Scottish Civil Justice Council and Criminal Legal Assistance Bill: Financial Memorandum
Item 5 is consideration of the financial memorandum to the Scottish Civil Justice Council and Criminal Legal Assistance Bill. I welcome to the meeting Colin McKay and Ondine Tennant from the Scottish Government bill team. Do you have an opening statement for us?
Colin McKay (Scottish Government)
No, but we are happy to take questions.
Oh, God—straight into questions. I will fire away then.
I want to comment on the submissions to the consultation. Consumer Focus Scotland said that it
“did not think the SCJC would be able to undertake the range of functions identified without significant additional resources being committed by the Scottish Court Service ... In its early life, the SCJC is likely to have a substantial workload preparing the rules required to implement the reforms of the civil courts.”
It went on to say:
“We are disappointed that remuneration of Council members is not included in projected costs of the SCJC, despite such remuneration being permitted by the Bill”
as
“this may be a key means of opening up the membership to people not otherwise in a position to apply for such a post.”
Will you comment on those points?
Certainly. On the first point, obviously the more resources the civil justice council has, the more it can do. The estimated costs that we have put in the financial memorandum for the council to do its normal state functions and the projected costs for the implementation of the civil courts review, should Parliament pass that legislation, are pretty frugal. That reflects the fact that public finances are under tremendous strain. We have had to pare down the costs to what we think are the minimum that we can afford while allowing the council to have the impact that it needs to have.
There are a host of civil justice issues that I am sure a council could usefully devote time to, if it had more resources. However, given the difficulty in finding money for new functions, we feel that we have allowed the council enough resource to do the things that it needs to do. In his submission to the committee, Lord Gill has confirmed that he is content that, within those parameters, the financial details are reasonable. We worked closely with the Lord President’s private office to develop the costs of the CJC.
On your second point, about remuneration of council members, as I understand it there has not been a tradition of remuneration of members of the current Sheriff Court Rules Council and Court of Session Rules Council. We recognise that there may be people who genuinely cannot be expected to do the work for nothing, which is why the bill makes provision for that. The Lord President may be minded to provide remuneration for certain members of the council.
However, the reality is that most of the people on the council will be on it in connection with their professional or personal roles, for example solicitors or advocates. I am not sure that we would want to make a commitment at the moment that those people would get paid, or certainly not that they would be paid at the rates that they would normally expect to be paid for their time. The Lord President will have to strike a balance between the desirability of remuneration for some members of council and other pressures on the council’s budget.
Ondine Tennant (Scottish Government)
We worked out how much the maximum remuneration might cost the council over a year, based on quite regular meetings, which would be once a month for council meetings and once a month for committee meetings. Assuming a maximum of 12 eligible members for remuneration, the bill carves out additional payment for certain members, such as the judiciary, on top of their current salaries. We calculated that as possibly up to £72,000 a year, depending on the level that remuneration was set at. We used the sum of £250 on the basis of the current levels of other remuneration—for instance, for the Judicial Appointments Board—but the figure could be reduced if the remuneration were for a financial loss rather than a set payment. That was just to emphasise that the figure could range to quite high levels.
Some individuals could get remuneration, but not all.
That is certainly possible under the bill.
The Scottish Court Service has said that Scottish ministers’ proposals
“should include consideration of the future costs associated with supporting the work of the SCJC beyond its initial period of operation.”
Do you have any comments on that?
I think that the proposals do that. We have set out a steady-state cost of the SCJC, which is a modest increase above the current cost of the two existing rules councils to reflect the policy function that the SCJC would take on. Separately, we have allowed for what we anticipate would be the cost of the major project of implementing the Gill reforms, should those be legislated for.
The Gill reforms will take several years to work through the system, and quite what the civil justice system will look like in six or seven years is difficult to estimate. Nevertheless, as far as we can, we have estimated what the body doing the kind of things that we think that it needs to do would cost either if the Parliament did not legislate for Gill—although the intention is clearly to do so—or once the Gill work was completed.
Legal aid is an important issue given the likelihood that people will be asked to make a contribution. The Scottish Government considers that, in the current “challenging financial circumstances”, those who can afford to contribute towards the cost of their criminal legal aid should do so. It believes that introducing contributions could save up to £3.9 million a year. However, it seems to me from looking at your figures that about 83 per cent of people will not have to make contributions. Only those above a certain level of disposable income or capital will be asked to pay a contribution.
Although I have read through the documents and have seen some figures, it is not entirely clear to me who will and who will not be asked to make a contribution. Can you elaborate a wee bit on the level that we are talking about? I realise that you cannot give hard and fast details, as the calculation will take into account individual circumstances such as family size and responsibilities, but what is the ballpark figure that we are talking about? What is the level at which people will have to make a contribution to their own legal aid costs?
As you say, it is slightly difficult to express that. The figures that are set out in the financial memorandum relate to the figures that are used currently to assess contributions. As you will be aware, people who are in receipt of civil legal aid are already assessed for a financial contribution. Indeed, in some criminal cases, people already pay a contribution under the assistance by way of representation—ABWOR—scheme. By and large, those are people who are pleading guilty rather than not guilty. Therefore, the idea of a contribution towards legal aid costs in the criminal legal system is not totally new.
The figures that are used in the financial memorandum have had to be adjusted so that we can harmonise the different schemes. The threshold that is set out in paragraphs 158 and 159 of the financial memorandum is a disposable income of £68 a week—that is the level at which someone would start to pay a contribution. Unless there are particular circumstances, if someone’s weekly disposable income is over £222 they will be ineligible for legal aid. Those figures sound quite stark, and I know that it has created some anxiety among members of the legal profession that people who are pretty poor will be making a contribution. However, it is important to bear in mind that those are net figures for disposable income after various outlays have been taken into account, including childcare costs and mortgage or rental costs. Everybody’s outgoings are different, so it is difficult to give you an average gross figure for the money that people need to have coming in for them to be eligible to make a contribution. In most cases, it is likely to be substantially more than £68 a week, which will be the amount of money that they are genuinely able to dispose of and which could be used to contribute towards their costs.
Yes, I saw those figures under paragraphs 158 and 159; I was just looking for a wee bit more information. You have mentioned mortgage costs and childcare costs, but I imagine that people will want to know whether they qualify for legal aid, which I suppose they will if the proposal goes through. However, could you put more meat on those bones with regard to what is included and what is not included in terms of disposable income?
I doubt that I can give you much more information at this point, beyond what is in the financial memorandum. I should apologise for the fact that my colleague, Karen MacIvor, who was due to give evidence on the legal aid aspects of the bill is not here today, but she is unwell. We would be happy to give you details of what the board currently treats as outgoings that are taken off the calculations. That should give you a clearer picture of what that would mean.
Obviously, everyone would sign up to the goal of improving the civil justice system. Fortunately, I have never had direct experience of the courts but, speaking to family members or friends who have been witnesses or jurors or earn their living in the court system, I am aware that there is a concern that there is a lack of efficiency and that we need to get more value for money from our judicial system. I am also aware that, sometimes, we must spend to save—that there are some additional costs that must be met in order to arrive at something that, in the fullness of time, will achieve some savings. The financial memorandum suggests that there would be increases for the first two or three years but that there would be decreases thereafter as a result of efficiency savings. However, it is also concerning that the financial memorandum says:
“It is not possible to estimate the costs the new Council will incur in taking forward the rules changes for civil courts reform before legislation in that regard is passed by the Scottish Parliament.”
How can you convince us that we are not buying a pig in a poke?
When it says, “It is not possible”, you must remember that we have done the best we can to give fairly detailed estimates of how many staff will be needed to take forward the reforms as we understand them. The point that we are making is that the Parliament might choose to legislate in a different way from what we currently envisage. The Government has set out a response to the Gill review and we have set out how we intend to take those things forward but, clearly, we do not know what will end up as legislation, so we cannot be entirely clear about what the outcome of that will be.
That said, much of what happens depends not just on what is in the legislation but on how quickly it is implemented and how it is phased in. There is scope for the Scottish Court Service to manage and husband its resources in a way that will allow it to phase in the reforms over a period of time, should that be necessary.
Our expectation is that the cost will not substantially exceed to any appreciable degree the ranges that are given in the financial memorandum. We think that that is adequate to implement the reforms.
The pig-in-a-poke aspect concerns the fact that it is not us who will deal with the bill but Parliament—ultimately, it is Parliament that will approve the financial memorandum for the courts reform bill, which will include whatever costs are to be borne as a consequence of the legislation, and that will include any implications for the civil justice council.
I should say, also, that we intend to introduce the bill as a draft bill for consultation before it is introduced to Parliament, so there should be an extensive opportunity for all the stakeholders to consider the implications of the changes.
As I said, I understand that, sometimes, there have to be some initial costs—there is no question about that. However, we have to test whether those initial costs will be around the area that the financial memorandum suggests that they will be and that the on-going costs are not going to miss the target. The convener referred to Consumer Focus Scotland’s evidence. It has some major concerns because, if the council is to be properly funded to make the changes that will come about, the initial set-up costs may be greater than the financial memorandum suggests.
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If the figure in the financial memorandum can be argued for, legitimised and sustained, that will make the memorandum more robust and will mean that we will have more confidence in it. However, Consumer Focus Scotland believes that, with the level of funding that has been set, the council will be nothing more than a rule-setting body, which means that it will not achieve the savings that have been set for it in the longer term.
Do you understand the concern that, if we do not get the costs right at the outset, the council will not achieve its aims regardless of how well the bill is drafted and we will not get the reformed and more efficient judicial system that we all want?
Yes, I appreciate that. However, I am not aware that Consumer Focus Scotland identified any particular comparisons or any basis for its concerns other than the general sense that the figure was not as much as it might have hoped for the council to do the business. We examined the costs of the two current rules councils, which will be merged into the single body, considered the costs of the Civil Justice Council in England and Wales as the best comparator and came up with a set-up that is relatively lean but which will have additional capacity to implement changes in the rules.
On the point that you rightly make about investing to save, the larger part of the investment for courts reform will not be in the proposed Scottish civil justice council; it will be in, for example, information technology systems, judicial training and, potentially, changes to the court estate. Therefore, the set-up costs for the council are a small element of the overall court reform agenda.
To be honest, I think that if the Lord President decided that it would take three years for the civil justice council to do its rules revision but would rather that it carried it out in two years to get things going more quickly and, therefore, decided that we would need to put more money into the body, such variations in the cost of the council would be completely swallowed up by the variations in, for example, the cost of buying a new IT system for the Scottish Court Service.
We have enough flex in the Scottish Court Service’s overall budgetary provision and in the financial memorandum to ensure that the council has sufficient resources to carry out the Gill reforms. You will have seen that the extra cost of making those reforms is substantially more than the steady-state cost of the council, so we are talking about ramping up the funding fairly significantly over the next few years to implement the rules project.
That has been done by reference to the similar exercise that took place down south following the Woolf reforms, which are along broadly similar lines to the Gill reforms. In his evidence to the Justice Committee, Lord Gill pointed out that we cannot always directly compare Scotland and England because the way in which the English rules are constituted is different from the way in which the rules work in Scotland, so there is some degree of uncertainty. However, we are reasonably certain that the range that we have given provides enough money for the council to do a decent job of bringing the rules up to date.
In essence, the council’s job is to think about things and we just need to get the right people with the right brain power and the right analytical skills to do that thinking. The council will not require large costs for equipment, buildings or any of the other public sector spending items that can sometimes run away with themselves. It will have enough people to think about things to enable it to come up with the right solutions.
The point has been made that, if there are extra costs, they will be added to court fees and will be paid by the users of the courts. There is already concern that, although people at the bottom get legal aid and people at the top have lots of money, many people in the middle cannot access the courts. Therefore, I fear that the number of people who cannot access the courts might increase. Has that been taken into consideration?
Yes, it has. That is obviously a concern with access to justice. However, I point out that court fees are typically a small part of the cost of any action; lawyers’ fees are what cost people money and make court potentially expensive. Therefore, the relatively modest uplift in court fees will not be the deciding factor in whether people have access to the courts.
As you said, people who receive legal aid do not pay court fees. The Government has substantially extended eligibility for legal aid up the income ranges so that people with moderate incomes can still access it, particularly if they have a very expensive case. They may have to pay a contribution, but the idea that they would be subject to huge financial risk is removed. It is obviously difficult to sustain that approach, given the pressures on public finances, but we have done so and have committed to trying to maintain it.
We do not think that the fees increases on which the Scottish Court Service has consulted will impact on access to justice for the poorest or the people in the middle income ranges.
I thank colleagues for their questions and the witnesses for their evidence.