Lord Carter of Cole's review of legal aid procurement

Summary

The review was established to consider delivery options for the Government’s vision, set out in A Fairer Deal for Legal Aid, in procuring publicly funded legal services.  The expected outcome is a ‘plan’ or ‘route map’ for delivering a procurement system that achieves maximum value for money and control over spending whilst ensuring quality and the fairness of the justice system.  The broad terms of reference are to outline a procurement system which:

• matches the right advice and representation to the issues at stake
• meets specified quality standards
• incentivises swift conclusions and minimises costs to other parties
• encourages a diverse and competitive market of lawyers and others offering advice and advocacy that helps deliver quality and just outcomes for best value
• avoids frequent and piecemeal direct fees negotiations between the purchaser and individual sectors within the legal services market, and takes account of the development fixed fee regimes
• assesses options for reform and their potential impact within the context overall objectives, whilst  ensuring quality

The review has a clear emphasis on the costs and delivery of the Criminal Defence Service.  Whilst recognising the disproportionate costs of criminal defence, it is important to appreciate that justice is indivisible; public funding for both the criminal and civil justice systems needs to work as a whole, and be supported by effective advice and prevention strategies.  A whole systems approach is needed to avoid driving a wedge in legal aid between criminal and non-criminal matters; a well functioning civil legal aid system can make an effective crime reduction and prevention.

The issues Citizens Advice would like to address are those relating to civil contracting – this is very much in flux and development following the publication of the CLS Strategy.[1] Further to discussions with Lord Carter’s Review Team, a clear theme has emerged for civil legal aid procurement – obtaining best value from suppliers whilst ensuring that commissioning processes provide sustainability and are appropriate for, and integrated with, wider aspects of advice funding, service provision and quality assurance.

Matching advice and representation to the issues 

Research has demonstrated that everyday legal problems are rarely experienced within the narrow silos of legal aid categories; rather they involve numerous issues of basic social well-being, and commonly those with unmet legal needs experience issues with the civil law as ‘problem clusters’.[2]

This points to the clear need and priority for delivering advice and representation services in a holistic model; that social welfare law advocacy, independent advice, and other statutory and voluntary sector services should be delivered in a joined up process.  There is much talk of the need for ‘one stop shops’, ‘triage services’, ’seamless service delivery’ etc, in fact this is precisely the service model pioneered and practiced by Citizens Advice Bureaux. 

However, we believe that the current system of legal aid contracting does not always facilitate this approach to service delivery – rules on scope and eligibility, combined with narrow definitions about what can be claimed as legal work against contract hours, restrict the capacity of caseworkers to respond appropriately to clients problems.

Whilst the voluntary sector is skilled at developing and balancing services supported from a wide range of funders with different requirements, ultimately a more holistic approach to service delivery, requires a holistic approach to funding.  

Meeting quality standards

Developments in the assessment of the quality of legal aid services have been important in driving up standards, for example the quality mark.

We support LSC developments in relation to peer review, where independent and experienced practitioners are asked to assess the quality of legal work.  All methods of service delivery should be subject to peer review.  Proxy measures (such as looking at case outcomes), should be used only as an indicator for prioritising assessment by peer review and not as a measure in themselves.

We also support the principles behind the preferred supplier scheme and are pleased that it is to be rolled out to the NfP sector at the same time as private practice.

Consideration needs to be given though to the changing regulatory context for legal services.[3]  Should setting quality standards and monitoring quality assurance primarily be a matter for regulators rather than the commissioning body?

Incentives for early resolution

It is clearly desirable to encourage early resolution of civil law disputes, which reduces costs to individuals, the legal aid budget and the civil justice system as a whole.  Rather than removing areas of ‘contentious work’ from the scope of legal aid as suggested in consultation last year,[4] it would be far preferable to incorporate into civil contracts more incentives for contract workers to achieve early resolution of problems, to negotiate rather than litigate, and to work in different ways (such as tackling policy problems at a local level) to achieve outcomes for clients and client groups.

A clear example is of ‘perverse incentives’ is that lawyers are encouraged by higher rates of pay to move clients from ‘legal help’ to legal representation certificates, but are discouraged from community advocacy and working with advice sector partners (such as participation in community legal service partnerships), as this work is entirely un-renumerated.

Avoidance of piecemeal negotiation

Negotiation for civil contracts occurs at regional level.  Yet there is an ambivalence about the role of Regional Services Committees as the key commissioning bodies, and even less clarity about the role of Community Legal Service Partnerships in identifying needs and planning priorities for contract allocations.[5] Lack of consistency between regions over priority areas of civil law and specialisation, combined with concerns at the centre over achieving targets (PSA6), have triggered un-transparent processes for the redistribution of matter starts.

Rather than attempting to plan services at a micro-level, there is a case for encouraging greater flexibility within the system with providers being left to make more decisions over priorities – for example with advisors being able to move from one category of law to another.

Encouraging a diverse and competitive market

Different and more flexible forms of contracting would encourage greater diversity and competition.  However, legal aid contracts are still only a small part of the of market for civil legal services – value for money solutions to consumer need for legal services may also emerge from different forms of ownership and innovation in service delivery models.

Whilst we endorse the LSC’s emphasis on ‘preferred suppliers’, open tendering and delivery through ‘centres’ and ‘networks’, it is important to guard against the over concentration of supply in urban areas, and ultimately a system with far less suppliers and fewer points of access.  Fewer, larger suppliers (the CLAC – Community Legal Advice Centre – model) may lead to economies of scale but will also lead to reduction in client choice, problems in dealing with conflict of interest and loss of the benefits of competition.

Options for reform

There has been a counter productive emphasis within the existing contractual arrangements on micro-management.  Rather than heavily ‘rules based’ contracts, which have grown in complexity, we have suggested that the LSC should look at offering more flexible service level agreements tailored to suppliers’ expertise and capacity.  This approach would both bring in the added value that not for profit sector offers and preserve its independence, in a way that the current system cannot.  

Citizens Advice’s approach

Over the past two years citizens advice have embarked on a programme of gathering evidence and consulting (from both our own network and partner organisations), on how well the CLS reforms, and the contracting regime in particular, are working in delivering the laudable goals of the Access to Justice Act.  We have sought out ideas as to how the system can be improved and access widened, whilst retaining financial controls.  What follows in this submission is a highly detailed analysis of:

• the civil contract itself,
• problems within the contracting system, and
• options for reform

In developing this submission we have paid particular attention to:

• The historical development of civil legal aid and its purpose within a social policy context
• Advice sector funding issues and the role of the ‘third sector’ in delivering civil legal aid
• The effects of civil contracting on service delivery, access to services and outcomes for clients
• Models of effective service delivery and the procurement context needed to achieve optimal results

In particular, we are struck that there is a significant degree of consensus that the current system has developed in way that is overly bureaucratic and insufficiently holistic.  We look to the Carter Review to recommend new procurement practices that will take civil legal aid forward; as Lord Carter has said about legal aid reform ‘’The shelves of Whitehall are full of dusty reviews which have been rapidly discarded because they did not have a practical solution and the support of the key stakeholders.’’[6]

Citizens Advice consider that by engaging with suppliers and working in partnership with stakeholders, procurement managers and policy makers can reach practical solutions that balance competing demands of unmet need, service quality, service cost and price, and performance measurement.

Introduction

Citizens Advice is delighted to submit evidence to this important review. Citizens Advice is the national body for the 450 Citizens Advice Bureaux in England, Wales and Northern Ireland.  During 2004/5, the CAB service dealt with over 5.2 million problems, including 1.5 million about welfare benefits and 1.2 million about debt. 

The CAB service also plays a key part in the delivery of the Community Legal Service, and the development of many of the Access to Justice Act reforms.  Under the Legal Services Commission’s contracting system, 244 Citizens Advice Bureaux and 221 other advice agencies and Law Centres now have LSC contracts.  All bureaux are passported to the General Help Quality Mark via the Citizens Advice audit.  For the purposes of this review, we will restrict our submission to issues concerning the procurement of civil legal aid, in which bureaux have the most direct involvement.

Our starting point is that we support a mixed economy for legal aid, with widespread points of access into the system.  Legal aid delivery should be based on constructive contractual relationships that are sustainable in the long term, incorporating principles of partnership, trust and cost recovery.  Moreover, procurement of legal aid contracts from suppliers within the ‘Not for Profit’ sector does need to be considered within the wider context of how government works with the voluntary sector to address key challenges of social exclusion and ensuring that citizens can access their rights. 

Our submission covers the following six broad areas:

• Public policy on procurement from the voluntary sector
• Problems in advice sector funding 
• Changes to civil legal aid and issues around the LSC’s commissioning processes and contractual regime
• Strategic delivery issues
• Consequences for clients who fall though ‘gaps’ in provision
• Possible alternative contract models

1.  Public service procurement and the voluntary sector

Traditionally, civil legal aid has been understood as a public service.  Public service delivery from the voluntary or ‘third’ sector is now very much an established part of the government’s agenda for the delivery of services, especially for ‘hard to reach’ groups.  It is an approach to service delivery that attracts widespread support across the political spectrum due to the expertise, innovative techniques, and community ties offered by the voluntary sector, which are not always available readily available to public bodies.  However, it is also well recognised that the voluntary sector operates in a climate of endemic insecurity – voluntary sector organisations face challenges in managing risk and delivering the value of their expertise in a public policy context.  In a recent study undertaken by the Association of Chief Executives of Voluntary Organisations (ACEVO), it was found that [7]:

• 92% of respondents from the voluntary and community sector had public service contracts of one year or less, although 2-5 years is considered to be the minimum time needed to have an impact;
• 86% said problems with the current funding regimes were adversely affecting the services they offer to users, and
• 81% said funding regimes hindered their organisations’ ability to plan for the future.

The challenges posed by additional costs and risks incurred by the voluntary sector are increasingly recognised as having potential long-term implications.  Before the general election, Alan Milburn, then Cabinet Office Minister, identified the key problem of a ‘’vicious cycle that limits the voluntary sector’s ability to deliver as the sector ends up chasing dozens of short-term funding streams, rather than investing in staff development and service improvement’’, thus in turn government agencies become  ‘’nervous about contracts with organisations that lack capacity.  They then want voluntary organisations and charities to account for every penny, micromanaging the relationship and clawing back resources whenever they can.  In turn, this keeps capacity in the sector down, preventing it from moving up.’’[8]

Picking up on ideas from prominent voluntary sector leaders, Alan Milburn argued that there needed to be a step change in procurement policy - contracts should be more long term which ‘’could have the potential to lever into the voluntary sector significant additional resources.  A voluntary sector equivalent of the private finance initiative - VFI alongside PFI - becomes possible when organisations can borrow from the markets against the long-term contracts they receive…. It is this model that should be taken forward in Labour’s manifesto for a third term.’’[9]

The Treasury have also recognised the ‘‘added value’’ for the government of contracting with the voluntary sector for the delivery of public services.  This agenda became integral to Sir Peter Gershon’s review of public sector efficiency, and cross-cutting work on the role of the voluntary sector was commissioned.  In turn, this let to the Treasury stating in that; “Funders should recognise that it is legitimate for providers to include the relevant elements of overheads in their cost estimates before providing a given service under service agreement or contract.”[10]

The other significant development has been the central role of the ‘’Voluntary sector compact.’’[11] Brokered by the Home Office’s Active Communities Unit on behalf of all government departments, the Compact remains probably the most central and earliest initiative by the current government to change the relationship between the state and the voluntary sector.  In the Compact, government promises to respect and support the independence of voluntary and community organisations.  It effectively gives the voluntary and community sector rights that include:

• The right to be consulted on new policies that may affect demands on services
• The right for the impact on the sector to be assessed when developing new policies (especially Regulatory Impact Assessments)
• The right to fair access to funding, including adequate notice of new funding opportunities or changes in funding
• The right to campaign and comment on Government policy even though the voluntary and community sector receive funding from Government
• The right to be properly funded for the work the VCS does for Government. 

The compact was accompanied by a funding Code of Practice.[12]  This clearly recognised the importance of public funders’ budgeting for core management and administration costs, which could be identified through ‘multi-year strategic funding’, and other that other funding methods such as project, partnership or development funding, should have appropriate core cost contributions.

The reality though is that the procurement of publicly funded advice and legal services from the voluntary sector has followed a very different model.  Some agencies report that they are effectively subsidising their legal services contracts, and there has been widespread concern about the unnecessary and sometimes wasteful of micro-management.

2.  Publicly Funded Advice

Within the tense framework of funding relations between the independent voluntary sector and government, advice agencies face particular challenges in securing funding and outcomes for their clients.  Advice agencies are funded by a variety of different funders for different purposes and with different monitoring requirements.  Thus for example Legal Services Commission contracts account for 19% of CAB funding, whilst over 50% comes from local government.  The advice sector is also becoming increasingly more competitive, with agencies chasing a diminishing base of funds.

Although diverse funding bases and multiple monitoring regimes can be disproportionately burdensome, it is also a strength as agencies are able to offer integrated or ‘holistic’ services to clients.  Advice agencies therefore seek to structure their services so that CLS casework services funded by the LSC (which are only available to clients meeting eligibility tests laid down by regulations under the Access to Justice Act) can sit alongside other advice services funded from other sources.

For Citizens Advice, integration of services is an essential part of our access strategy.  As part of its 2004-2008 strategic plan Citizens Advice has set the objective of: “meeting the needs of as many people as possible”.  For those needing advice, access is the key challenge, and we are aware from our own research that as things stand too often, both existing and potential clients have difficulty in accessing CAB services.[13] Moreover, there is now considerable research on unmet need for advice services –many people do not get the advice they need; according to the LSC’s own research whilst 37% of the population experience ‘justiciable’ problems, only 30% of these people seek advice, and typically clients experience a ‘cluster’ of problems not all of which can be resolved through one particular strand of legal help.[14]

Procurement policy for publicly funded advice, and especially civil legal aid, therefore needs to recognise:

• The diversity of clients needs
• The diversity of funding within the sector
• The added value of holistic service delivery
• The importance of preventative work, strategic action and social policy activity and feedback. 

Citizens Advice Bureaux have extensive and long lasting relationships with funders other than the Legal Services Commission: local authorities, the Big Lottery Fund (formerly Community Fund) and Primary Care Trusts who all support local advice services to varying degrees.  Citizens Advice Bureaux consider that it is vital that where DCA (or the LSC) are considering making approaches to local authorities and other funders about their involvement in funding local advice services, this should be done in partnership with providers, not least because we have considerable expertise in dealing with those different funders.

Some funding boundaries have undoubtedly become blurred since the introduction of the Community Legal Service scheme for the delivery of civil legal aid, because the CLS is wider than the legal aid scheme, and includes a wide range of quality marked contact points through legal advice information is delivered to the public.  The Independent Review of the Community Legal Service identified a number of problems with the way in which services within the CLS are funded and managed, with particular issues being faced at national, regional and local levels.[15]

• At national level, the CLS is vulnerable to policy changes made by other government departments with the civil legal aid budget being eroded by the changing demands of the criminal legal services agenda in particular.  It has been suggested that the civil budget should be ring-fenced
• There is a distorted, inadequate and uneven pattern of resource allocations, with some regional areas receiving larger budgets than others.  At local delivery level, both the contracting and the quality assurance systems that the providers have to negotiate are seemingly overly complex, burdensome, costly and bureaucratic.

The independent review also suggested managing the legal assistance funding element of the CLS has distracted the DCA and the LSC from developing the wider scope of the CLS, such as improving access, referral processes and establishing links with other public sector bodies (for example demonstrated by the relative lack of emphasis on preventative social policy work), the uncertainty about the role of CLSPs, and the lack of clarity about how the CLS helps tackle the social exclusion agenda.  However, the independent review’s harshest critique was reserved for the commissioning process and pointed to the complexity of current contracting arrangements and referral networks posing unnecessary administrative burdens on both for profit and not for profit providers and current quality assurance systems proving unnecessarily complex and burdensome.  Specifically, the review recommended that the LSC ‘’Change the contractual basis of for profit and not for profit contracting to achieve a better focus between outputs and outcomes by the contracted basis for both being based on a Service Level Agreement.’’[16]

With respect to the problem of joined up funding and open access into the advice system, the Fundamental Review of Legal Aid (FLAR) began to address these issues, but much of the review’s research and conclusions remain unpublished.  The new draft Strategy for the CLS commits to realigning the contractual regimes and piloting new service models (such as Community Legal Advice Centres and Networks), but is unspecific on the details about the commissioning process.[17]

Much is known from previous reviews about the enormous challenges faced by the civil legal aid system.  However, it would appear that there has been an unwillingness at all levels to address the key issues of capacity and contracting that are holding back suppliers from developing the Community Legal Service.  In light of evidence and experience, Citizens Advice considers that unless urgent action is taken to adopt more appropriate commissioning methods, there is a real danger that CLS will collapse. What follows is analysis of what we consider to be some of the key problems within the Legal Services Commission’s contracting regime, which we hope the Carter Review may be able to address.

3.  Development of Civil Legal Aid procurement and the NfP sector

The ‘Green Form’ scheme by which solicitors could apply for public funding for some clients, developed from a system of legal aid in England and Wales established after the Second World War under the Legal Aid and Advice Act 1949, and based on recommendations of the Rushcliffe Committee.  The Legal Aid Board (LAB) was then set up under the Legal Aid Act 1988, and took over the administration of legal aid from the Law Society in 1989; it developed the concept of ‘franchising’ to take forward the ideas in the Lord Chancellor’s  consultation paper, which suggested that NfP sector could provide contracted services in social welfare law fields.[18]

The first pilot contracts for legal services from the not for profit sector (non solicitor agencies) ran from 1 Jan 1995, with the following objectives:

• To investigate whether non solicitor agencies could meet franchise quality standards for legal aid
• To investigate the effect of franchising on non-solicitor agencies
• To evaluate benefits of extending legal aid funding to non solicitor agencies.  Various bureaux joined the scheme over the next few years (Phase 2 Pilots).

The Access to Justice Act 1999, replaced LAB with the Legal Services Commission (LSC) with the specific brief of bringing a Community Legal Service (CLS) into being to replace the old legal aid system.  The basis of the CLS was that all legal aid provision would be made subject to contracting.  Providers would be encouraged to work together with funders in planning services and analysing needs through Community Legal Service Partnerships (CLSPs).  Providers would be encouraged to obtain the LSC Quality Mark but would have to obtain it if they wished to run LSC contracts.  The CLS would cover a spectrum of services from provision of information about the law and legal system and availability of legal services, to funded legal help, advice and representation.  A New General Civil Contract (Not for Profit) came into effect on 1 April 2003.

As this new mixed economy of service providers has developed, there has been considerable debate around the role that different types of suppliers should play in the delivery of services under CLS.  The LSC’s Final report ‘’Quality and Cost’’’ on the Civil Advice and Assistance Pilot 2001 compared how solicitors and not for profit agencies work.  It concluded that NfP agencies were more expensive per case and often took longer, however they provided a higher quality service and better outcomes for clients than other suppliers.[19]  The report concluded that the additional time taken on cases reflected the profile of more vulnerable clients, but that the methods of service and delivery used in the NfP sector gave clients added value and kept overheads to a minimum.  The success and appeal of this model was reflected in a recent Law Society consultation and reports, which explored amongst other options how legal aid solicitors could become more like NfP agencies.[20]

The following sections examine the scheme in more detail and highlight some of the issues that arise for NfP providers.

3.1 The Community Legal Service and Funding Criteria

There are six different levels of service under the Community legal Service:

• Legal help – advice on how the law applies to a particular case
• Help at court – advocacy and advice in court without the law becoming the clients legal representative
• Legal representation – 2 levels
• Investigative help
• Full representation
• Support funding – in high cost claims (not usually relevant to the CAB service)

There are also highly detailed rules on CLS funding – cases dealing with personal injury, death or damage to property, conveyancing, boundary disputes, wills, trusts, defamation, company or partnership law, and tribunal cases, are excluded.  The assessment process for funding is undertaken by the adviser at the start of the case and:

• Looks at alternative funding or remedies
• Assesses financial eligibility on the basis of capital limits and gross and disposable income thresholds
• Involves application cost benefit test (ie ratio of potential costs to damages) and ‘sufficient benefit’ (qualitative) test

It is widely accepted that the introduction of the LSC Quality Mark has improved standards within the advice sector.  However the emphasis has been on organisational standards rather than quality of advice, which has merely been measured by proxies.  This coupled with quite high requirements of the CLS Quality Mark means that many Citizens Advice Bureaux see the system as bureaucratic and cumbersome.

While the LSC have made some attempts to ensure that agencies do not have to jump through the same hoops twice by introducing some level of passporting (for example bureaux successfully audited by Citizens Advice automatically receive the LSC’s General Help Quality Mark) there is significant room for improvement.  For example, more could be done to align the LSC Quality Mark around immigration with the OISC standards.

Services can be penalised for minor administrative errors, for example when completing the Legal Help form the adviser must indicate how much capital a client has.  One example cited by bureaux is that where agencies wrote the figure ‘0’ rather than the word ‘nil’ then all the time claimed for that file could be cancelled out by the LSC, regardless of the quality of the advice or the outcome of the case.  LSC requirements mean that more time has to be devoted to form completion and setting up of files.  The need to time record to a high level of detail also means that more staff time is devoted to setting up systems and checking and rechecking time recorded.

3.2 CAB work and LSC contracts

Bureaux are expected to deliver 1,100 hours of ‘controlled work’ (Legal Help Level) per contract, and contracts are targeted to specialist areas of social welfare law such as debt, housing and welfare benefits.

Failure to meet target hours can trigger sanctions in the form of either cuts, claw-backs, or specific orders.  Only 80% of the contract price is actually guaranteed by the LSC, and auditors can cut the hours claimed for if caseworkers’ reports do not fit the contract’s precise requirements – typically this happens when claims have been entered for work that does not qualify, or where case reporting fails to back the time spent on cases.  The following are areas where casework is only partially claimable under the contract or hours may be disallowed.  

Administrative work

All casework, whether legal or otherwise, involves administration – indeed the contract provides for 50% of an administrative support worker per full time adviser.  However, there are issues and sometimes misunderstandings about how this is dealt with under the contract.  Bureaux cannot claim for ‘‘work not directly involved in provision of legal services to clients’’.  This might include for example:

• Making up and routine updating of clients’ files and records
• Routine form filling on behalf of clients
• Eligibility calculations
• Photocopying client documents

Bureaux can claim for writing up casework/attendance notes.  However, all work claimed under the Legal Service Commission’s Not for Profit Contract must be ‘’clearly justified and proportionately evidenced’’ on the relevant file – ‘’insufficient evidence of casework on file’’ is the most common reason for the LSC auditors reducing time. 

Furthermore, whilst the contract payments include allowances for management, supervision and an administrator’s time as well as running costs, there is no provision for any capital expenditure on equipment, which may be essential to administrative support systems.  Citizens Advice recommends that the LSC should make a one off capital payment every four years to NFP providers in recognition that equipment such as computers need upgrading.

Research and policy work

The general rule is that legal research is not claimable, unless it involves complex or recently altered points of law – so time accessing EIS (the CAB service’s information system) to advise is not claimable, though time will be allowed for consulting legal texts.  Social policy work, i.e. time spent working to achieve changes in policies and practices which cause problems for clients, is not claimable, even though the policy work may solve many legally aidable clients’ problems.

Correspondence and communications

There are issues about what is claimable in dealing with communications for clients and liasing with client:

• Letter writing - Standard claim is six minutes for writing a routine letter.
• Reading incoming mail - Perusal of incoming letters is generally not claimable, unless the letter is more complex/lengthy than a standard or routine letter.
• Telephone calls - Routine calls are claimable at the rate of six minutes per call, but all calls must be justified.
• Generally, travel is not always be cIaimable although the rules depend on each case

Advocacy

Attendance at tribunals (as a ‘McKenzie friend’ rather than as a legal representative) is only claimable in exceptional circumstances.  However, this is because tribunal representation in most cases is outside the scope of the funding code, except for some ‘Controlled Legal Representation’ in Mental Health Tribunal Cases.

Meeting Case Targets

The NfP contracts are based on hours per annum, per caseworker, rather than units of work, whilst the solicitor contracts are different, based on ‘matter starts’, which means in effect each solicitor contractor has a ration or quota of cases. Contracted NfP agencies have to deliver 1,100 hours of controlled work per contract

The feasibility of achieving the target hours is affected by the following:

• Bureaux may find it difficult to meet the hours because of local circumstances beyond their control.  For example in areas of widely scattered need, dealing with a smaller number of clients who have to travel longer distances means more missed appointments, which it is not always possible to fill with other contracted work.  This is a particular problem experienced by bureaux situated in largely rural areas.
• Equally, casework undertaken by an adviser may seemingly exceed acceptable time limits.  However there may be a good reason, for this such as clients’ vulnerability or special circumstances including mental health problems.  Nevertheless, there is no guarantee that the LSC will agree with the adviser’s judgement and sometimes hours that bureaux considered justifiable are retrospectively disallowed.

3.3 What the contract covers

The contract runs for one to two years and has monthly reporting requirements, with hours claimed on a quarterly basis.  The Bureaux are paid on a quarterly basis in advance.  There is scope for small amount of low-level work to be undertaken outside the framework of the Funding Code (10% rule known as ‘Tolerances’).  The contract terms and schedules are detailed and complex -250 pages, plus over 1,000 pages of guidance.  Within that contract document there is far too great an emphasis on micro management of time rather than providing a quality service.  The guidance in itself is sometimes nonsensical, for example while an adviser cannot claim for reading ‘a short letter, they can claim for reading a long letter’.

The contract includes the following three main components:

Standard terms – these include

• Provisions about the Quality Mark and compliance with Specialist Quality Mark
• Payment provisions
• Approved personnel and confidentiality
• Warranties and indemnities – Provider must indemnify LSC against all losses
• Sanctions and orders etc – for example revocation and claw-back provisions – eg orders to repay LSC monies
• Termination
• Appeals procedure – to LSC Costs Committee

NfP Specification - - how suppliers perform contract work with references to the areas of controlled work covered in the Funding Code.

• Financial eligibility – based on funding code
• Sufficient benefit test – means and merits
• Disbursements – Extra costs
• Controlled Work – levels of help: Help at Court or Controlled Legal Representation, and an Upper Casework Limit on Controlled Work = limit to the amount of time you may claim on a case without obtaining prior authority from the Commission.
• Contract Compliance Auditing – LSC power to reduce the hours recorded as contract work in the relevant schedule period.

Schedules - terms relating to Contract Work issued at LSC discretion, including what Categories of Work and what number of hours of Direct Casework Time authorised under it.

This is the only area where the advice agency has any say about the content of the contract, e.g. number of contracted hours or allowing representation.  However, contracts cannot be changed to change the scope of the legal aid scheme. 

3.4 Issues with the LSC Contract

There are a number of issues that arise over the structuring and performance of the contract. These include:

• LSC has discretion to reduce LSC contract funding by same amount as any reduction in core funding – so if the local authority reduces funding to an advice agency so can the LSC.
• The LSC can specify a higher level than usual of qualification for caseworkers to discharge contract (e.g. some bureaux have been forced to recruit a solicitor for housing work), even if this is not a realistic option.
• Assessing eligibility - A CW1 form must be filled for each separate matter/issue, and income and capital limits and ‘sufficient benefit’ (a combined legal merits and cost-benefit) test applied.  This has to be done every time for every separate matter.
• Lack of transparency as to what constitutes ‘research’ and ‘administration’
• Lack of transparency as to what is a "complex" or "standard" letter or issue – (eg defending possession actions is usually straightforward, but can take some time to gather all the relevant information)
• Direct casework time recorded in units of 6 minutes
• LSC Regional Directors can impose ‘upper casework limits’ arbitrarily. This means that once any case in an agency reaches the hours limit they will have to ask the LSC for permission to carry out further work on the file
• Auditors can reduce casework hours claimed
• LSC can make in year cuts

The concern is that many of the terms and conditions of the contract are incompatible with the CAB service focus on tackling all of the client’s problems in a holistic manner.  Whatever the rights and wrongs of this debate, in the past, situations of ‘underperformance’ have led to cuts and clawbacks which have even threatened the financial stability of some CABx.  For clarity it is important to distinguish between these: 

Cuts – Failure to fulfil target casework hours constitutes underperformance, and can trigger sanctions, which can include cuts in contract funding proportionate to hours produced.  The application of contract sanctions is dealt with in the new ‘Underperformance Guidance’. 

Clawbacks – In certain circumstances the LSC can reclaim money already paid by serving notice under Ch 12 A Cl 16D.

However, whilst these are distinct sanctions, in terms of their impact on bureaux and bureaux capacity to plan their services, this distinction is largely semantic.  Para 50 allows the LSC to amend Standard Quarterly Payments during the year.  In other words, a cut effectively becomes a claw-back – though the LSC still argues that there is a big difference.

Some bureaux have felt the pinch in areas where the LSC Regional Offices have taken a robust line towards implement the Underperformance Guidance.  A few bureaux which were unable to produce their contract hours had their contract quarterly payments reduced.  For example, one bureau produced 75% of its contract hours in the first quarter and continued underperforming in the second quarter – rather than reducing the last two quarter payments by 75%, the 75% proportion is applied over the whole year so the remaining 25% is spread over the next two quarters – i.e. 12.5% of contract value per payment.  Given how these re-adjustments work, there was particular concern two years ago when ‘Educational Audits’ made some sweeping notional deductions to the hours typically claimed on casework files.  We are pleased to see that the LSC has adapted its contract audit approach in the light of this experience.

The contract guaranteed 80% of the level of funding in 2003 – 2004 for 2004 –2005.  The LSC says that it needs this element of flexibility to allow it to re-direct its fixed budget to meet needs identified as priorities by Community Legal Service Partnerships (CLSPs) and Regional Legal Services Committees (RLSCs).  So, even a bureau that is meeting its contract targets it could find that it is offered a smaller contract next year, if funding priorities have changed.  If the bureau is underperforming this year, that 80% will be calculated on the basis of actual contract hours performed.  So, if the bureau has a contract for 1,100 hours; but only produces 880 hours, it will only be guaranteed a contract for 704 hours next year.

4.  Strategic delivery issues for the voluntary sector

The contract is an agreement for statutory purchase and funding for services specifically drafted and tailored for the not for profit sector.  It is part of the core funding for the Citizens’ Advice service; as such the NfP contract comes within the remit of the Voluntary Sector Compact, both as contract and core funding:

• Core funding – The Compact emphasises recognising Core Costs through multi-year strategic funding
• Contract Funding - The Compact emphasises that government purchasers should be aware of the needs and capabilities of the sectors they procure from.  Contracts should ‘’fit’’ their purpose and audit requirements should be proportionate.

The principle and practice of clawback undoes all the key principles of the Compact – the importance of the compact has been underlined both by the Treasury’s Cost Cutting Review of the Role of the Voluntary and Community Sector in Service Delivery, and Citizens Advice own ‘Partnership Accord’ with DTI and Government.

The principle of clawback in the context of a public service contract also raises legal issues.  In a motion submitted by one member bureau to the Citizens Advice AGM 2003, it was submitted to that the LSC has ‘’a strange understanding of the law of contract.’’  It might also be questioned whether such provisions offend principles of proportionality and ‘’Wedenesbury reasonableness’’, as the provision for legal aid is clearly a public law right, given that the civil contract is the principle mechanism for the state delivering access to justice.

However, whatever the legal position it is important to understand the strategic problems for voluntary sector for service delivery under these contracts, and the impact this has on service delivery for clients.  The following sections look at these issues in more detail. 

Reasons why ‘input’ approaches to targets may be inappropriate

• Caseworkers feel that they can only claim standard amounts of time for activities rather than "real time", because of the strict time guidance, and this distorts the volume figure
• Recruiting new staff when caseworkers move on opens gaps, which successor posts can’t catch up on.
• The contract hours regime does not allow for staff sickness, time away on training courses etc. 
• CAB specialists often do not have much control of demand – this is filtered through the generalist service who are the "gatekeepers", leading to variable take-up of service
• In some services there is a genuine fall off in demand (e.g. employment advice)
• The system makes no allowance when clients do not turn up for scheduled appointments
• Minor administrative errors can lead to substantial penalties, (one bureau reported being told that putting "0" for capital on form CW1 rather than writing "Nil" would cause the auditor to disallow all the time on the form).  For example, faxes must be formatted as letters or they are disallowed.
• Issues around year-end when cases are ‘’carried over’’
• Write-ups being ‘too short’ or ‘too long’
• Issues around not being allowed to attend a tribunal, although client is not able to represent themselves.
• Failure to identify legal issues (often very technical and not covered in training for Certificate in Generalist Advice Work).  However, this is a problem for auditors also.
• Time spent on files not supported by evidence – however, sometimes evidence many not exist without negating time spent   
• The Audit trail - Reports from bureaux suggest very wide inconsistencies in audit practice, especially inconsistencies in time reductions between auditors (inconsistencies not just between LSC offices but between auditors doing one audit)
• Inconsistencies between auditors with regard to time allowed for pre- closure and closure letters.  One allowed six mins, another didn’t allow any time and the third allowed 12 mins.
• Auditors failing to identify legal issue at heart of a case and end up disallowing time claimed against target hours.

Impact of LSC funding instability

Voluntary sector agencies’ income streams are often ‘hand to mouth’- they do not know until the following year what income they will receive from funders, but they must still set a budget for the year and make commitments to staff.  They do not have the financial resources to bear in-year budget cuts.  The results of clawbacks and cuts in LSC funding include the following:

• Some bureaux run deficits or run down their reserves.
• Effect on staff morale can be devastating, increasing stress levels and sometimes resulting in greater sickness absence. 
• Bureaux are tied into contracting as LSC funds are filling gaps in core funds.  Therefore withdrawing from contracts could jeopardise the whole service in some bureaux.
• Some bureaux are effectively subsidising LSC contracts from core funds in making up shortfalls left by underperformance reductions in hours.

Contract uprating

The contracts have failed to keep up with inflation and salary increases.  This has made it difficult to recruit and retain staff with the necessary expertise and experience, which is significant because the main cause for underperformance on the contracts seems to be staff losses, and absences such as sickness, and maternity leave.  There is a perception that staff morale is low and people are leaving because of loss of job satisfaction.  Bureaux report that LSC funded staff are being placed on less favourable terms and conditions of employment than staff funded from other sources.  This makes personnel management much more difficult.  Bureaux fear that they are becoming poor employers, and that they may face Employment Tribunal proceedings, which could damage both the finances and the reputation of the service.

The new NfP (2003) civil contracts do not provide for annual uprating of funding in line with the Retail Price Index.  At the same time there has been no compulsory reduction in contracted hours to compensate.  As a result there is concern amongst bureaux that in the long term LSC contracts will become financially unviable.  Unlike private solicitors, advice agencies cannot subsidise legal aid from private client work.  They often do not have reserves to draw on, and they cannot raise bank loans.  This is an issue that the Carter review needs to address urgently.

5.  The emergence of advice deserts

One of the aims of the CLS and introducing a contractual regime was to provide a seamless network of legal information, advice and representation throughout the country.  However in the last five years there have been growing numbers of ‘advice deserts’; that is, areas of the country where the LSC has insufficient contracts – or no contracts at all – for specialist legal advice in one or more areas of social welfare law.  This problem has been highlighted both by the Department for Constitutional Affairs Select Committee, by the Independent Review of the CLS, and a 2004 Citizens Advice evidence report.[21]

Advice deserts are distinct geographical areas where there is nonexistent or insufficient supply of free specialist legal advice in one or more areas of social welfare law, due to local solicitors pulling out of legal aid.  As a result, individuals are denied access to justice, as they cannot necessarily afford to travel long distances to get legal help elsewhere.  Sometimes help is available if the individual can afford to wait weeks or months.  However some people, e.g. women needing an injunction against a violent partner, may need urgent help and cannot wait months for an appointment.  It is CAB experience that in most areas of England and Wales there is evidence of insufficient supply.  However, the government deny that there are ‘advice deserts’, but recognises that there are many parts of the country with areas of ‘unmet legal need’ for clients who are eligible for legal help.

There is also evidence that, even in areas where there are solicitors and advice agencies with civil contracts, people find  it hard to access advice.  Over 60 % of CABx report that they have problems referring clients to solicitors with LSC contracts.[22] It is not unusual for individuals seeking advice to say that they phoned ten to 15 solicitors or other agencies before obtaining an appointment.  Agencies have to turn large numbers of callers away due to pressure of work including those with an urgent and justified need for assistance.

There is evidence that the number of people helped by legal aid is falling (see tables below).  Indeed, since the introduction of contracting the number of firms providing legal services has declined from over 14,000 to around 3,000.  In 2004/2005, the LSC failed to meet a key target to increase by ten per cent the number of new cases in areas of law that involve social exclusion (excluding immigration cases).  In fact, compared to the previous year, the number of new cases declined by five per cent.

Between 2000 and August 2005 the number of legal help contracts in the main areas of social welfare law [excluding immigration] changed as follows

The total number of new legal help cases started in the last three years of contracting are as follows (figures are rounded to the nearest thousand):

The real effect of advice deserts though can only be measured in human cost. Below are some examples provided by bureaux:

• A CAB in Warwickshire regularly has problems in obtaining clients representation in difficult housing cases, as the nearest LSC suppliers with housing contracts are solicitors in Solihull or Nuneaton, or Coventry Law Centre.  The have discussed the matter with a District Judge, who circulated a discussion paper which concluded ‘’it appears that our County Courts in Warwick and Stratford are in an ‘’advice desert.’  Although tenants are well served by the CAB in rent possession cases’, I am not convinced it is fair to expect the bureau to provide support in nuisance/anti-social behaviour cases.’’
• A CAB in Hampshire report that there is only one firm of solicitors left in town that is doing any contracted civil legal aid work, and they have a three-week waiting list.  The result is that they have to send clients to a solicitor in Salisbury.
• A CAB in Lancashire reported that a client, a Nigerian man, needed representation in an in an appeal against a Home Office decision regarding his immigration status.  The nearest specialist practitioner was based 40 miles away from the client’s home.
• A CAB in the East Midlands reported that their client, who needed a divorce, was eligible and registered with the only CLS listed firm in the area.  However, the solicitor is no longer offering legal aid and their only option is to travel to Peterborough 25 miles away for an initial interview with another firm.

In various surveys undertaken by the Law Society of legal aid suppliers, respondents have consistently cited the contracting regime and associated bureaucracy as the key factor for firms withdrawing from legal aid.[23]   Whilst Citizens Advice do not advocate a return to the previous demand led system, we do consider it essential that procurement policy provides sufficient incentives to keep good suppliers in the system.  

6.  Bureaux conclusions on the contract regime and options for change

Last year, Citizens Advice held a series of seminars on the contract, and sent all bureaux a questionnaire to which about 25% responded.  These looked at the problems that have been thrown up in practice by the inflexibility of the contract:

Issues relating to leave and recruitment

1,100 hours of contractual work is not possible to sustain if staff are on long-term leave or recruitment proves difficult.  Some bureaux are subsidising contracts with other non LSC funded staff and volunteers.  This has led to problems with other core funders, such as Local Authorities, and it was reported that one local authority in London is expecting the LSC to meet more core costs.  Citizens Advice recommends that the LSC and the contract itself need to be more consistently flexible over staff absence/recruitment, and not penalise bureaux where there are good reasons for underperformance, such as difficulty recruiting.  The LSC should also consider an extra payment towards the cost of maternity/childbirth/long term sick leave.  Examples of best practice by other funders on this include the Association of London Government (ALG) and the Community Fund.  If an ALG funded worker goes on maternity leave a payment can be claimed to assist with the cost of providing a locum, so that the service can continue.  The Community Fund has recently introduced a similar provision.

Recovering money retrospectively

The retrospective method of recovery causes extreme difficulty when the money has been already spent on staff salaries.  Some bureaux have had to use money from reserves in order to continue.  The contracts are becoming seen as increasingly high risk in terms of the liabilities on Bureaux.  Citizens Advice considers that the LSC should not attempt recover funds retrospectively, if there is a problem with under performance. Instead, a structured action plan with timescales for improvement should be agreed with a reduction in contract payment in the following quarter if targets are not reasonably met.  This reduction should not be retrospective, but only applied to future payments.  Consideration needs to be given to the overall impact of any reduction on the contract holder.

Who carries out the LSC contracting work

Citizens Advice considers that the LSC should allow flexibility on who can carry out the contract work. In practice, different LSC regional offices have different approaches – some being prescriptive, and others being more flexible.  If other staff or experienced volunteers can contribute to the contract this allows cover during caseworker absences and provides a developmental opportunity for all staff.

The social inclusion dimension

Bureaux felt that the LSC should have a clearer understanding of the difference in the clients that seek help from not-for-profit agencies, and those that are able to use private solicitor’s practices.  Citizens Advice considers that LSC should recognise the added value that CABx bring to the access to justice and social inclusion policy agendas.  Solicitors are not necessarily more cost effective if outcomes are taken into account.  Social policy work should be integrated into the contracts.  This could be done on a task-orientated basis with areas of concern to national government, being monitored by bureaux.  For example, Citizens Advice Social Policy department have produced reports on aspects of access to justice, which are relevant to the contract debate. 

Tying contracts to outcomes

Contracts should be more outcome based rather than process-based to tie into the social inclusion agenda. Several bureaux gave examples of contracts they held were more money had been gained for clients than it cost to deliver the contract.  Examples of good practice on this are contracts with Primary Care Trusts, which show health gains, and contracts with Housing Associations, which show the prevention of homelessness and the ability to budget as outcomes. 

Ensuring that the contract meets the needs of vulnerable people

The client profile could be used as a measurement to ensure that the contracts are targeting vulnerable client groups, geographical areas of deprivation, as defined by CLSP strategic plans.

The contract should ensure that all providers have arrangements to assist people who face particular difficulties in seeking legal advice, because of communication, disability, language or literacy difficulties.  This is a key requirement in ICAS contracts.

Consideration should be given specialist client based contracts, e.g. a contract for people with mental health problems, people with learning difficulties or ex offenders.  These contracts would be based on the generalist help casework requirements.

Consideration should be given to generic contracts, similar to the ones that some law centres originally held.  These allowed the organisation to provide legal advice in a number of areas of law, which had been identified as priorities in the regional plan.  There should be no strict division between how many hours could be spent on each area, within the overall context.  This could enable bureaux to better respond to client’s needs, and have the flexibility to respond to changing local priorities.

Consideration of other contract models

Most of these proposed changes would be cost neutral, and many have been successfully introduced in other contract models that operate successful partnerships between the statutory and voluntary sectors, for example:

CLS General Support Pilot (ran until March 2005).

The CLS Policy Team developed a General Support Pilot, whereby a small selection of LSC civil contract holders in a Region are contracted to provide back up support and training to non contracted CLS partners.  The contract also involves the participants coordinating the local CLSP, networking with other organisations, coordinating social policy initiatives, and helping to ensure effective referrals between agencies.

• The CLS included some of the following innovative selection criteria:
• Ability to cooperate with the LSC in the production and coordination of publicity materials promoting the pilot
• Evidence of ability to complete regular and timely quantitative reports and participate in the evaluation of the service.
• Evidence of ability to participate in building strong working relationships with frontline advisers and agencies
• Commitment to the aims of the Community Legal Service
• Participants have been given a number of hours per week/annum to provide support negotiated on a service by service basis.
• Monitoring and evaluation is carried out via quarterly reports using data collection forms.  At annual audit, CLS Account Managers will be asked to check that the General Support Services are providing support hours, networking, maintaining expertise in their area of law and complying with monitoring arrangements.
• A user satisfaction survey is conducted at six months and 12 months.  One off interviews will also be conducted with the General Support Services to gather information about good practice.  Bureaux in Wales are part of the pilot, and will be participating in an evaluation of the impact it has made.

Family Advice and Information Services (FAINS)

This is an entirely different approach to procurement of family law services, and may eventually replace the ‘Family Help’ contract model under the current scheme.  The contractual basis is for family legal, mediation and voluntary sector support services to work in partnership.

FAINS aims to help clients using family solicitors to prepare a ‘personal statement’, which can be shared with other providers to whom the client is referred.  The solicitor is paid for producing the statement and making the referrals through a network of family support agencies.  CABx and other NfP agencies are often the first stop for people at crisis points in their life such as divorce, bereavement, redundancy and sudden ill health and we welcome the LSC’s decision to pilot the FAINs project with the NfP sector.

Independent Complaints Advocacy Service (ICAS)

Citizens Advice has agreed a contract with the Department of Health to promote independent complaints advocacy in six regions within the UK.  The delivery of the service is sub contracted to bureaux.

The main terms and conditions of this contract require bureaux to provide a service by telephone, email, and reception backed up by casework, where appropriate.

Funding is provided on the basis of a minimum number of cases dealt with, monitored by statistical returns, on numbers (statistics) of service users, as well as gender, ethnicity, age and disability.  The reports also monitor the types organisations/professions complained about, and the issues raised, including any trends.

A key requirement is for participating bureaux to establish working relationships with other advocacy organisations

Better Advice: Better Health

This project is funded by the Welsh Assembly Government with funds being disbursed through Citizens Advice Cymru.  The service legal agreement under which the BABH project operates requires bureaux to demonstrate benefit take-up and income maximisation gains through tribunal support and representation, and client numbers.  Bureaux report that BABH has shown entirely positive results, with targets generally being exceeded.  Client feedback throughout Wales is hugely positive, with the majority of respondents stating that without the project they would not have sought advice from a CAB.  Opportunities for staff development, training and the cascading of experience to others within the bureau has been possible, as the caseworker is not working according to a ‘piece-work’ system, but is results-driven, and can therefore be flexible within the wider objectives of the CAB service.  This holds true for social policy work too, which is encouraged and supported by the wider project.  Partnership working with local GP’s and other primary care staff has, bureaux feel, had an impact for local people beyond the outcomes achieved for specific clients.

Neighbourhood Renewal

Bolton and District CAB has a large funded project called the Income Maximisation Project.  This is output and outcome driven and provides debt and welfare rights advice.  The project targets groups who historically do not access advice services concentrating on wards in the borough which have the highest indices of deprivation.  So far the project has brought in millions in unclaimed benefits and manages hundreds of thousands of pounds debt.  The project also logs other outcomes such as possession of properties avoided.

Housing Association Contract

Wandsworth CABx has a contract with a large local Housing Association.  The Housing Association has recognised that it is not cost effective as a social landlord to evict tenants, either in terms of their lost revenue or the wider social cost.  They have entered into a contract with the CAB service to provide debt counselling and financial literacy advice to tenants with serious rent arrears who are at risk of eviction

Key outcomes include: amount of rent arrears managed, and number of eviction avoided.  The contract funds a part time worker who takes cases on a referral basis.  The CAB report that targets have been exceeded and they are currently in negotiation with other Housing Associations to extend the service.

Fixed Fees – a solution for the NfP sector?

The LSC has started to roll out a system of fixed fees for legal aid practitioners.  If extended, this could allow NfP agencies to gain the same benefits from operating a fixed fee regime as their commercial and private client colleagues.  Whilst the LSC is piloting a fixed fee system for most Family and Civil Legal Help work, it should be noted that these cases are (with some exceptions) relatively inexpensive and straightforward in terms of law and procedure.  Some types of more complex Legal Help cases, or cases involving vulnerable clients perhaps with mental health problems or communication difficulties, may be unsuitable for operating on a fixed fee scheme.  Any fixed fee scheme will need an ‘opt out’ provision for exceptional cases. 

Another consideration is that most not-for-profit (nfp) agencies have yet to develop the type of case management techniques that would enable them to operate fixed fees.  It may therefore be unrealistic to expect Not for Profit agencies to participate in piloting fixed fees.

Whilst Citizens Advice endorse the underlying principle of fixed fees, we consider that there are problems with the LSC’s model for fixed fees:

• The scheme produces a fixed fee based on a supplier’s historical case mix. We are concerned that as a result a supplier will seek largely to reproduce this same case mix in the future because they will have some confidence about the income level it will produce.  No commercial supplier is going to be flexible about the case types they take on if by doing so they risk losing money.  We do not see how this benefits clients or suppliers.
• The scheme concentrates on quantity; however there is a risk that this may be at the expense of quality.  There is too great an emphasis on increasing the volume of people seen rather than safeguarding and improving the quality of service.  More clients may receive some advice as a result of more matter starts becoming available (assuming of course suppliers are willing to take them on and provide the service).  This will enable the Department for Constitutional Affairs to demonstrate that it has increased, ‘the number of people who receive suitable assistance in priority areas of law…’ (PSA target 6).  We are concerned though that there is a real risk that some of this advice will turn out to be of little or no benefit to clients because some suppliers will limit the range and depth of the service previously offered in order to remain profitable.  Suppliers may also be tempted to cut corners by e.g. failing to take or return calls from clients unless it is strictly necessary in order to progress the case.
• The scheme can potentially create conflicts of interest between clients and suppliers.  Clients are interested in getting the right service with the best outcome whilst the supplier, although wanting the same as the client, will also be concerned to ensure that they do not spend more than the fixed fee on the client’s case.  Proposed control measures to ensure that the scheme does not have an adverse impact on services delivered to clients are insufficient.  The LSC proposes to review matter start allocations and as against the supplier’s previous years to ensure that case mix remains approximately the same.  Whilst this may monitor supply levels in particular case types and it cannot safeguard against attempts to cherry pick cheaper case types.  Indeed, it is unclear how any of proposed monitoring will prevent suppliers filtering out the most vulnerable clients, the very clients that the DCA has in mind in Strategic Objective 3 (Public Service Agreement 2001-04) when it talks about, ‘the use of public funds’ securing ‘greater social justice’ and reducing ‘social exclusion’. 
• The control measures the LSC propose using to ensure that quality of service and outcomes are not compromised by the scheme’ are linked to a system of disincentives and penalties. We would suggest that consideration is given to a payment system based on incentives and rewards explicitly linked to the quality of service provided rather than penalties and disincentives.  There could be a basic fixed fee as well as a system of automatic uplifts payable to those suppliers who provide enhanced access to priority groups, e.g. people with a mental health problem, learning difficulties, literacy or language difficulties, any hearing or sight impairment or where other factors, such as rurality, influence the cost of delivering services as well as uplifts for particular achievements linked to quality of service and case outcomes.  Fixed fees will only work if set at the right level initially and are subsequently reviewed on an annual basis

Conclusions 

The most clear conclusion from the experience of civil contracting is that ‘one size does not fit all’.  Indeed this has been increasingly recognised as the system has developed and contract hours and terms in NfP schedules have been varied.  However, there is a need for far greater flexibility in approaches to contracting, underpinned by a procurement policy that is genuinely appropriate for the Not for Profit sector.

The key principles are that the procurement process must be transparent and should not be based on price alone; issues around ensuring quality of advice and a service's commitment to access for clients must be key factors in allocating contracts to suppliers.  Secondly, monitoring and compliance levers be proportionate; targets should be related to outcomes rather than measuring inputs.

Thirdly, cost recovery issues need to be taken into account in the whole contractual package – it is plainly unsustainable in the longer term to expect voluntary organisations to subsidise statutory services.  Yet too often this can happen by default rather than design. 

We have suggested that there needs to be significant change and simplification to the types of civil contract for controlled work, with the purpose of introducing elements of flexibility into the contracting regime, to enable providers to spend more time on problem solving.  Current restrictions on using contract time for prevention of legal problems should removed; for example, on helping clients fill in welfare benefit claims, which can save appeals later, and on use of contract time for social policy evidence gathering and advocacy.

Finally, Citizens Advice broadly favours the model of commissioning services from a ‘consortia’ of providers, where appropriate, and subject to open and transparent tendering processes.  This has now been suggested as the way forward by the CLS strategy.  However, it is important that any move towards new methods of ‘bulk contracting’ avoids setting up unhelpful competition processes between fewer and larger suppliers for the delivery of legal aid, each attempting to undercut one another on price at the expense of quality.  For this reason we do not consider competitive tendering on the basis of price alone to be the way forward.

We believe that a balance can be struck between price and quality, so long as procurement policy managers are prepared to engage and work in partnership with suppliers in designing contracts.  We would welcome further engagement with the Carter Review on delivering a ‘road map’ for procurement that is appropriate for the future development of civil legal aid, and the management of scarce public funds for delivering legal help services that are genuinely independent, cost effective and responsive to clients needs. 

Social Policy contact James Sandbach: James.sandbach@citizensadvice.org.uk

[1]Making Legal Rights an Reality – The Legal Services Commission Strategy for the Community Legal Service 2005 

[2]Causes of Action – Civil Law and Social Exclusion LSRC 2004

[3]Legal Services Reform – Putting Consumers First DCA 2005

[4]A New Focus for Civil Legal Aid LSC 2004

[5]Regional Planning and its limitations Advice Services Alliance 2005

[6]Lord Carter's speech to the Bar Parliamentary Group October 2005

[7] Sure Funding: the ACEVO Commission

[8] Alan Milburn speech to ACEVO

[9]ibid

[10] The Treasury (2002), The role of the Voluntary and Community Sector in Service Delivery – A Cost Cutting Review

[11] The Voluntary Sector Compact, Home Office 1998.

[12] The Voluntary Sector Compact – Funding Code of Practice (1998)

[13]Unmet demand for Citizens Advice Bureaux - MORI research report, September 2004

[14]Causes of Action – Civil Law and Social Justice LSRC 2004

[15]Independent Review of the Community Legal Service

[16] ibid

[17]Making Legal Rights a Reality Draft Strategy for the CLS June 2005

[18] Legal Aid – Targeting Need  LCD 1994  

[19]Moorhead Quality and Cost: Final Report on the Contracting of Civil, Non-Family Advice and

Assistance Pilot, IALS (2001). This report assessed the block contracting of legal advice and

assistance in civil, non-family cases and was submitted to the Legal Services Commission. It

contains the most thorough assessment of legal advice and assistance ever undertaken, involving

the use of experimental, randomised control and a number of innovative research methods to

develop a full profile of advice and assistance work and the quality of service provided. Its

particular focus is an examination of differences of approach between between solicitors in private practice and "not for profit" agencies in the provision of social welfare law.

[20] The Future of Publicly Funded Legal Services Law Society March 2003

[21] Geography of Advice – An overview of the challenges facing the Community Legal Service, Citizens Advice (2004)

[22]ibid

[23] Access Denied