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Revised Funding Code

rose to move, That the draft code laid before the House on 14 June be approved. The noble Lord said: My Lords, the changes to the Legal Services Commission funding code were considered in Committee in another place on 18 July and agreed. The funding code, which is created under Section 8 of the Access to Justice Act 1999, sets out the types of legal services that can be supported by civil legal aid. The funding code criteria and procedures are being modified under Section 9 of the Access to Justice Act 1999. That section requires any changes to the code criteria—as here—to be approved by both Houses of Parliament before coming into effect. This is done by laying the revised funding code before each House, rather than by tabling amendments. The revised funding code before the House introduces three changes to the operation of legal aid in family cases. The first introduces new levels of service in private law family cases and care proceedings. The second concerns the removal of residential assessments from the scope of disbursements payable by the legal aid fund. The third concerns the application of an existing test to childcare cases to ensure that separate representation is granted only where it is necessary in an individual case. The first set of changes to the funding code comprises changes to the levels of service for family legal aid, which are primarily intended to support the fee scheme for providing help in family private cases—cases occasioned by relationship breakdown and often involving issues of child contact or the distribution of assets. The new levels of service for legal aid in family cases are intended to support and to place greater emphasis on pre-court dispute resolution work, following arrangements piloted by the LSC over the past two years. Of course, I can reassure your Lordships that, where alternative methods of resolution are impractical or inappropriate—for example, where there is an application for an injunction for protection from harm—legal aid is still provided for legal representation at court. I can assure your Lordships that the legal aid reform programme, of which these changes form a small but important part, has been subject to extensive consultation with practitioners, representative bodies and other interested parties. A full three-month public consultation took place last year on the legal aid fee schemes, and the family fee schemes and childcare changes were the subject of a separate further consultation this year. There has also been significant parliamentary scrutiny of our reform programme, with a full debate in another place in January and three separate debates in Westminster Hall this year alone. Alongside those debates, there has been a detailed report by the Constitutional Affairs Select Committee, to which the Ministry of Justice responded on 22 June. I do not wish to rehearse the issues raised once again, as the changes to the funding code do not themselves implement any of the new civil legal aid fee schemes. That will be done by amendments to the legal aid contract signed by providers and by regulations that will be laid before Parliament later this year. The second set of changes being made to the funding code concerns the removal of residential assessments from the scope of disbursements payable under legal aid. These changes are directed towards the objective, supported by many of those consulted on the legal aid reform programme, of ensuring that limited legal aid funds are applied only to their proper purpose of ensuring a fair outcome to a legal case. The issue here concerns the residential assessment of a child, sometimes of a whole family, which can be conducted over a long period—sometimes up to a year—in order to determine the most appropriate way forward in childcare proceedings. They can be very costly, although they are undertaken only in a minority of cases. Until a few years ago, it seemed fully accepted that commissioning and paying for such an assessment was for the local authority. Local authorities have a duty under the Children Act 1989 to safeguard and promote the welfare of children in need generally and, specifically, the welfare of children in their care after an interim care order has been made, but there has been an increasing number of cases in which courts have ordered a residential assessment, with the costs to be shared among all parties. Since a typical childcare action involves two or three legally aided parties, plus the local authority, that means that most of the costs will be met from legal aid. We believe that that cannot be right. Legal aid should not be paying for therapy, education or rehabilitation; they are for the local authority as part of its duties to a child in need. If a local authority takes the view that a residential assessment offers a good chance of enabling rehabilitation safely to take place, perhaps without the need for a care order, it could offer the prospect of an improved outcome for the child and very much reduced costs for the authority on account of avoiding long-term care. Therefore, the right body to take responsibility for the decision on a residential assessment and for its costs is the local authority. Of course, a court which considers that a local authority has failed in its duty can order it to take appropriate action. A previous funding code change in 2005 sought to exclude the costs of treatment, therapy and training from legal aid. However, it has not proved effective, since residential family centres—the main providers of family assessments—do not make a clear distinction among the various kinds of work that they offer. Accordingly, it is now proposed to exclude residential assessments completely from the scope of legal aid funding. The change is supported by many practitioners, the Law Society and the Legal Aid Practitioners Group. The third set of changes concerns the application of an existing test to childcare cases to ensure that separate representation is granted only where it is necessary in an individual case. This criterion, which already applies to every other category of case covered by the funding code, allows funding to be refused where there is no need for separate representation, in particular in the light of other parties already represented in the proceedings. The Government and the LSC have taken account of the view expressed in consultation and are not proceeding with the most substantive part of the earlier proposals to introduce a form of merits criterion for funding parties in childcare cases. The LSC recognised the view put forward by consultees, which was that parents can become disengaged from childcare proceedings at different stages and for different reasons so there are difficulties with the merits test in those circumstances. Instead, we have maintained the current entitlement system for certain parties in childcare cases, subject only to applying the tests that I have described to those cases. While it is important that separate funding is not granted where it is unnecessary, I assure noble Lords that where it is necessary—for example, due to a conflict of interest—it will continue to be granted, even under these new arrangements. I hope that the House has found this explanation of the revised funding code of help. The work done in this limited area of the legal aid reform programme is an example of the effort that is being made to create a legal aid system that delivers the maximum benefit and makes the best use of the resources available. I commend the revised funding code to the House. I beg to move. Moved, That the draft code laid before the House on 14 June be approved. 21st Report from the Statutory Instruments Committee.—(Lord Evans of Temple Guiting.)