The Ministry of Justice in London. Photograph: Getty Images
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How the Ministry of Justice’s proposal for the tendering of criminal legal aid is misconceived and illiberal

This is a flawed proposal which will have highly damaging effects.

The government has a contradictory approach to the legal profession.

On one hand, there appear no limits to its extravagance when the legal work is for particular issues hotly favoured by ministers. For example, the Home Secretary used taxpayers money to fund three QCs on successive hopeless appeals in the Qatada case. And the Chancellor of the Exchequer has, without any apparent public procurement exercise, hired City law firm Slaughter and May to provide advice on a business finance project  Remarkably, it appears the Treasury is even paying Slaughter and May for tax law advice on this particular project, even though there are over 120 tax lawyers already employed by HMRC.

In respect of the legal rights of the citizen, however, the government’s approach is very different. Not only is the government seeking to reduce the amount it spends on ensuring defendants in criminal matters have access to legal advice and representation, it is not even thinking its proposals through.

Take, for example, the Ministry of Justice’s current “consultation” on a scheme of “competitive tendering” for criminal legal aid.  To a large extent, the consultation is a sham, as ministers have already blithely decided that they are in favour of such a scheme in principle and, regardless of the consultation, that “competitive tendering” will be introduced within months. However, the government says that it wishes to consult on the proposed “model” for the scheme, which is just as well as the proposed model is about as misconceived as it could be.

The starting point is that government spends just over £1 billion every year on criminal legal aid. This provides for “litigation services” ranging from advising at the police station to preparing for trial. The budget also covers representation of the defendants in the (lower) Magistrates’ Courts and the Crown Court (for more serious offences). As it stands, there are some 1,400 “providers” of litigation services: mainly High Street solicitors.

There is pressure to cut the spend on criminal legal aid. The government’s proposal for “competitive tendering” for criminal legal aid is part of a group of proposals which are supposed to save £220 million a year over the next five years. This figure is, of course, plucked out of the air. No calculations have been published to justify the figure, even though there is a public interest in understanding how the savings will come about. There certainly has been no published explanation as to how the envisaged “competitive tendering” will actually lead to any concrete savings. The supposed benefit is simply asserted.

There is similar lack of thought in the proposal itself. A sensible procurement exercise sources the market for what is available and seeks suppliers accordingly. Any other approach can mean wishful thinking and unrealistic expectations. But the Ministry of Justice has said it cannot deal with 1,400 mainly small and medium sized service providers. This is deemed “inefficient”. So the government wants to create an entirely different supplier base for these services, one which does not even exist.  This is not an example of a Tory-led government wanting to “buck the market”; it is a government which wants to bulldoze an entire market square, in the hope that something more agreeable will suddenly appear in its place.

The 1,400 current providers of litigation services for defendants in criminal cases will be cut by one thousand. This means that a thousand solicitors’ firms on High Streets throughout England and Wales will suddenly cease being able to act for defendants in criminal cases. Some of these firms may be able to join with other firms so as to carry on; but there is little doubt that most of them will close. And this is quite deliberate: the consultation paper reveals a government quite brazenly open in its intended attack on a whole sector of small and medium sized enterprises (SMEs).

One would perhaps not expect a Tory-led government, or a minister like Chris Grayling, to be so crushing of SMEs on this scale. But it is also an assault on localism and choice. High Street solicitors have unmatched experience in dealing with local criminal matters: they know the courts, the local probation services, the local barristers, and the local police. All this will be deliberately lost. 

The government is also proposing to remove the right of defendants to choose a defence solicitor from those providing legal aid. This is, of course, contrary to the reforms promoted by other social welfare departments, such as Health and Education, where the “client” is supposed to have “more choice”. The Ministry of Justice instead believes that the provision of legal services will somehow be more competitive by removing the ability of end users to choose their service provider.

Some may say that the destruction of SMEs, the abandonment of localism, and the removal of choice would all be worth it, if there could be a better system of criminal legal aid; these would be prices worth paying for better criminal justice. Unfortunately, however, the proposals do not even make sense on their terms. Here, there are four important points of concern about the proposal for “competitive tendering” for criminal legal aid.

First, the proposed scheme is flatly contrary to good procurement practice. What usually should happen is that the government “sources” the market, so to see what the market can provide. It then goes to the market with an offer which suppliers can meet. Here, the Ministry of Justice fully knows that there are few potential providers currently in place to realistically bid for the envisaged bulk contracts. Given this exercise is being done at speed, and to be completed within months, the government must also be aware that it is unlikely that suppliers will be able to combine in time so as to make realistic bids. In essence, therefore, the government does not actually know whether there will be sufficient suppliers in place for there to be any genuine competition for the contracts. This is not “competitive tendering”; this is uncompetitive tendering.

Second, the proposed scheme will have no criteria as to quality of services. The basis of the procurement exercise will not even be “best value” in any general sense. The procurements will be on price alone. Again, this goes against good procurement practice. Price-only procurements are appropriate for bulk buying of goods such as envelopes, but they are not appropriate for the purchase of complex services where the provider will be expected to undertake a range of different tasks over time. The government is wrongly treating the purchase of legal services as if it were the purchase of legal stationery.

Third, there is nothing in place if the scheme does not actually work. Grayling, an ambitious minister, wants to introduce this entire scheme at a stroke; a “big bang” approach. There will be no pilots and testing. It will either have to work or it will not. Wiser heads such as the current Tory Attorney-General Dominc Grieve are ignored. Grieve warned in opposition of a milder version of the current proposal:

‘We really should be concerned about the lasting damage that could be done if we’ve got this wrong. It could permanently damage the provision of criminal legal aid.’

It seems Grayling knows better. He wants to at speed destroy the current supplier base so to replace it with one which does not yet exist, regardless of any risk of permanently damaging the provision and quality of legal aid. 

But the fourth point of concern is perhaps the most serious of all. Any procurement exercise of this nature should have clear and detailed provisions for contract management. It is not enough to “let” the contracts and appoint suppliers. That is only step two of such an exercise, and certainly not the final step. Complex service contracts have to be actively managed; suppliers have to be monitored; and outcomes have to be assessed. Unless there is proper contract management of a public services contract, they are mere cash-cows by which taxpayers’ money is re-allocated to the capital funders of the successful providers.

There is nothing – nothing whatsoever – in the consultation paper on how these lucrative three to five year contracts will be managed once awarded. Given the enormity of the change being inflicted, this is at best irresponsible. Large providers which have bid only on price will have no on-going incentive to provide any services of a certain standard. And by the time the contracts will up for renewal, they will be cosy incumbents with no surviving competitors.

There are real questions to be asked about how best to spend a £1 billion annual budget. But the proposed scheme of competitive tendering is irrelevant. There is no reason to believe it will reduce costs and every reason to believe it will reduce the quality of services. In its rejection of choice and localism, and its attack on SMEs, one cannot even give it credit as a weapon of Tory ideology. It is merely an all-round stupid proposal which will have highly damaging effects.

Our criminal justice system really deserves better than this.

 

David Allen Green is legal correspondent of the New Statesman and a solicitor. He was from 2003 to 2005 a legal adviser on procurement and commercial matters at HM Treasury’s Office of Government Commerce. 

He is author of the Jack of Kent blog.

 

David Allen Green is legal correspondent of the New Statesman and author of the Jack of Kent blog.

His legal journalism has included popularising the Simon Singh libel case and discrediting the Julian Assange myths about his extradition case.  His uncovering of the Nightjack email hack by the Times was described as "masterly analysis" by Lord Justice Leveson.

David is also a solicitor and was successful in the "Twitterjoketrial" appeal at the High Court.

(Nothing on this blog constitutes legal advice.)

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.