

Morris of Handsworth, L.

Moser, L.

Noon, L.

Nye, B.

O'Loan, B.

Ouseley, L.

Palmer, L.

Pannick, L.

Parekh, L.

Patel of Blackburn, L.

Patel of Bradford, L.

Patel, L.

Paul, L.

Pendry, L.

Pitkeathley, B.

Ponsonby of Shulbrede, L.

Prosser, B.

Puttnam, L.

Quin, B.

Quirk, L.

Radice, L.

Ramsbotham, L. [Teller]

Rendell of Babergh, B.

Richard, L.

Ripon and Leeds, Bp.

Rix, L.

Robertson of Port Ellen, L.

Rogan, L.

Rooker, L.

Rosser, L.

Rowe-Beddoe, L.

Rowlands, L.

Royall of Blaisdon, B.

St John of Bletso, L.

Sandwich, E.

Sawyer, L.

Scotland of Asthal, B.

Sherlock, B.

Simon, V.

Skidelsky, L.

Slim, V.

Smith of Basildon, B.

Smith of Finsbury, L.

Smith of Leigh, L.

Snape, L.

Stern, B.

Stevenson of Balmacara, L.

Stirrup, L.

Stoddart of Swindon, L.

Stone of Blackheath, L.

Taylor of Blackburn, L.

Temple-Morris, L.

Touhig, L.

Trees, L.

Triesman, L.

Tunnicliffe, L.

Turnberg, L.

Uddin, B.

Wall of New Barnet, B.

Walpole, L.

Warnock, B.

Watson of Invergowrie, L.

West of Spithead, L.

Wheeler, B.

Whitaker, B.

Whitty, L.

Wigley, L.

Wilkins, B.

Williams of Elvel, L.

Williamson of Horton, L.

Wills, L.

Wilson of Tillyorn, L.

Winston, L.

Woolmer of Leeds, L.

NOT CONTENTS

Addington, L.

Ahmad of Wimbledon, L.

Anelay of St Johns, B. [Teller]

Arran, E.

Ashton of Hyde, L.

Astor, V.

Attlee, E.

Avebury, L.

Barker, B.

Bates, L.

Benjamin, B.

Berridge, B.

Black of Brentwood, L.

Blackwell, L.

Blencathra, L.

Bowness, L.

Brabazon of Tara, L.

Bradshaw, L.

Bridgeman, V.

Brinton, B.

Brittan of Spennithorne, L.

Brooke of Sutton Mandeville, L.

Brougham and Vaux, L.

Browning, B.

Burnett, L.

Byford, B.

Caithness, E.

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Colwyn, L.

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Courtown, E.

Crathorne, L.

Crickhowell, L.

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Dholakia, L.

Dixon-Smith, L.

Dobbs, L.

Doocey, B.

Dykes, L.

Eccles, V.

Eden of Winton, L.

Edmiston, L.

Elton, L.

Empey, L.

Faulks, L.

Fearn, L.

Fellowes of West Stafford, L.

Fookes, B.

Forsyth of Drumlean, L.

Fowler, L.

Framlingham, L.

Garden of Frognal, B.

Gardner of Parkes, B.

Geddes, L.

German, L.

Glasgow, E.

Glentoran, L.

Goodhart, L.

Goodlad, L.

Grade of Yarmouth, L.

Greaves, L.

Griffiths of Fforestfach, L.

Hamilton of Epsom, L.

Hamwee, B.

Hanham, B.

Harris of Richmond, B.

Henley, L.

Higgins, L.

Hill of Oareford, L.

Hooper, B.

Howe of Aberavon, L.

Howe, E.

Howell of Guildford, L.

Hunt of Wirral, L.

Hurd of Westwell, L.

Hussain, L.

Hussein-Ece, B.

Inglewood, L.

James of Blackheath, L.

Jenkin of Kennington, B.

Jenkin of Roding, L.

Jones of Cheltenham, L.

King of Bridgwater, L.

Knight of Collingtree, B.

Kramer, B.

Lamont of Lerwick, L.

Lawson of Blaby, L.

Lee of Trafford, L.

Lester of Herne Hill, L.

Lexden, L.

Lindsay, E.

Lingfield, L.

Loomba, L.

Lothian, M.

Lucas, L.

Luke, L.

McColl of Dulwich, L.

MacGregor of Pulham Market, L.

Mackay of Clashfern, L.

Maclennan of Rogart, L.

McNally, L.

Maddock, B.

Magan of Castletown, L.

Marks of Henley-on-Thames, L.

Marlesford, L.

Mayhew of Twysden, L.

Miller of Hendon, B.

Montrose, D.

Morris of Bolton, B.

Moynihan, L.

Naseby, L.

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Newby, L. [Teller]

Northbrook, L.

Northover, B.

Norton of Louth, L.

O'Cathain, B.

Oppenheim-Barnes, B.

Palmer of Childs Hill, L.

Parminter, B.

Patten, L.

Perry of Southwark, B.

Phillips of Sudbury, L.

Plumb, L.

Popat, L.

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Ridley, V.

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Shackleton of Belgravia, B.

Sharp of Guildford, B.

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Shaw of Northstead, L.

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Verma, B.

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4.12 pm

Amendment 2

Moved by Lord Beecham

2*: Before Clause 1, insert the following new Clause—

“Proposed reform of probation services

(1) Subject to subsection (2), before instituting a system of payment by results for the provision of services to supervise offenders, the Secretary of State shall prescribe by statutory instrument a scheme for such a system, which shall be laid before and approved by resolution of both Houses of Parliament.

(2) Before such system may come into existence, the Secretary of State shall undertake a pilot scheme lasting three years in duration, which shall be independently evaluated, with the evaluation report laid before Parliament and approved by resolution of both Houses of Parliament.

(3) Any payment by results pilot shall be based upon existing probation trust areas.”

Lord Beecham: My Lords, I begin by reiterating that I and colleagues on these Benches, and indeed across the whole House, are entirely supportive of the Government’s intentions in the Bill to reduce reoffending. We congratulate them on that aspiration. We want to work with them to see its fulfilment but we have legitimate questions to raise about the way in which they seek to proceed. Having said that, I repeat that we are at one with them in the objective of saving large amounts of public money and, equally importantly, helping to reshape the lives of the people and communities upon whom they have an impact.

This amendment, which I trust passes the Hamwee test, deals with payment by results. The Government’s proposals, which are of course not in the Bill, postulate a system in which for short-sentence offenders there will be supervision, from which the probation service will effectively be excluded, in respect of what have been described as low-and medium-risk offenders. That work will be carried out under contract by independent private or voluntary sector organisations, or a combination of the two. The amendment is designed to ensure that such a scheme is properly piloted. It does not rule it out, but it suggests that the scheme be properly piloted and then approved by Parliament as a radical change to the nature of the probation service.

I am grateful to the noble Lords, Lord Taylor and Lord McNally, for answering after a fashion several questions which I raised at Second Reading and in Committee on payment by results schemes in connection with this question of the prevention of reoffending. The noble Lord, Lord Taylor, responded to my request for an explanation of why the Government abandoned pilot schemes by the Wales and the Staffordshire and West Midlands probation trusts, and why they refused an FOI request for details of the evaluation of those pilots, by a curious answer to my first question—to which I shall return—and by responding to my second by falling back on the wholly unsatisfactory defence that the information relates to the formulation and development of government policy.

4.15 pm

It was “judged the public interest was better served by withholding the information to ensure Ministers and officials can conduct rigorous assessment of developing proposals—including considerations of

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the pros and cons, and learning from any pilots—without there being premature disclosure which might close off discussion and the development of better options”. The latter point seems to be a classic non sequitur, especially in the light of the preceding paragraph in the letter, which asserts that, “The lessons the Ministry of Justice has drawn from implementing the pilots has given them confidence that they can design and commission robust contracts that drive right behaviours and generate value for money. It was decided that value for money would best be served by discontinuing work on pilots that might be incompatible with the wider reform programme”.

If the pilots are not to shape the wider reform programme, why can their evaluation not be disclosed? Is it because the Government have determined as a matter of policy—or rather, ideology—that the probation service is to be excluded from this area of work? Did the results demonstrate a capacity on the part of the trusts to deliver the objectives or not? If they did, why have the Government chosen to rely entirely on other providers?

Interestingly, the noble Lord, Lord McNally, in his letter says that the department “does not hold evaluations of the pilots”, but that it does hold “notes of lesson learned workshops”—that is the phrasing—“relating to the pilots”. From the back of these departmental envelopes, the department is apparently “considering what information it should publish before formal procurement begins and information relating to these pilots is being considered as part of the process”, but without any intention, apparently, of their being disclosed to Parliament. Ministers appear to be adopting the character of Kaiser Wilhelm II in the famous Punch cartoon on the occasion of his dismissal of Bismarck as Imperial Chancellor. The caption showed the Kaiser dismissing a nautical Bismarck over the legend “Dropping the Pilot”. That is exactly what the Government appear to have done in respect of these two pilots.

However, it is otherwise, apparently, with the interim reports on the two prison pilots at Doncaster and Peterborough, rather too glibly hailed by the ever casual Mr Grayling as successful. The noble Lord, Lord McNally, very helpfully referred me to two reports. The one on Doncaster was dated 2011, which is before the project got under way in Doncaster. The other was an interim report on Peterborough. Both pilots are supposed to run for four years. The amendment suggests a more modest period of three years. In any event, that would take us beyond the next election, which is too long for Mr Grayling’s political agenda. At best, as my right honourable friend Sadiq Khan, among others, has pointed out, these very early results are mixed with Doncaster being, if anything, disappointing and Peterborough, on one measure, barely encouraging. Yet the Government appear determined to press on with payment by results in any event. I was going to say “at all costs”, but of course they have no intention of revealing the costs of the short sentence or other schemes, as what passes for the impact assessment and this afternoon’s debate make clear.

The Minister stated in Committee and repeated in his letter to me that the Government “are not able to include the likely costs of providing additional

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supervision”, which will, of course, be required in respect of the considerable number—some 250,000—people who emerge from short sentences “because they will be subject to the outcome of competing services for offenders in the community, and to give out an estimated figure could put contractual negotiations at risk”. I could understand that in the case of individual contracts, but it is surely possible to prove a ballpark figure for the entire programme. It is not going to be let as a single programme, after all.

The impact assessment makes an attempt of a kind to estimate the cost,

“associated with breach of licence and supervision conditions for short sentenced offenders”.

The best estimate is that there could be a cost of £27 million a year. The low estimate is a cost of £6 million a year; the high estimate is £42 million a year. What wonderful precision in the assessment of the impact of proposals.

I might have described this as the Government inviting us to take a leap in the dark but, of course, the Bill contains no invitation of any kind to consider the Government’s policy in these matters and it would not be discussed at all without this amendment.

A host of questions is still unanswered. The Minister’s letter asserts that the Government will “design a competition process that allows a range of different kinds of entities to be able to bid to deliver services. Such entities would have to be capable of bearing financial risk so cannot be public sector bodies, but this could include alternative delivery vehicles and mutuals designed by staff groups within existing probation trusts”.

It seems to me that this latter is a naked bid to defuse opposition from within the probation service, but it rests on another non sequitur. There is no reason why public sector bodies should not engage in activities which involve financial risk. They do it all the time: the Government do it, the health service does it, local authorities do it, and they frequently manage that risk better than private sector bodies, as the shambles of our economy only too painfully demonstrates.

The letter goes on to make a number of other points which raise more questions than they provide answers. Thus, apparently, performance indicators will be used to measure service delivery and the Ministry of Justice will be able to deduct an unspecified proportion of the fee for service payment. There is simply no indication of how this will work. What proportion is envisaged? What weight will be given to the nature of any reoffending? Will a motoring offence count the same as a burglary or a crime of violence? The letter states that any offence committed within a one-year follow up period would be taken into account if it is proven by a caution or conviction. That strikes me as much too broad a definition. However, 12 months may well be too short a period within which to judge whether the supervision has been successful. The notion that performance payments are to be made by cohort with potentially undifferentiated weightings for the character and severity of the offences or the record of the individual offender is very troubling.

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There are major issues about the management of risk, given that at least 25% of offenders move between categories, with a significant number becoming high risk. How will this be provided for in the contractual arrangements? Will it mean, as suggested by the Chief Inspector of Probation, that,

“only a small part of the contract price can be genuinely dependent on a reoffending measure”.?

The Chief Inspector has also referred to the fact that,

“the vital importance of victims’ safety is not given sufficient prominence in the proposals”,

and that,

“victim contact services … should be retained within the public sector probation service”.

She is concerned that in the payment by results system,

“any lack of contractual or operational clarity … will … lead to systemic failure and an increased risk to the public”,

and that,

“the current proposals for the management of such risk cannot be judged as workable”.

In one out of 10 cases inspected by the inspectorate, breach action was required. Under the proposals, probation would have very limited contact with low and medium-risk-cases and could not discharge its responsibilities. The binary system that the Government are proposing is fraught with difficulty.

Finally, there is the highly relevant question of cost. Some 250,000 people a year will now receive supervision for the first time. I repeat that that is a welcome development, but how will it be paid for? The coalition agreement stated that independent providers would be paid,

“to reduce reoffending, paid for by the savings this new approach will generate within the criminal justice system”.

Yet the new approach is not to be tested unless this amendment is carried and the Ministry of Justice risk assessment, which the Government have been at such pains to conceal, and which the Minister this afternoon seeks to dismiss as meaningless, estimates a 51% to 80% risk that cost savings will not be met. Only a reckless gambler would place a bet at those odds. Where is the figure given to the Government? The rush to implement this half-baked concept without proper piloting and evaluation, and without parliamentary scrutiny or adequate analysis of the financial implications, is all too familiar. Mr Grayling already stands convicted of an abysmal failure in the analogous approach that he adopted in the Work Programme. There is insufficient reason to believe that payment by results in the sensitive area of criminal justice, with all its implications for public confidence, will fare any better.

The Minister is aware of the Government’s proposals on criminal legal aid, under which an advocate presenting a guilty plea will receive exactly the same fee as an advocate putting forward and defending a not guilty plea. The Minister’s salary, I am pleased to say, will remain the same whatever the outcome of the debate and the Bill. Therefore, I advise him to do the sensible thing—to accept the amendment, plead guilty and get it over with, which is presumably what the Lord Chancellor’s proposals on the criminal legal aid system will bring about.

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This amendment is designed to promote the Government’s policy effectively. It is not designed to undermine its objectives or to prevent it; it is designed to ensure that we have a developed, piloted system, which is workable and cost-effective, in the interests of the whole community and of achieving the Government’s objective. I beg to move.

Lord Ramsbotham: My Lords, I do not want to add much to what the noble Lord, Lord Beecham, has just said, because he has covered everything. However, I notice that, in a recent letter to us, the Minister mentioned that results were to be paid for after one year. I suspect that this is very welcome to both the voluntary and private sectors, which will be competing for payment. The voluntary sector would find it very difficult to go for longer without payment. However, as the Minister knows, reoffending rates always used to be measured after two years. Indeed, if you follow the reoffending rates after that, you find that they decline over time. Therefore, is it not rather premature to come to a judgment after one year? Could the Minister say whether it is intended that, if an offender goes on to reoffend two or three years after release, the company that has been paid will be expected to make a repayment for reoffending that happened later?

Lord Goodhart: My Lords, I was strongly supportive of Amendment 1, moved by the noble Lord, Lord Ramsbotham. However, there was a defect in that amendment, which was disclosed by my noble friend Lady Hamwee. Therefore, it seemed sensible, as I think the noble Lord, Lord Ramsbotham, appeared to propose at one moment, that he should withdraw that amendment and come back with another version at Third Reading. For some reason—I would be interested to know why—he did not do that, but pressed his amendment to a vote this time. The result was that the amendment was passed and cannot be changed, except by the House of Commons when it goes back there. It would have been much better if we could have decided a better version of Amendment 1 ourselves.

4.30 pm

Lord Elystan-Morgan: That, I think, is a very narrow and technical point. It may well be that, if Amendment 1 had referred not to the probation service but to the probation system, it would have been unexceptionable, and a very short, simple manuscript amendment would probably bring that result about.

As for the present amendment, I wholeheartedly support it, and it is all the more relevant now, on account of the earlier amendment being passed and incorporated in the Bill.

I was somewhat surprised by the Minister’s attitude to the amendment, and to the noble Lord, Lord Ramsbotham. If anyone has served the public interest with great, dispassionate and conscientious commitment in so many fields, it is he. It is entirely wrong that he should be listed with the “bad lad” wreckers such as me, who may sometimes be accused of having a somewhat subjective neutrality on the Cross Benches.

The noble Lord, Lord Beecham, referred to Punch and “Dropping the Pilot”, but I am thinking of another well known Punch cartoon, about the curate’s egg.

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The Bill is good in parts, but is thoroughly rotten in others. It is good and splendid in what it seeks to achieve, which is somehow or other to rid society of, or at least to ameliorate, the curse of reoffending. I have already cited, in an intervention on the noble Lord, Lord McNally, the National Audit Office’s figures, which he accepts. In 2010, the parameters were from £9.5 billion to £13 billion. The noble Lord now says that they are from £9.5 billion to £14 billion. That is apparently the point, in relation not only to the earlier amendment but to this one, too. He says that if there is a reduction of 5%, 10% or 20%, we will obviously achieve a massive public saving.

However, why must we assume that we shall make that saving? The probation service, which is now about 100 years old, is one of the most distinguished public services that this country has ever had. These changes are the greatest ever conceived for that service, and have the capacity to wreck it and emasculate it completely. If we get them wrong and they are failures, and if that, not unnaturally, results in more reoffending, we could be talking in terms not of saving millions but of the possible loss of millions, or even more. Why should we automatically assume that there will be a saving? The Minister may say, “I am assuming that because I believe the transfer of 70% of the probation service to private enterprise will succeed”. Why is anybody entitled automatically to come to that conclusion?

I have spent a great deal of my life in the courts, as a solicitor, a barrister, a recorder and a circuit judge, and I believe that the probation service is a Rolls-Royce service. Indeed, the evidence supports that. Of 35 units —I think it is 35—four were classed as “excellent” and all the others as “acceptable” and “good”. There could be no better bill of health, so there is no justification for the changes on that basis. This is a sortie into the dark—a voyage into uncharted waters. It may be successful; I will not argue that transferring those responsibilities to private entities carries an absolute guarantee of failure. What I am saying is that there is a huge danger, and there are huge question marks over exactly what could happen.

One problem that I foresee involves the probation service’s present quasi-judicial functions, in reporting to the court that there has been a breach. A decision has to be made on how to balance a number of factors against another set of factors—a decision that sets the machinery in the courts in motion. How can lay men, however well tutored in the short term, ever achieve that sort of expertise? How can there be confidence in the exercise of that quasi-judicial function?

Here we have the most massive upheaval that the probation service has ever seen in its 100 years’ existence. We are running massive risks, and everything must be done by this House to try to reduce those risks and to see to it that the laudable motivation behind the Bill, of reducing reconviction rates and all that emanates from that, is given the best chance possible. That is my plea. If I am to be labelled by the Minister as a wrecker on that account, I plead guilty and do so with pride.

Baroness Hamwee: My Lords, my noble friend the Minister will know that I have been concerned about a payments-by-results service, not least because of the

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threat, as I see it, to innovative, interesting, small-scale provision which is delivered so effectively by a number of organisations that are very often—because this is the way with the voluntary sector—working on something of a knife edge. I have had reassurances, which I have very much welcomed, about the financial arrangements being such as to support small organisations which—I do not want to be pejorative towards them—may feel that they are lurching from month to month not being entirely certain that their income is sufficiently stable. They are also at a disadvantage compared with bigger organisations when it comes to a bidding war. There are a lot of sectors where some sort of beauty parade is undertaken. Sometimes, the money gets spent on the beauty rather than the content, and that is what wins the contract. I say again that I have heard reassurances about support for small organisations for part of the bidding process.

I want to take this opportunity to ask my noble friend for reassurance about something that struck me only earlier today. It is entirely likely that large outsourcing companies—we know the various names—will bid for some of the contracts. We also know that the proposed changes to criminal legal aid are likely to mean that the same large organisations may, through different parts of their workforce, bid to undertake solicitors’ services under the new legal aid contracts. What occurred to me was the danger of a conflict of interest, whereby two parts of the same organisation are representing an offender and providing rehabilitative supervisory services. I am using this occasion to ask my noble friend for an assurance about the solidity of the Chinese walls that will be required to be put in place, and the monitoring of them, if these two parts of the Government’s proposals go ahead more or less at the same time and more or less hand in hand.

Lord McNally: My Lords, it is always a great pleasure to joust with the noble Lord, Lord Beecham, as he is such a well read man and we heard about the Kaiser “dropping the pilot”. However, I like to think that the Opposition’s support for the Bill, which he again gave fulsomely at the end of his remarks, is like the rope that supports the hanging man—in saying that, I look to Lenin rather than the Kaiser—and so he introduces another amendment which would at least throw a considerable spanner in the works, if not wreck the Bill.

I say to the noble Lord, Lord Elystan-Morgan, that I, of course, consider the noble Lord, Lord Ramsbotham, to be a saintly man. However, my reading of Lives of the Saints makes me well aware that one or two of them were quite capable of landing fairly lusty blows. Therefore, I have never equated saintliness or sanctity with pacifism or a lack of willingness to trade blows. If noble Lords read today’s opening speech of the noble Lord, Lord Ramsbotham, they will see that it contained a few lusty blows directed at the Secretary of State and the department, but is none the worse for that. I am sorry that, acting in their individual capacities and making up their minds individually, not a single Cross-Bencher managed to support me in the Division, as I understand it, but that is the nature of things.

The noble Lord, Lord Beecham, really should stop reading spy and thriller novels because his speeches are based entirely on sinister facts. As regards the FOI

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request, our refusal to release the relevant information was based on the criteria in the Freedom of Information Act, which the Labour Government crafted. As he well knows, that procedure gives the Government the opportunity to develop policy before premature disclosure occurs. As in the previous debate, the noble Lord saw all kinds of sinister motivations behind the use of a management tool which his Labour Government developed in Whitehall to allow those developing policy not to make predictions but to test possible dangers before making policy public. We have published the process of evaluation of our pilots at Peterborough and Doncaster and our justice reinvestment pilots. We do not have formal evaluation reports of the other pilots because they were discontinued. However, we have learnt from the process of designing the pilots and we are applying that learning process to the design of the new system. That is part of our policy development process.

I have known the noble Lord, Lord Elystan-Morgan, keep the House going for a long time over one wrong word in a piece of legislation so it is a little rich for him to ask what is in a word. I again make the point to the noble Baroness, Lady Hamwee, that we have given considerable assistance to small innovators in the voluntary and charitable sectors. We want to make sure that they play their full part. We are running a two-part £500,000 grant to voluntary organisations to overcome the barriers to their participation in the rehabilitation reforms. We will open up the delivery of probation services to a far wider range of potential providers, including the voluntary sector. We are keen to see partnerships between voluntary organisations or between private and voluntary providers coming forward for contracts. We continue to develop a strategy to support the voluntary sector to participate in future competitions and are working closely with the Cabinet Office to develop the capacity and capabilities of voluntary organisations to deliver payment by results contracts.

4.45 pm

The other point raised by the noble Baroness, Lady Hamwee, about Chinese walls is very valid and becomes more and more prevalent as various companies provide services across the criminal justice system. I assure her that if such Chinese walls are not already built into our system they will be. It is a very valid and important point.

I go back to the point raised by the noble Lord, Lord Elystan-Morgan, and myself that we are dealing with a considerable reoffending rate. Nobody puts it all at the door of the probation service. Nobody is accusing probation officers of not being up to the job. But when you have the kind of offending rates we have experienced—often called the revolving door—with prisoners coming out, often unsupervised, only to offend again, we are right to look at new ways and to try to bring in new ideas, new methods and new efficiencies to address this problem.

Amendment 2 would require the details of any system of payment by results to be laid before and approved by a resolution of both Houses before being implemented. It would also require the piloting of payment by results for three years, subject to independent evaluation and based on existing probation trust areas.

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As with Amendment 1, I ask noble Lords to consider the full effect of this amendment. It would mean that any system of financial incentives for organisations to reduce reoffending would have to be subject to this three-year pilot. That could mean a probation trust looking to subcontract delivery of a community payback with an element of incentive for providers, just as much as it can mean a wider system of payment by results.

I will not dwell on this but I want to underline the full impact of what I would call micromanagement by Parliament. We firmly believe that paying providers by results will drive them to focus on reducing reoffending so we can make a difference to reoffending rates. The need to do so is pressing. If I said £14 billion I will correct it as my notes say £13 billion, so another one up for the noble Lord, Lord Elystan-Morgan. He is still buoyed up by the glory of the Welsh contribution to the British Lions’ victory; that and a slippery pitch. That last bit will be erased from the record by my staff before it goes into print.

The nature of what rehabilitation providers will do means that we intend to pay them through a combination of payment by results and more traditional fees for services. In his merry and engaging way, the noble Lord, Lord Beecham, was suggesting that we would be standing at the gate with a bag of money dishing it out for the merest improvements in performance. We believe that this scheme will produce the best of probation treatment with the incentive brought by payment by results. I should emphasise that the Ministry of Justice has consulted carefully on our payment by results approach. Our February 2013 consultation, Transforming Rehabilitation—ARevolution in the Way We Manage Offenders, sought views on how to get the right balance between incentivising providers and transferring financial risk to them, and on how to ensure that providers work with all offenders, including the most prolific and the hardest to help. We listened carefully to the responses and, as the consultation response, Transforming Rehabilitation: AStrategy for Reform, published in May this year, set out, we have refined our approach in response. I am aware that the noble Lord, Lord Beecham, has been particularly concerned to ensure that providers are not able to neglect the offenders who are the hardest to help. As we have developed our payment by results approach, we have specifically sought to ensure that they are not.

We have not stopped looking at the design of our payment mechanism approach—I am aware of how important the details are to driving a reduction in reoffending. In May 2013, the Ministry of Justice published a draft Payment MechanismStraw Man document, which we are using in discussion with potential providers to make sure that we develop an effective final proposal. I will be placing a copy of this in the House of Lords Library so that it is accessible to noble Lords.

I say this again because noble Lords have been lured in that direction partly by the idea put about that we do not seem to have done any planning or consultation and that we have not put out information. We have been doing a lot of work, testing a lot of these ideas and bringing in a lot of experience and expertise, so let

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us not be lured into the idea that Parliament or the country is being asked to accept a pig in a poke here. This is a system where I think we shall be able to see some real success and where the returns of that success will be enormous.

We propose that the amount that providers are paid will depend both on the proportion of their offenders who have completely desisted from reoffending and on the total number of repeat offences committed by offenders. Therefore, providers cannot simply focus on those whom they can easily stop reoffending; they also need to work with the most prolific reoffenders and to keep working with offenders when they reoffend.

Since the House last considered this amendment, the Ministry of Justice has published the interim results from two of our continuing payment by results pilots. As the Justice Secretary said when the results were published, the figures from the pilot at Peterborough prison, which is the sort of approach we want to see rolled out to all offenders leaving prison, are very encouraging. They show a sizeable fall in reconvictions and clearly demonstrate that, with targeted support and help aimed at the right people at the right time, we can divert more offenders from a return to crime. We will continue to learn the lessons from these pilots as we develop our final approach.

In the light of those arguments and the continuing open approach to developing our payment mechanism, I ask the noble Lord to withdraw his amendment.

Lord Beecham: My Lords, I am grateful to the Minister and to other noble Lords for their contributions to this short debate. I begin with the question from the noble Baroness, Lady Hamwee, about the potential conflict of interest. If I may say so, it is potentially rather worse than the two instances that she gave because, in addition to the two services that she referred to, these contractors may be involved in two other areas. The first is increasing involvement with the police service and the second is the latest proposal for the privatisation of the courts. The whole spectrum of the criminal justice system could thus, in one way or another, come to be run by one of these bodies. Therefore, I think that there is real substance in the point that she made.

The noble Lord was kind enough to compare me with Lenin. Apart from the hairstyle I do not think that there is a huge resemblance. He referred to Lenin’s famous dictum about giving support to the social democrats that the rope would give to the hanging man. I would never do that, except possibly to Liberal Democrats, which is a rather different category.

However, there are more serious issues here. The noble Lord quoted with approbation the results of the Peterborough pilot—not so much the Doncaster pilot for fairly obvious reasons—and said that it has shown an improvement of 6%. That was true but it took the situation back only to the preceding year of the period. The crucial point is that the two probation trust pilots were terminated. We still do not know, because no Minister has condescended to tell us, why those two pilot schemes in Wales and Staffordshire in the West

25 Jun 2013 : Column 684

Midlands, run by the probation trusts, were terminated; not only that, Ministers will not give us the evaluation. Yet, in Peterborough and Doncaster, not yet halfway through the proposed piloting period, they disclosed results. I find that inconsistency wholly inexplicable.

On the question of payment, I am not asking for details of the eventual payment scheme, but for an indication roughly speaking of what percentage might be attributable to the results. What proportion are we talking about? Are we talking about 10% of a fee, something up to 20%, or somewhere in between? There is no indication at all of the proportions that the Government might be contemplating. It is nice to know that at some point information will be placed in the Library; it will be a little late for this House to use unless the Bill comes back from the Commons in a different form.

Moreover, in relation to piloting, I spoke in Committee of another pilot that the Government are conducting on drugs offences which will not report until 2017-18. The Government, quite rightly, have not produced evidence on that yet but they will not implement anything until those pilots are completed. That is the thrust of the amendment. I repeat that we want reoffending reduced. We like the notion very much of affording supervision to a great many more people. We are not convinced that the Government have the evidence yet on how to do it efficiently, effectively and economically. This amendment would help them to do that in a timescale that I repeat is less than the timescale of the various other pilots about which we have heard. I am afraid that the Minister has not given satisfactory answers to the questions that I and others have raised and I wish to test the opinion of the House.

4.57 pm

Division on Amendment 2

Contents 188; Not-Contents 209.

Amendment 2 disagreed.

Division No.  2

CONTENTS

Adams of Craigielea, B.

Adonis, L.

Afshar, B.

Allenby of Megiddo, V.

Alton of Liverpool, L.

Anderson of Swansea, L.

Armstrong of Hill Top, B.

Armstrong of Ilminster, L.

Bach, L.

Bakewell, B.

Barnett, L.

Bassam of Brighton, L. [Teller]

Beecham, L.

Bhattacharyya, L.

Bichard, L.

Billingham, B.

Bilston, L.

Blair of Boughton, L.

Blood, B.

Borrie, L.

Bradley, L.

Brooke of Alverthorpe, L.

Brookman, L.

Browne of Belmont, L.

Browne of Ladyton, L.

Butler of Brockwell, L.

Campbell-Savours, L.

Carter of Coles, L.

Chandos, V.

Christopher, L.

Clancarty, E.

Clark of Windermere, L.

Clarke of Hampstead, L.

Clinton-Davis, L.

Cobbold, L.

Collins of Highbury, L.

Corston, B.

Coussins, B.

Crawley, B.

Crisp, L.

Davies of Oldham, L.

Davies of Stamford, L.

Dean of Thornton-le-Fylde, B.

Desai, L.

Donaghy, B.

Drake, B.

25 Jun 2013 : Column 685

Dubs, L.

Elder, L.

Elystan-Morgan, L.

Evans of Parkside, L.

Evans of Temple Guiting, L.

Evans of Watford, L.

Falkland, V.

Farrington of Ribbleton, B.

Faulkner of Worcester, L.

Fellowes, L.

Filkin, L.

Foulkes of Cumnock, L.

Fritchie, B.

Gale, B.

Gibson of Market Rasen, B.

Giddens, L.

Golding, B.

Gordon of Strathblane, L.

Goudie, B.

Grantchester, L.

Grenfell, L.

Grey-Thompson, B.

Griffiths of Burry Port, L.

Grocott, L.

Hanworth, V.

Hardie, L.

Harris of Haringey, L.

Harrison, L.

Hart of Chilton, L.

Haskel, L.

Haworth, L.

Hayman, B.

Hayter of Kentish Town, B.

Healy of Primrose Hill, B.

Hollick, L.

Hollis of Heigham, B.

Howarth of Breckland, B.

Howarth of Newport, L.

Howe of Idlicote, B.

Howells of St Davids, B.

Howie of Troon, L.

Hoyle, L.

Hughes of Stretford, B.

Hughes of Woodside, L.

Hunt of Kings Heath, L.

Hylton, L.

Irvine of Lairg, L.

Janner of Braunstone, L.

Jay of Paddington, B.

Jones of Whitchurch, B.

Jones, L.

Judd, L.

Kennedy of Southwark, L.

King of Bow, B.

Kinnock of Holyhead, B.

Kinnock, L.

Kirkhill, L.

Knight of Weymouth, L.

Layard, L.

Liddell of Coatdyke, B.

Liddle, L.

Lipsey, L.

Listowel, E.

Lloyd of Berwick, L.

Low of Dalston, L.

Lytton, E.

McAvoy, L.

McCluskey, L.

McConnell of Glenscorrodale, L.

McDonagh, B.

McFall of Alcluith, L.

McIntosh of Hudnall, B.

MacKenzie of Culkein, L.

McKenzie of Luton, L.

Mar, C.

Martin of Springburn, L.

Masham of Ilton, B.

Massey of Darwen, B.

Maxton, L.

Mitchell, L.

Morgan, L.

Morris of Aberavon, L.

Morris of Handsworth, L.

Noon, L.

Nye, B.

Pannick, L.

Parekh, L.

Patel of Blackburn, L.

Patel of Bradford, L.

Paul, L.

Pendry, L.

Pitkeathley, B.

Ponsonby of Shulbrede, L.

Prosser, B.

Quin, B.

Radice, L.

Ramsbotham, L.

Rea, L.

Rendell of Babergh, B.

Richard, L.

Ripon and Leeds, Bp.

Robertson of Port Ellen, L.

Rogan, L.

Rooker, L.

Rosser, L.

Rowe-Beddoe, L.

Rowlands, L.

Royall of Blaisdon, B.

Sawyer, L.

Scotland of Asthal, B.

Sherlock, B.

Simon, V.

Smith of Basildon, B.

Smith of Finsbury, L.

Smith of Leigh, L.

Snape, L.

Stern, B.

Stevenson of Balmacara, L.

Stoddart of Swindon, L.

Taylor of Blackburn, L.

Temple-Morris, L.

Touhig, L.

Trees, L.

Triesman, L.

Tunnicliffe, L. [Teller]

Turnberg, L.

Uddin, B.

Wall of New Barnet, B.

Walpole, L.

Walton of Detchant, L.

Warnock, B.

Watson of Invergowrie, L.

West of Spithead, L.

Wheeler, B.

Whitaker, B.

Whitty, L.

Wigley, L.

Wilkins, B.

Williams of Elvel, L.

Wills, L.

Winston, L.

Woolmer of Leeds, L.

NOT CONTENTS

Aberdare, L.

Addington, L.

Ahmad of Wimbledon, L.

Anelay of St Johns, B. [Teller]

Arran, E.

Ashton of Hyde, L.

25 Jun 2013 : Column 686

Attlee, E.

Avebury, L.

Barker, B.

Bates, L.

Benjamin, B.

Berridge, B.

Best, L.

Bew, L.

Black of Brentwood, L.

Blackwell, L.

Blencathra, L.

Boothroyd, B.

Brabazon of Tara, L.

Bradshaw, L.

Bridgeman, V.

Brinton, B.

Brittan of Spennithorne, L.

Brooke of Sutton Mandeville, L.

Brougham and Vaux, L.

Brown of Eaton-under-Heywood, L.

Browning, B.

Burnett, L.

Byford, B.

Caithness, E.

Cathcart, E.

Chalker of Wallasey, B.

Clement-Jones, L.

Colwyn, L.

Cormack, L.

Cotter, L.

Courtown, E.

Craigavon, V.

Crathorne, L.

Crickhowell, L.

Cumberlege, B.

De Mauley, L.

Dear, L.

Deech, B.

Deighton, L.

Dixon-Smith, L.

Dobbs, L.

Doocey, B.

Dykes, L.

Eccles, V.

Eden of Winton, L.

Edmiston, L.

Elton, L.

Empey, L.

Faulks, L.

Fearn, L.

Fellowes of West Stafford, L.

Fookes, B.

Forsyth of Drumlean, L.

Fowler, L.

Framlingham, L.

Freud, L.

Garden of Frognal, B.

Gardner of Parkes, B.

Geddes, L.

German, L.

Glasgow, E.

Glentoran, L.

Goodhart, L.

Goodlad, L.

Grade of Yarmouth, L.

Green of Hurstpierpoint, L.

Griffiths of Fforestfach, L.

Hamilton of Epsom, L.

Hamwee, B.

Hanham, B.

Harries of Pentregarth, L.

Harris of Richmond, B.

Henley, L.

Higgins, L.

Hill of Oareford, L.

Hooper, B.

Howe of Aberavon, L.

Howe, E.

Howell of Guildford, L.

Hunt of Wirral, L.

Hussain, L.

Inglewood, L.

James of Blackheath, L.

Jenkin of Kennington, B.

Jenkin of Roding, L.

Jolly, B.

Jones of Cheltenham, L.

Jopling, L.

Kakkar, L.

Kilclooney, L.

King of Bridgwater, L.

Knight of Collingtree, B.

Kramer, B.

Laming, L.

Lamont of Lerwick, L.

Lawson of Blaby, L.

Lee of Trafford, L.

Lester of Herne Hill, L.

Lexden, L.

Lindsay, E.

Lingfield, L.

Linklater of Butterstone, B.

Loomba, L.

Lothian, M.

Lucas, L.

Luce, L.

Luke, L.

McColl of Dulwich, L.

MacGregor of Pulham Market, L.

Mackay of Clashfern, L.

Maclennan of Rogart, L.

McNally, L.

Maddock, B.

Mancroft, L.

Marks of Henley-on-Thames, L.

Marlesford, L.

Mawson, L.

Mayhew of Twysden, L.

Miller of Hendon, B.

Montgomery of Alamein, V.

Montrose, D.

Morris of Bolton, B.

Moynihan, L.

Naseby, L.

Nash, L.

Neville-Jones, B.

Newby, L. [Teller]

Northbrook, L.

Northover, B.

Norton of Louth, L.

O'Cathain, B.

Oppenheim-Barnes, B.

Patel, L.

Patten, L.

Perry of Southwark, B.

Phillips of Worth Matravers, L.

Plumb, L.

Popat, L.

Powell of Bayswater, L.

Randerson, B.

Rawlings, B.

Razzall, L.

Redesdale, L.

Renfrew of Kaimsthorn, L.

Ridley, V.

Risby, L.

Roberts of Llandudno, L.

Rodgers of Quarry Bank, L.

Roper, L.

St John of Bletso, L.

Sassoon, L.

25 Jun 2013 : Column 687

Scott of Needham Market, B.

Seccombe, B.

Selborne, E.

Selkirk of Douglas, L.

Shackleton of Belgravia, B.

Sharp of Guildford, B.

Sharples, B.

Shaw of Northstead, L.

Sheikh, L.

Shipley, L.

Shrewsbury, E.

Shutt of Greetland, L.

Skelmersdale, L.

Slim, V.

Smith of Clifton, L.

Spicer, L.

Stedman-Scott, B.

Steel of Aikwood, L.

Stephen, L.

Stewartby, L.

Stirrup, L.

Stoneham of Droxford, L.

Storey, L.

Stowell of Beeston, B.

Strasburger, L.

Taverne, L.

Taylor of Goss Moor, L.

Taylor of Holbeach, L.

Teverson, L.

Thomas of Winchester, B.

Tonge, B.

Tope, L.

Tordoff, L.

Trenchard, V.

Trimble, L.

True, L.

Tugendhat, L.

Tyler of Enfield, B.

Tyler, L.

Ullswater, V.

Verma, B.

Wakeham, L.

Wallace of Saltaire, L.

Wallace of Tankerness, L.

Walmsley, B.

Warsi, B.

Wasserman, L.

Wei, L.

Wheatcroft, B.

Williamson of Horton, L.

Woolf, L.

Younger of Leckie, V.

5.11 pm

Amendment 3

Moved by Lord Beecham

3: Before Clause 1, insert the following new Clause—

“Low, medium and high risk offenders

(1) For the purpose of the provision of probation services, the definition of a low, medium and high risk provider shall be prescribed by statutory instrument, which shall be laid before Parliament and subject to the affirmative resolution procedure of both Houses.

(2) For the purpose of the provision of probation services and supervision post release, the definition of a low or medium risk offender shall not include offences of a violent or sexual nature, stalking or domestic violence.”

Lord Beecham: My Lords, noble Lords will be relieved to hear that this is not an amendment on which I propose to divide the House. Rather, it is an attempt to try to elucidate some of the issues around the question of risk, to which I have previously referred. It is a matter on which the Chief Inspector of Probation has commented. In particular, she has drawn attention to the movement between risk categories, which is generally assumed to be in the order of 25% with a significant proportion moving from a lower to a higher risk. Indeed, studies carried out by the inspectorate show that as many as 50% of offenders change category. There is a real concern that, given this binary system, the information required to transfer from a low or medium risk to a higher risk category, which would involve a change in supervisor from the organisations that are to be contracted under the payment-by-results system—assuming that they are non probation service, as the Government intend—to the probation service as the body responsible for high risk offenders is, to put it mildly, unclear.

The potential problem is that the information may not be timely, if it is available at all. That may lead to high risk offenders not receiving the degree of skilled supervision which is primarily available from the probation

25 Jun 2013 : Column 688

service. What the amendment seeks to do, quite simply, is ask the Government to work through their proposals more substantively than so far appears to be the case with a view to defining the categories more clearly. In particular there is a suggestion that the definition should exclude from the low and medium risk categories those offenders who have been convicted of offences, as the amendment states,

“of a violent or sexual nature, stalking or domestic violence”.

Those should always be regarded as potentially of high risk. The effect would be that people in those categories would be supervised by the probation service. Given the nature of the offences, that seems to be a sensible precaution that will allow the service to monitor the offender and, as I indicated in the previous debate, to relate to the victims. These victims will clearly be vulnerable individuals and usually, although not necessarily, women. It is as much the job of the probation service to protect the safety of those people as it is to promote the rehabilitation of offenders.

Even if he cannot give assurances today, I hope that the noble Lord will consider coming back at Third Reading, perhaps with some formulation that would meet the objectives here. They are not at all inconsistent with the thrust of government policy but do identify a potential problem given the split of responsibilities to which we have referred and which we debated earlier. I hope that, in that spirit, the noble Lord will look at this issue again and respond in a way that would not only be satisfactory to your Lordships’ House but would meet the concerns raised, perfectly legitimately and forcefully, by the Chief Inspector of Probation. I beg to move.

5.15 pm

Lord Marks of Henley-on-Thames: My Lords, I will make one very brief point in relation to this. Of course, one has sympathy with the overall notion that it is important that the classification of offenders as low, medium or high-risk is carried out with a great degree of care. However, I would suggest that the classification reflected in the title of the new clause as proposed in the amendment,

“Low, medium and high risk offenders”,

is more likely to be accurate than the classification in proposed subsection (2) of the amendment, which deals with the classification of offences. The reason for that is found in the words of proposed subsection (2), which says that,

“the definition of a low or medium risk offender shall not include offences of a violent or sexual nature, stalking or domestic violence”.

That would mean that any ordinary common-law offence of assault, any assault occasioning actual bodily harm or any low-grade affray would take an offence out of the classification that would enable the offender to be classified as low or medium risk. These classifications need to be capable of fine-tuning and I have serious doubts whether it is appropriate for that fine-tuning to be given effect by a classification that merely considers the offences rather than the offenders.

Lord McNally: My Lords, this has been a brief debate but I fully appreciate and accept the point made by the noble Lord, Lord Beecham, that it is an important one and I hope that I can respond constructively.

25 Jun 2013 : Column 689

I thank my noble friend Lord Marks for his intervention. It is questionable whether the kind of fine-tuning in this area to which he referred is done at arm’s length. It is done by the professionals on the ground.

The noble Lord, Lord Beecham, has referred in a number of his interventions to the Chief Inspector of Probation, Liz Calderbank, and the concerns that she has expressed. I make it clear that we have carefully considered the points she has made in response to our consultation. Our strategy document specifically sets out how we will seek to ensure that some of her concerns are met. The Secretary of State has met the chief inspector to discuss her concerns and she will continue to make an input as we develop this policy.

Another point made by the noble Lord, Lord Beecham, was the importance of victims. We share that concern. We are retaining the victim liaison role for all cases to which it applies. We are committed to ensuring that the reformed system is responsive to the needs of victims, and we decided it was right that the public sector should continue to exercise its experience and professionalism in conducting this role.

In discussing these areas, it is easy to exploit public emotion and concern when one refers to sex offenders, murderers or rapists. Let us be clear: every offender who poses a high risk of serious harm to the public will continue to be managed by the public sector probation service. Public sector probation professionals will decide on the allocation in each case. They will retain management of every offender who poses a high risk of serious harm to the public and every offender who falls under the multiagency public protection arrangements—or MAPPA. We will not get into second guessing the judgment of probation professionals about who poses a high risk of serious harm but we will have a very clear set of rules.

The public sector will have overall responsibility for public protection and the Ministry of Justice will ensure the effective management of risk of serious harm. We will set out clear expectations and standards in service level agreements and contracts with both the public sector probation service and market providers. Day-to-day responsibility for managing the risk of serious harm that an offender poses sits with the organisation allocated the case management according to the standards set. This will be the public sector in the case of those who pose a high risk of serious harm and contracted providers in the case of those whose risk of harm is assessed as medium or low.

Let me reassure noble Lords that this matter of risk has been foremost in our minds when designing the new system. Although the majority of offenders will in future be managed by contracted providers, we are clear that every offender who poses a high risk of harm to the public will continue to be managed by the public sector National Probation Service. We are also clear that it will be professionals in the National Probation Service who assess the risk posed by every offender at the outset. By the way, I take pride every time I read the words “National Probation Service”. One of the good things that will come out of these reforms is a National Probation Service with the esteem and professional recognition that it deserves.

25 Jun 2013 : Column 690

We have already recognised that the public will want reassurance that those who have committed the most serious sexual and violent offences will be managed by the public sector probation service. That is why we have said that anyone managed under multiagency public protection arrangements will remain with the public sector, whatever their risk level. That includes offenders who have committed serious sexual or violent offences and other offenders who may cause serious harm to the public. The proposed amendment would go further, requiring all those who have been convicted of violent or sexual offences, stalking or domestic violence to be treated as high risk regardless of the length of sentence imposed. Many of those individuals will already fall to be managed by the National Probation Service under MAPPA, but we believe that a blanket approach like this goes too far and would not be effective in identifying those individuals who need the most careful management. Indeed, it would mean major changes to the way the current probation framework deals with offenders. While I am sure that is not the noble Lord’s intention, I hope it will help if I explain how risk is assessed and managed, and why this amendment would cut across professional discretion.

Assessing and managing the risk posed by offenders is a complex job involving a great deal of professional expertise. It needs to take a wide range of circumstances into account. The offence of which an offender has been convicted is only one of the relevant factors and is not always a good indicator of risk. There will be many others: age, criminal history, education, employment, substance misuse, interpersonal issues, and accommodation status, for example.

It is vital that the experienced professionals can use their expertise to make the right decisions to protect the public. I believe that it should be those practitioners, rather than Parliament, who should decide what constitutes a high risk of harm. Automatically deeming high risk an offender who has committed a particular offence could mean subjecting that individual to supervision that is significantly in excess of what is warranted. Indeed, there is a possibility that for low-risk offenders, providing overly heavy supervision and intervention might actually increase rather than decrease their risk.

It might also provide some reassurance if I set out in more detail how the process will work once the initial allocation has been made. During our consultation, we were told that splitting the management of offenders between the National Probation Service and the contracted providers would require clearly defined responsibilities and accountabilities at every level and a clearly defined process for managing rapid changes in offender risk. We agree, and we have built those into the design of the new system.

We are developing a risk management system that is both proactive and responsive to changes in risk. At the heart of our system is the recognition that at an operational level those managing an offender must have day-to-day responsibility for managing the risk of harm posed by that offender. This will be the National Probation Service in the case of those who pose a high risk of serious harm and contracted providers in the case of those whose risk of serious harm is assessed as medium or low. However, we also recognise that risk

25 Jun 2013 : Column 691

of serious harm can change during the course of a sentence, and we are putting a series of safeguards in place to ensure that changes in risk are picked up and appropriately acted on and that responsibilities are clear at every level.

We will pursue an approach that will build on existing good practice. We already know that good quality offender management practice supported by clear policies and close multiagency work are the necessary building blocks for effective risk management. The new National Probation Service and providers will be required to interact and work together to ensure a cohesive approach to managing risk.

I turn to the detail of the process we envisage. The National Probation Service will conduct an assessment at the outset, which will determine who manages each offender. It will be the National Probation Service in the case of those who pose a high risk of serious harm, and contracted providers in the case of those whose risk of serious harm is assessed as medium or low.

During the course of the sentence, providers will be required to risk-manage the offender within their case load We will place contractual obligations on providers to ensure that they have appropriately trained staff and organisational policies for the management of risk of serious harm. Where there is a significant change in circumstances that indicates an increase in the risk of serious harm, the contracted provider will be required contractually to refer the case to the National Probation Service. It will be for the National Probation Service to confirm whether the risk of serious harm is high.

If a decision is reached that the risk of serious harm has escalated to high, the responsibility for the management of the case will transfer to the National Probation Service. Where case transfer happens, this will be achieved in such a way that it does not destabilise the offender. Involvement with the provider could continue, while the case responsibility will be with the National Probation Service.

I am confident that the measures that I have outlined will provide a robust system. I understand that noble Lords share that desire to ensure that the new system builds and improves on the good practices that now exist. However, I come back to the point that it is the skilled and experienced practitioners in the public sector National Probation Service who are best placed to make the risk decisions.

As I said at the beginning, I welcome this intervention, particularly with the noble Lord’s assurance that he does not intend to divide on this amendment. I make no apologies for going into detail in my reply, which I hope will be of assistance to him and to the House in seeing how we are developing this matter.

5.30 pm

Lord Beecham: My Lords, I am grateful to the Minister for that very full explanation of the Government’s approach, and I derive a reasonable degree of comfort and assurance from it. I am not entirely convinced by the concept of the National Probation Service as an improvement on the more localised service that is

25 Jun 2013 : Column 692

currently being delivered through probation trusts at local level. I was not a great admirer of the previous Government’s decision to create the National Offender Management Service either. The Minister and I are apparently at one about that.

Lord McNally: I remember our debates on that decision. Part of the problem with the last reorganisation was what we said at the time would be the downgrading of the probation service by having no national voice. That is the real win in this reorganisation: the probation service being where it should be, at the top table and with direct access to the Secretary of State.

Lord Beecham: I can certainly see the case for an arrangement of that kind, but the operational workings of the service are better driven at a more local level, with the service being involved in the relevant areas— as I said, I think there are 35 at the moment—by engaging with the other partners, which are a necessary part of dealing with the problems of offenders. That includes magistrates, who I understand will no longer be involved in this process, and there is some concern about that among magistrates. It also includes other government departments, such as the DWP, local authorities and the voluntary sector operating at a local level.

I continue to have reservations about the nationalisation of the service, as it were, which again might differentiate me from Lenin. I am reasonably assured by the process that the Minister describes, but on the more substantive issue I still have some anxiety, which may be shared generally, about the process of identifying a change of category and the reference upward to the probation service, however constituted, particularly if there was a large jump from a lower-risk case, which might well be supervised by a contractual or voluntary organisation at a comparatively low level of skill, which might make it more difficult to detect the change. Without suggesting further pilots, since these are not in fashion at the moment, it would be helpful to hear from the Minister at some point, perhaps just informally, whether the transition will be kept under review and an effort made to collate the experience across this scheme to see how it works over a reasonable period.

The other question that arises is how this arrangement of transfer will affect the contract. I suppose it should not be assumed that a transfer of risk necessarily means that the provider has failed in their contractual obligation, because there might not be another offence. Again, I appreciate that we are talking about cohorts, but there are some significant numbers here. Given that 250,000 people are to be involved, I do not know how big the cohorts are to be. I am not asking for an answer to this now—again, perhaps it could be by letter—but if there is a change of category so that at different times you have two separate organisations with responsibility for part of the cohort, how will that impact upon the payment system? Are there any incentives, perverse or otherwise, in that context? For example, if somebody was a bit difficult at the lower level and if there are large numbers, it might be convenient to move them up to the probation service. Will that have an implication for the funding?

25 Jun 2013 : Column 693

That is a rather separate point, I admit, and not covered by the precise terms of the amendment, but it is perhaps worth exploring. However, in the circumstances I beg leave to withdraw the amendment.

Amendment 3 withdrawn.

Clause 2 : Supervision after end of sentence

Amendment 4

Moved by Baroness Linklater of Butterstone

4: Clause 2, page 2, leave out lines 11 and 12 and insert—

“(a) the offender was aged under 18 when the sentence was passed,”

Baroness Linklater of Butterstone: My Lords, Amendment 4 is in my name and those of my noble friends Lord Marks, Lady Hamwee and Lord Dholakia. I will also speak to Amendments 6 and 15, which have been grouped with it.

The purpose of this amendment is to exclude anyone aged under 18 on the day of sentencing from the new supervision period of one year by a new provider of probation services, even after they have turned 18 and before the detention period has come to an end. Currently, sentencing for under-18s includes a detention and training order which requires the young offender to serve half their sentence in custody and half in the community. Only those sentenced to at least two years on a DTO are required to do 12 months on supervision. However, the Government’s new proposals are that all those young people will be required to do 12 months on supervision, even if they have had only a six-month DTO and if they are over 18 at the end of the custodial period. Thus, they would be transferred from the YJB and YOTs to an unknown private provider, with all the demands and expectation of adults. That would run directly counter to current practice.

I must declare an interest in and an admiration for the work of the Youth Justice Board, whose work I have followed for many years and which is responsible for the administration of services for young people in trouble with the law. I am sure that your Lordships will not need persuading of its levels of experience, professionalism and skill, which have been developed and honed in working with this challenging and vulnerable group, particularly in the past few years. Most of us have been parents of adolescents but we cannot even guess at the breadth and depth of the difficulties that characterise the lives and problems of this group. They are young adults who, because of the date when they turn 18, are required to be transformed into people of whom the expectations become quite different.

In fact, all the evidence is that this exceptionally vulnerable group of young people have many issues, which we have rehearsed on these Benches regularly, and which consist of multiple deficits in their difficult lives. They need highly skilled, professional help if they are not to get into even deeper trouble and increasingly make the lives of the rest of us more difficult through reoffending. I will give just one statistic to illustrate the counterintuitive vulnerability of this group, which

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is that 18 to 20 year-olds account for about 9.8% of the custodial population but nearly 20% of all who self-harm. These are very vulnerable people. The YJB is the highly professional and specialist body whose expertise is widely acknowledged in dealing with this group, and for the range of collaborative work it does with other agencies where issues and needs overlap, including family and children’s services. It is impressive how these working partnerships have evolved over time to address the complexity of the difficulties of these young people.

As well as the range of offending, crucial to this age group in particular is the skill in dealing with issues of transition. This includes the process of moving from the youth justice system to the adult justice system at a stage in the life of these young people when they are particularly vulnerable. The YJB is quite clear when it says that this is a high-risk group with significant needs that requires skilled support from statutory agencies, in particular, from the probation service. The Government have clearly acknowledged that management of risk is where the probation service still has a clear role, and this group is characterised by high risk. Managing transition and managing risk go hand in hand, and I hope that the Minister can confirm that this area, which has not been properly clarified so far, will indeed continue to be choreographed jointly by the YJB, YOTs and probation, which would be in all our interests.

Evidence shows that where transitions are not appropriately managed, breach and reoffending follow. The converse is also true: when good, expert partnership working is in place, which is needs-led and flexible, especially at times of transition, the time of heightened risk, outcomes are better, breach is lessened and all of us are safer. The YJB is working towards transition before 18 is reached and then beyond. It plans, it works ahead and it knows what it is doing. It recently published an impressive youth-to-adult transitions framework, which I am sure would impress the Minister, and a youth-to-adult portal, which is used to transfer a young person’s information securely from a YOT to probation. Private providers are not legally able to work with under-18s, even if they had the skills and experience, and I reiterate that continuity and consistency are vital with this age group.

When we discussed this issue in Committee, the Minister undertook to take it away and consider the matter again. Given the enormous weight of evidence of the success of the current arrangements, which take account of all the evidence of the need for skill, experience and flexibility of partnership working which has now been established between professionals, I hope that he will feel able to give the House some reassurance that it will not be thrown away in favour of an untested and untried new idea.

Amendment 6 is a continuation of the argument I made earlier and relates to the arrangements to be made for the supervision of offenders who were under 18 when sentence was passed. It would mean that they would automatically be the responsibility of the local youth offending team until such time as they became 18, with the assumption hitherto that continuity is all-important and that the YOT’s work would be likely

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to continue. This amendment specifies that the supervisor could be either an officer of a provider of probation services or, for people sentenced as juveniles, a member of the youth offending team. I hope that this amendment will endear itself to the Minister because it opens up the possibility that there could and, indeed, should be room for discretion in the supervision of young adults. It implies some form of mutual discussion and planning between the YOTs and the new probation service providers for the future supervision of a young offender who has passed his 18th birthday. He is already known to the YOT, which has done all the relevant work to realise positive transitions in various relevant aspects of his life and for whom his life is entering a potentially challenging and difficult stage. Relationships are therefore all-important. This is an area that has had very little examination, but the long-held assumption has been that there will be as much continuity as possible, that plans will already be in place to be carried through and that important relationships will be established. It is to be hoped and expected that these issues will be recognised and discussed and that planning will be taken forward with the agreement of all parties. To do otherwise would be to create damaging rather than helpful planning for the young person. I am not aware of any discussion on this period of transition involving these two agencies, yet it will be crucial that the continuity of work with the young person, which has always been pursued hitherto, is acknowledged and discussed and the vital discretion of the youth offending teams is taken into account.

5.45 pm

One of the problems in understanding the Government’s expectations of what the new providers of probation will look like is the absence of any kind of detail. It is extraordinary, given that they are to be given an enormous, hugely responsible role for a very large number of particularly challenging and vulnerable young people. I am aware of the updated impact statement issued by the Government last week, and I will discuss it on my next amendment. I would be grateful if the Minister could clarify the Government’s thinking on this transition. What is the view on continuity, planning, responsibility and relationships, and where will the appropriate discretion lie? It could make or break the future of a significant element of our next generation. I look forward to the Minister’s reply on that issue.

Finally, Amendment 15 relates to an offender who will be aged under 21 on the last day of the supervision period. I know this amendment looks as if I am whistling in the wind because I do not hold out much hope of a successful outcome, but none the less it represents an important ideal to me. It aims for continuing provision by the Youth Justice Board for all young offenders until the age of 21 and therefore continuity of provision, planning, support and all the skilled input by the range of professional agencies under the umbrella of the YJB. This what practitioners of all kinds active in this field believe is the ideal way forward because it holds out the most realistic chance of turning around the lives of this most challenging group of offenders.

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As short-term, low-level offenders, part of the revolving door, this group has never had regular help or support from the probation service. It has not had responsibility for them, so this group has most significantly contributed to the reoffending figures. My fear is that the Government do not really understand or believe just what a challenge these young people represent, what a real, deep-seated mess they are in and how much time, care and persistence of support they need when they so readily offend. They find change and transition of any kind very difficult and many of them are immature and vulnerable. This is not a short-term issue, but a complex, multifaceted range of issues that takes real skill and persistence to turn around. Chris Grayling is right that long-term support is necessary, but of a skilled and multiagency kind, which I think is not what he has in mind.

Just last week, the Government published an updated impact assessment, which is still only partial and long overdue. It highlights the significant risks of breach and recall to custody that the new plans bring in their wake. It acknowledges that,

“offenders released after serving custodial sentences of less than 12 months are more likely to be petty offenders, more likely to have drug-related issues, more likely to be unemployed and in general more likely lead more chaotic lives. In absolute terms this difference is difficult to quantify, but our best estimate is that offenders released after serving custodial sentences of less than 12 months are, for behavioural reasons, 35% more likely to breach than offenders released after serving 12 months or more. Our lowest estimate is that they are 10% less likely to breach, and the highest estimate that they are 50% more likely to breach”.

Overall, it estimates,

“around 13,000 offenders recalled or committed to custody, giving a prison place increase of around 600 additional places, at a cost of £16m per year…This gives a best estimate of the cost of breach for offenders released after serving custodial sentences of less than 12 months of £24m per year”.

This is terrifying reading, but it shows the depth of the problem. We know that community-based penalties are more likely to have a better outcome than imprisonment. Nowhere is this more true than for this particular cohort of extremely vulnerable, dysfunctional young people. We also know that we face a crying need for properly qualified people to deal with the issues these people represent.

The YJB sent me some encouraging examples of what it is doing with this group, such as the enhanced transitions service, which is happening in Reading. This involves YOT staff and specialist officers in the probation trust working together, selecting young people based on need, family background, maturity and cognitive ability, and working together for six months before transferring the young person to probation. The result in this case is that the breach rates of the vulnerable young people decreased by 45%. It is a lot of work and it does not come cheap, but the best estimate of the cost of breach in terms of around 600 additional prison places is £16 million per year. We are told that commercial confidentiality prevents the Government publishing the costs of the proposed way forward in the Bill, but we know that the cost of these damaged young people’s lives is even greater and more challenging.

This amendment modestly suggests that these young offenders sentenced to a DTO should have continuity of their oversight by the specialist youth offending

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services until they are 21, in the knowledge that this offers the best chance of reducing their reoffending in the future. I beg to move.

Lord Ponsonby of Shulbrede: My Lords, I support the noble Baroness, Lady Linklater, in the general thrust of her amendments. Her introduction made clear the vulnerability of this group of young people and its importance in terms of their being very likely to reoffend. She also made the point very forcibly about the excellent work done by the youth offending teams, and that is something which I see very often.

It is my understanding that currently the youth offending teams can agree to continue working with any young person who turns 18 while they are sentenced. They will make that decision based on how well they know the young person. In my experience, if they know them even relatively superficially, they will commit to carrying on working with them for the very reasons that the noble Baroness, Lady Linklater, has given, such as the benefits of continuity and continuity of supervision.