By Matt.Ross

30 May 2012

Legal Services Commission chief Matthew Coats has a reputation for carrying problematic services through political storms. Matt Ross asks him about organisational reform, service quality – and the looming cuts to legal aid

Matthew Coats has worked in some of the most controversial, emotive and closely-scrutinised fields of policymaking; areas where shaping services is a very, very political act, and public opinion a key influence on ministerial decision-making. He’s run emergency care policy at the Department of Health, where he walked a careful line on hospital A&E departments, and asylum and immigration policy at the Home Office and UK Border Agency. His last job was as the interim head of the Border Force, where he worked to calm things down after the controversial ousting of former chief Brodie Clark. And now he’s entered the field of legal aid, just as justice secretary Ken Clarke takes a scythe to Britain’s traditionally generous system of welfare support for those who can’t afford to hire their own lawyers.

The controversy that surrounds all these topics constrains policymaking – and can reduce the potential to modernise or reform services, making it harder to tackle delivery problems such as casework backlogs, errors in decision-making and variable quality standards. Both sides of this treacherous policy/delivery equation must be addressed, but they can be handled separately; and having overseen both sides in secondary healthcare and immigration, Coats seems pleased that his new role – that of chief executive of the Legal Services Commission (LSC), soon to become the Legal Aid Agency – is a pure delivery job. The Ministry of Justice handles policy in this field, and he prefers it that way: “I’ve worked in a variety of settings, and the answer can be different in different settings,” he says. “But the split will enable the Legal Aid Agency to maintain a clear focus on proving independence and on competent decision-making, so I think it’s the right answer for us.”

Three months into his new job, Coats is still getting to grips with the intricacies of the legal aid system – but the challenges involved in improving services, he says, are familiar. “I think there are parallels between immigration and legal aid, which are both high-volume, complex caseworking within a political environment,” he says. “And I’m very proud of what we achieved in asylum and immigration; I think we really improved the caseworking, whether it be for asylum, temporary migration or permanent migration.” With issues of policy handled by the ministry – and most of the uncertainties removed by the passing of the Legal Aid, Sentencing and Punishment of Offenders Act, which recently received royal assent – Coats is free now to focus on the “implementation challenges” facing the commission.

The tasks ahead
There’s a lot to focus on. The Act narrows the scope of legal aid, meaning that in future the LSC won’t fund, for example, legal actions concerning divorce, employment law and most forms of debt. It also turns the commission – currently a non-departmental public body – into an executive agency of the MoJ, renaming it the Legal Aid Agency.

These changes leave Coats facing three sets of tasks, he says. First, he wants to improve the LSC’s caseworking, ensuring that the backlogs of the past don’t return while improving its financial capabilities, reducing the ‘error rate’ in decision-making, and moving to an online interface with the lawyers who provide legal aid-funded work. Second, he must create an agency that is both tightly bound into the MoJ and able to make decisions independently, with a culture that is “positive, outward-looking, and focuses on the job in hand: the effective and efficient administration of the legal aid system.” And third, he needs the agency to be “an active partner in the justice system”: the Legal Aid Agency (LAA) must, he says, play a role in pursuing the ministry’s ‘Transforming Justice’ reform programme; in reforming the family justice system; and in working with the legal professions to minimise the harm caused by moving to a more parsimonious system of legal aid.

MoJ permanent secretary Suma Chakrabarti (see Moves) will certainly be pleased that Coats is focusing on improving the LSC’s financial skills: its accounts were qualified last year by the National Audit Office – which estimated that £50m of the £2bn disbursed in legal aid in 2010-11 had been paid out in error – and Chakrabarti subsequently endured a difficult time in front of the Public Accounts Committee. “We’ve got to remove the reasons for our qualification, and I’m confident that we can make progress,” comments Coats. “Clearly, we need to get this year’s accounts done to the agreed timetable – and so far, so good. And I want to move from a two per cent error rate towards one per cent: we’ve got a big programme – both working internally, and with providers – to do so.”

The commission needs to “build capability within our finance function”, says Coats. “I’m looking to draw in more talent, to broaden and deepen our capability to improve our systems.” Many of the “underlying issues have been tackled,” he adds, arguing that creating a more “active and powerful” audit committee will help keep the LSC on the right track. “What you’ll see is a tightening of the way we do things, rather than dramatic change.”

Meanwhile, the commission is joining the wave of organisations moving to online service delivery: from this year, law firms handling civil cases will apply for legal aid payments via a new website. Here, Coats has considerable experience: he introduced both the ‘Choose and Book’ IT system linking GPs and hospitals, and the online system for employer-sponsored working visas. Like the working visa system, he comments, the legal aid application procedure “is set by a mixture of us, and case law, and legislation”: the new system will need to both reflect the existing, complex process, and be flexible enough to adapt to fit with court decisions, new law, and Coats’ efforts to streamline the LSC’s operations.

Supplier management will also be crucial to the online service’s success, says Coats: “I’ve already gathered together the suppliers we’ve got working on this programme, and – I hope – asked them the right questions about what issues lie downstream for them, so we can tackle them in advance.” It is, he accepts, useful that MoJ CIO Andy Nelson is also the government’s head of IT – “Having a voice at the centre of government can only help our endeavour!” – but he holds that the real keys to a successful shift online are careful planning, a realistic assessment of the challenges, clarity over the objectives, and close engagement with the suppliers.

The LSC is working with a group of suppliers in the North-East to test its emerging system, he adds, and “having a think about exactly how long the phase-in will take”; while the online system will ultimately become the primary interface for legal aid claims, Coats clearly wants to make sure that his new website will be able to take the strain before pulling the bulk of law firms across from traditional channels.

New agency, new culture
Coats wants to “create an environment where people can succeed”, he says, and he tries to gather the views of his 1500 staff via weekly emails and one-to-one meetings with people across the organisation. Isn’t it difficult to create a positive atmosphere, given the organisation’s plans to shed 400 jobs and the current round of attacks on the civil service by newspapers and politicians? “Everyone understands that these are challenging times,” he replies. “People want certainty about what’s going to happen; they want to plan their lives. So it’s a big part of my job to give them certainty about the transfer to the LAA and the changes to come.” As for criticisms of the civil service, Coats argues that the LSC’s staff are “talented and pretty resilient”; they “understand that they do a complicated and difficult job which will always generate interest.”

Meanwhile, the organisation’s place in the civil service is also changing, as the arm’s-length body becomes an executive agency. This isn’t just a change in formal status – the LSC’s HQ staff have given up their separate offices and moved into Petty France, while most back office functions are being passed to MoJ staff – and Coats hopes that integration into the department will “help us become an influential and active player in the justice system, and a part of government; that can only help relationships with all sorts of different parts of the Whitehall landscape.” He praises the MoJ as “a really good place to work”; in the few short years since the department was created, he says, the staff have created “a real sense of place”. To guard against any danger to his commission’s independence of decision-making as it moves into the ministry, he explains, “the secretary of state will publish the guidelines but not become involved in individual decisions, and I’ll publish an annual report detailing our work to ensure transparency.”

Becoming an executive agency will save money on property and back office services, helping Coats to fit his organisation inside an administration budget that’s shrinking by more than 20 per cent by 2015. Meanwhile, online delivery will cut the costs of assessing legal aid claims – but equally helpful will be the dramatic fall in workload, as £350m is carved out of the current legal aid bill of about £2bn.

Out of scope
The new Act takes whole fields of law out of the scope of legal aid. Child custody and clinical negligence cases, divorce actions, non-asylum immigration disputes, challenges to benefits decisions, and education, employment and breach of contract lawsuits are among a swathe of legal services for which legal aid will no longer be available, while funding for the legal guidance provided by advice centres is also being drastically slimmed down. Many lawyers have been vocal in their opposition to the cuts, whilst academics have warned that they may raise demands on the public purse in other fields. So isn’t Coats worried that the cuts may have unforeseen and damaging consequences? If people can’t get the funding to challenge benefits decisions at a tribunal, won’t that weaken an important driving force for better decision-making in the Department and Work and Pensions? If claimants end up representing themselves in court cases, won’t that waste court time and drive up costs there? If injured parties can’t get legal aid to bring housing or employment law cases, won’t more people end up homeless or unemployed – and thus dependent on the state? If immigrants can’t afford to fight deportation decisions through the courts system, won’t they simply disappear into the black economy?

To all these questions, Coats offers similar answers: this is not his remit. “We’re responsible for the administration of the legal aid system, and the policy team at the ministry is responsible for what we implement,” he says. “The important thing is to set a clear direction that we can now implement, and I think that’s been done. We’ll be implementing what was agreed in Parliament, and our job now is to help providers navigate and implement the changes; to ensure that they’re done in the best way.”

On the subject of the law centres, Coats is sympathetic but immovable. “It’ll be difficult for them,” he says. “We’ve offered our support in helping them understand the reforms and helping them with the difficult choices they’ve got to make.” How can he help centres whose core funding is set to collapse? “With clear information about the rules,” he replies. “With understanding about the procurement process for legal aid contracts. And with ensuring that their voices are heard back at the ministry.”

This last point is an important one. The LSC is the government’s main point of contact with the law professionals who work for and champion the beneficiaries of legal aid; the policy team who make the key decisions on eligibility for funding, meanwhile, are ensconced deep in the MoJ’s fortress-like HQ. Isn’t there a danger that the policymakers will remain largely unaware of the public expense and personal harm created by these cuts? “That’s a risk that we’ve got to avoid,” Coats replies. “The important thing is to set a clear direction, to competently implement it, and to listen to feedback and make improvements where required. It’s my responsibility to make sure that I feed back what I see, and we’re a big source of information for the whole of the criminal justice system.”

A legal hearing aid
Coats will, he adds, be listening very carefully to what law firms and legal professionals tell him about the consequences of the cuts. He may, though, hear just as many complaints about falling fees as about suffering would-be claimants: as the LSC moves from paying an hourly rate to a fee per job, solicitors and barristers have been getting progressively more irritated, and the latest round of cuts are unlikely to improve the relationship. “There’s a lot at stake for them, that’s true,” Coats acknowledges. “It’s a difficult time for them. We have been open-minded and listened to where people have said we should make changes to procurement. At the same time, it’s our job to even-handedly operate that system, but I hope that we’re seen – and I’m sure we are – as an increasingly good partner in challenging times.” As the organisation focuses on reducing the scope of legal aid and becoming an executive agency, plans to shift to a competitive tendering procurement system for criminal cases have been put on hold: “These are open questions, on which we’ll want to hear from the professionals and their representative bodies,” says Coats.

In-keeping with the string of thorny jobs on his CV, Matthew Coats has clearly found himself another tough, controversial appointment. “I like challenging areas of work,” he comments. “I like to make a difference in challenging circumstances.” In the field of immigration, he believes, he was able to help improve the system: “We reduced the overall spend considerably whilst improving processing times, meeting our published service standards, eliminating the backlogs of the past, and I think providing a better service to applicants,” he says. “And I can see parallels with this job.” Now, Coats intends to improve the administration of legal aid, saving money for the taxpayer while reducing errors and offering a better service for law firms. And he can do that most easily, he believes, if he isn’t also worrying about the policy dimensions of his latest politically-sensitive, legally-complex, socially-important job. “Access to justice is a matter for ministers. They need all the information they can get from us, and it’s my job to feed that back,” he says. “But our job is to implement this change, and to bring competent administration to the legal aid system.”

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