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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Leader: The unresolved Eurozone crisis

The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving.

The eurozone crisis was never resolved. It was merely conveniently forgotten. The vote for Brexit, the terrible war in Syria and Donald Trump’s election as US president all distracted from the single currency’s woes. Yet its contradictions endure, a permanent threat to continental European stability and the future cohesion of the European Union.

The resignation of the Italian prime minister Matteo Renzi, following defeat in a constitutional referendum on 4 December, was the moment at which some believed that Europe would be overwhelmed. Among the champions of the No campaign were the anti-euro Five Star Movement (which has led in some recent opinion polls) and the separatist Lega Nord. Opponents of the EU, such as Nigel Farage, hailed the result as a rejection of the single currency.

An Italian exit, if not unthinkable, is far from inevitable, however. The No campaign comprised not only Eurosceptics but pro-Europeans such as the former prime minister Mario Monti and members of Mr Renzi’s liberal-centrist Democratic Party. Few voters treated the referendum as a judgement on the monetary union.

To achieve withdrawal from the euro, the populist Five Star Movement would need first to form a government (no easy task under Italy’s complex multiparty system), then amend the constitution to allow a public vote on Italy’s membership of the currency. Opinion polls continue to show a majority opposed to the return of the lira.

But Europe faces far more immediate dangers. Italy’s fragile banking system has been imperilled by the referendum result and the accompanying fall in investor confidence. In the absence of state aid, the Banca Monte dei Paschi di Siena, the world’s oldest bank, could soon face ruin. Italy’s national debt stands at 132 per cent of GDP, severely limiting its firepower, and its financial sector has amassed $360bn of bad loans. The risk is of a new financial crisis that spreads across the eurozone.

EU leaders’ record to date does not encourage optimism. Seven years after the Greek crisis began, the German government is continuing to advocate the failed path of austerity. On 4 December, Germany’s finance minister, Wolfgang Schäuble, declared that Greece must choose between unpopular “structural reforms” (a euphemism for austerity) or withdrawal from the euro. He insisted that debt relief “would not help” the immiserated country.

Yet the argument that austerity is unsustainable is now heard far beyond the Syriza government. The International Monetary Fund is among those that have demanded “unconditional” debt relief. Under the current bailout terms, Greece’s interest payments on its debt (roughly €330bn) will continually rise, consuming 60 per cent of its budget by 2060. The IMF has rightly proposed an extended repayment period and a fixed interest rate of 1.5 per cent. Faced with German intransigence, it is refusing to provide further funding.

Ever since the European Central Bank president, Mario Draghi, declared in 2012 that he was prepared to do “whatever it takes” to preserve the single currency, EU member states have relied on monetary policy to contain the crisis. This complacent approach could unravel. From the euro’s inception, economists have warned of the dangers of a monetary union that is unmatched by fiscal and political union. The UK, partly for these reasons, wisely rejected membership, but other states have been condemned to stagnation. As Felix Martin writes on page 15, “Italy today is worse off than it was not just in 2007, but in 1997. National output per head has stagnated for 20 years – an astonishing . . . statistic.”

Germany’s refusal to support demand (having benefited from a fixed exchange rate) undermined the principles of European solidarity and shared prosperity. German unemployment has fallen to 4.1 per cent, the lowest level since 1981, but joblessness is at 23.4 per cent in Greece, 19 per cent in Spain and 11.6 per cent in Italy. The youngest have suffered most. Youth unemployment is 46.5 per cent in Greece, 42.6 per cent in Spain and 36.4 per cent in Italy. No social model should tolerate such waste.

“If the euro fails, then Europe fails,” the German chancellor, Angela Merkel, has often asserted. Yet it does not follow that Europe will succeed if the euro survives. The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving. In these circumstances, the surprise has been not voters’ intemperance, but their patience.

This article first appeared in the 08 December 2016 issue of the New Statesman, Brexit to Trump