Wednesday, 19 March 2008.
The Committee met at quarter to four.
[The Deputy Chairman of Committees (BARONESS PITKEATHLEY) in the Chair.]
Before the Minister moves that the first statutory instrument be considered, I remind noble Lords that in the case of each statutory instrument the Motion before the Committee will be that the Committee do consider the statutory instrument in question. I should perhaps make it clear that the Motion to approve the statutory instrument will be moved in the Chamber in the usual way.
Pension Protection Fund (Pension Compensation Cap) Order 2008
rose to move, That the Grand Committee do report to the House that it has considered the Pension Protection Fund (Pension Compensation Cap) Order 2008.
The noble Lord said: I shall speak also to the Occupational Pension Schemes (Levies) (Amendment) Regulations 2008 and the Occupational Pension Schemes (Levy Ceiling) Order 2008.
Before turning to the detail of these instruments, I should like to take this opportunity to commend to noble Lords the work of the Pension Protection Fund. The work of Lawrence Churchill and Partha Dasgupta, the body’s chairman and chief executive respectively, and the board and staff of the PPF have within a short time established the PPF as a key and reputable financial institution. When we debated the 2007 versions of these instruments around this time last year, three schemes, with a total of 275 people, had transferred into the PPF. By the beginning of March this year, 21 schemes had transferred into the PPF, with around 9,000 people who are either receiving PPF compensation or due to receive it in the future. By the end of March, the PPF estimates that 50 schemes will have transferred in, providing compensation to 18,000 people. This increase in the numbers is testament to the efforts of the PPF and is welcomed, I am sure, by all Members of your Lordships' House.
I turn to the first instrument for debate: the Pension Protection Fund (Pension Compensation Cap) Order 2008. As noble Lords are aware, a cap on the level of compensation is applied to those scheme members who are below their scheme's normal pension age immediately before the employer's insolvency event. These members are entitled to the 90 per cent level of the compensation when they retire.
The compensation cap for 2007-08 is £29,928.56 at age 65. When calculating a member's compensation entitlement, the PPF applies the cap before compensation is reduced to the 90 per cent level. This means that the total value of compensation payments for members below normal pension age does not exceed, for 2007-08, £26,935.70 a year at age 65. This amount is adjusted depending on age to ensure that the actuarial value of the compensation package remains the same.
Under the Pensions Act 2004, increases to the compensation cap are linked to increases in the general level of earnings. To increase the compensation cap for 2008-09 we must consider the general level of earnings in Britain. We use the average earnings index published by the Office for National Statistics each tax year. We concluded that there has been an increase of 3.1 per cent in the level of earnings. An increase to the current compensation cap of 3.1 per cent gives a cap of £30,856.35 for the 2008-09 tax year. This means that the total value of compensation payments for members below normal pension age shall not exceed £27,770.72 for the new tax year.
The new cap will apply to members who first become entitled to compensation at the 90 per cent level on or after 1 April 2008. The pension compensation cap order ensures that the level of the compensation cap is maintained in line with the increase in earnings as required under the Pensions Act 2004.
I shall now move on to the second instrument before us: the Occupational Pension Schemes (Levies) (Amendment) Regulations 2008. These regulations relate to the PPF administration levy which funds the day-to-day running costs of the PPF. The regulations substitute new amounts to be used in calculating the amount payable in respect of the PPF administration levy for the financial year starting 1 April 2008 and each financial year after that.
The administration levy for 2008-09 has been set to recoup £22 million, a £2 million increase on the £20 million set last year. I should like to explain to noble Lords why we believe this increase is appropriate. The proposed rates help to recover a collection shortfall of £2.7 million that has built up since the PPF was established. The £22 million also reflects the increased running costs of the PPF as a growing number of schemes undertake the assessment process and transfer into the PPF. I have noted how the number of schemes within the PPF has grown; this growth brings additional costs to the PPF.
We recognise that as more schemes enter the PPF, the cost of administering compensation becomes an increasing proportion of the administration levy. To combat this, we have recently laid the Pension Protection Fund (Prescribed Payments) Regulations 2008 before Parliament. These regulations will provide that the costs of administering compensation shall, from 1 April 2008, become payable from the Pension Protection Fund itself, meaning that the administration levy will no longer be inflated by these amounts—which are estimated at about £2 million in 2008-09. This is consistent with industry practice, where these costs are generally met from the assets of defined-benefit occupational pension schemes.
These regulations have been welcomed by consultation respondents, including the NAPF. I would like to assure noble Lords that the PPF will ensure that these costs will be presented identifiably in its annual report and accounts for 2008-09 and onwards to ensure appropriate transparency for the administrative costs of the PPF.
The PPF administration levy will continue to fund those administrative costs that are not directly related to the mechanics of paying compensation; for example, the costs of calculating and collecting the PPF levy, the costs of managing the assessment process, and so on. The PPF administration levy strikes a fair balance between the burden on levy payers and the ability of the PPF to carry out its statutory duties. We will, however, continue to work with the PPF to ensure that levy payers get value for money.
In contrast to previous regulations, the figures in these amendments will apply to all future years unless amended further. This means that regulations will not be brought forward in future unless a change in the levy is required.
I turn, finally, to the Occupational Pension Schemes (Levy Ceiling) Order 2008. The pension protection levy is the responsibility of the board of the Pension Protection Fund. It is one of the ways in which the compensation that the PPF provides is paid for. The levy ceiling, the subject of this order, is one of the statutory controls on the pension protection levy. It puts a limit on the amount that the board can raise in any one year. The levy ceiling for 2007-08 was set at £804.45 million. Under the Pensions Act 2004, the levy ceiling is normally increased annually. The increase is usually in line with the general level of earnings in Great Britain in the period of 12 months ending with 31 July of the previous financial year. The Occupational Pension Schemes (Levy Ceiling) Order 2008 uprates the levy ceiling by 3.6 per cent so that the levy ceiling for the financial year ending 31 March 2009 is £833,410,200.
The board of the PPF has determined that it needs to collect £675 million for 2007-08 through the pension protection levy in order to ensure secure funding for people’s compensation. The board has also announced that it intends to hold the levy stable for the next three financial years subject to indexation against earnings and there being no significant changes to the level of risk that the PPF faces.
Finally, I should like to address a query raised in another place, where these instruments were debated on Monday, about the territorial extent of these instruments. Social security and pensions are transferred matters under the Northern Ireland Act 1998. The instruments therefore apply to Great Britain only, as required by Section 323 of the Pensions Act 2004. I understand that the Department for Social Development in Northern Ireland proposes to make corresponding statutory rules for Northern Ireland.
I confirm that I am satisfied that the statutory instruments before us are compatible with the rights in the European Convention on Human Rights. These three statutory instruments provide that the PPF compensation cap and levy ceiling are uprated in line with increases in average earnings and that the administrative functions of the PPF are properly funded so that it can carry out the important task that Parliament has given to it. I commend these orders and regulations to the Committee. I beg to move.
Moved, That the Grand Committee do report to the House that it has considered the Pension Protection Fund (Pension Compensation Cap) Order 2008. 12th report from the Joint Committee on Statutory Instruments.—(Lord McKenzie of Luton.)
I am grateful to the Minister for introducing these three orders together—which, of course, is exactly what he and I debated at roughly this time last year. But I think that I will yet again have to make a suggestion, as I did on some uprating orders the other day, because the Minister has already given the answer to my first question, which was why the two inflation figures on the level of earnings were different; and obviously I use the term “inflation” somewhat loosely. He explains that the discrepancy of half of 1 per cent was due solely to the starting dates of the period under review for the two different orders. Would it not make sense, therefore, to alter things so that the same period is used for both the compensation cap and the levy? If the will is there, so are the means in the forthcoming Pensions Bill.
The Occupational Pension Schemes (Levy Ceiling) Order does just what the title implies: it sets a ceiling for the Pension Protection Fund—the statutory insurance scheme for direct-benefit pensions, as I like to call it—which, though young, is clearly settling down well. I agree with the Minister on his plaudits. The ceiling is the amount that the PPF may impose by way of insurance premiums. The ceiling was set at £773 million for the year ending 2007, against an estimated need of £575 million. The actual figures should have been produced by now, and it would be instructive to know how accurate those were. These are the figures that the Minister gave us in our debate last year. I ask that especially because last year he told us that there was a historical shortfall in collection during the first two years of the scheme. Has that been sorted out?
Last year the Minister also told us that, on 1 March 2007, three schemes totalling 275 people had been admitted, and that around 66 of those were being paid an average of £3,700 a year. There were 147 further schemes, covering 102,000 scheme members in the pipeline at that stage. The Minister has just told us that the current level of PPF involvement will be 50 schemes covering 18,000 members by the end of March. It seems to have taken quite a long time to get down from 147 schemes to 50 schemes, and I hope the Minister will say something about that when he replies. Clearly, the 147 further schemes that he mentioned on the previous occasion have not yet completed the process of coming into the PPF regime.
The Minister will not be surprised that the problems of Northern Rock figure quite highly this year. That bank is in a state that we would not like any firm with a pension scheme to be in. The 2006 accounts noted a deficit in the DB scheme that must have become much worse since the bank’s collapse. Does the Minister expect the scheme to be a candidate for the PPF?
Lastly, in the past two years, the stock market has bounced about like flotsam on the sea. Almost daily, we hear differing accounts of the surplus or deficit in pension schemes of billions of pounds in either direction. I am sure that the Minister will cross his heart and say that this has nothing to do with the Government, but I will take issue with him because it is. In the past, the Government have prided themselves on rising growth. They cannot very well duck responsibility now that their own forecast of growth in the economy has had to be downgraded by 75 basis points. The result of this is more DB schemes closing to new entrants and, inevitably, a longer queue to join the PPR.
In the Occupational Pension Schemes (Levy Ceiling) Order 2008, the levy consists of two parts: an administrative levy and a risk-based levy. Will the Minister be good enough to tell us how much the risk-based levy will be next year? Even better, will he write to the noble Lord, Lord Kirkwood, and me with the annual amounts of risk-based levy that have been raised so far? It seems obvious to me at least that, as the economy weakens, the risk to DB schemes will increase dramatically. There are already complaints from operators of schemes in deficit who feel they are being charged excessive amounts under the risk-based levy, and the firms who sponsor them and who are already financially weak are having to invest in their scheme’s deficit at the expense of their normal trading activities. This is not a happy situation.
The Minister made a point about Northern Ireland. I had the privilege of being a Minister in Northern Ireland some years ago, and I am well aware that the Northern Ireland statute book is on the whole sacred. I shall debate an order with another Minister early next week on legislation that is not as sacred as the Government like to make out. There will of course be a Northern Ireland order, and I suspect that it will cover points that are identical to those in the orders that we are discussing. Having said that, I do not object to the orders or regulations at all.
I am privileged to follow the noble Lord, Lord Skelmersdale, in contributing to these important but slightly technical orders. I concur with much of what he said, but I have some questions for the Minister about the Pension Protection Fund.
I concur with the view that the Minister expressed right at the beginning that Mr Lawrence Churchill and his colleagues have done well. The Pension Protection Fund was set up under the 2004 Act and is a public corporation in its own right. It is possibly only about now that anyone could reasonably expect to get a feel for how the organisation is measuring up to the objectives that were set for it by Parliament in 2004. When the Minister replies, will he say a little more about exactly how the fund is measuring up to its responsibilities, particularly in relation to the global budget expectations? It has sources of income over and above the levies. First, it has recovered assets from insolvent employers; the last figures that I saw for last year showed that it had an income of something like £400 million from that source. Secondly, it has assets of schemes that are transferred in; the 2007 figures show that it has £400-odd million from that secondary source. Thirdly, it has investments and returns; the last calculation that I saw was that something like £5 billion in investments were anticipated to crystallise and be available to the fund by the end of the financial year 2008-09. It would be helpful to the Committee in contemplating these orders to get some feel for the updated figures. I guess that they will be audited to the end of March, but if the Minister has any 2008 rather than 2007 figures, that would assist our consideration of the orders.
A couple of other questions flow from some of the issues raised by the noble Lord, Lord Skelmersdale. First, I imagine that there have been staff increases over the last 12 months. I do not need to tell the Minister that the rest of the department is facing Gershon cuts, head-count restrictions and a whole series of other severe financial constraints. Do the Gershon efficiency savings apply to the PPF? Have staff increases occurred over the past 12 months? Are those due to stabilise or can he foresee them increasing in the period beyond which these orders cover?
The noble Lord, Lord Skelmersdale, referred to the fact that the financial context of these orders is very different from last year. It is not just Northern Rock but Bear Stearns and everything that goes with that. The Minister was careful to say that there is a proposal to freeze the levy for the next three years subject to an addition for inflation. He then said that it would not change unless there was a significant change to the long-term risk. I would like some idea of what that means. Let us suppose that the economy really goes upside down. None of us wishes that, but what is really meant by “significant change” to the long-term risk? If significant changes were to occur, I would like to know what they were. I would like an assurance that they would be discussed in the House in circumstances where the economy dictated that they should.
I was in the other place in 2004 when this legislation went through and I have a clear recollection that the Minister has the ability to override compensation payments and some other Pension Protection Fund benefits if he feels it is in the public interest to do so. I would like an assurance that those powers are still available to the Minister should he have to use them if the economic situation worsens in future.
As regards how the protection fund is operating overall, as the number of defined-benefit schemes decreases—I think that we are seeing that in the marketplace—the remaining schemes will obviously attract PPF levies. If there are a smaller number of them, the financial burden will become greater on those that are left. I would like an assurance that the Government have plans to ensure that if economic circumstances worsen severely in a short time, there will be a plan B to take account of the fact that this number will decrease and the burden may increase, and the fact that that might be inimical to the whole provision of occupational pension schemes in future.
I turn to the only order that I think is of any significance. The orders that deal with the levy ceiling and the cap are perfectly in order. They are automatic formulations that flow from the inflation figures. However, the Occupational Pension Schemes (Levies) (Amendment) Regulations are slightly more controversial simply because, if for no other reason, the increases that they suggest are in excess of inflation. The Minister sought to address that. I say by way of preamble that the consultation was an extremely good exercise. I commend and acknowledge the Government and department for doing that as it flushed out concerns that should be properly addressed. For example, my understanding is that the levy did not realise all that it was expected to in earlier years, particularly in the last financial year. As far as I can see that is because some of the scheme data were not good. I do not know what that means. Perhaps some of the scheme data were wrong or inaccurate or had to be reformulated in a way that made more sense in terms of the pension fund requirements. I would like further explanation on that. I believe that we were trying to raise £20 million but that we raised only £19 million. That seems to be attributed in some strange way to the incomplete data that were provided. Might that apply to occupational schemes in other ways? Is it a case of the Government shining a torch into corners and discovering that some of these schemes have, if I can use this colloquialism, some quite duff data? That would be a worry. If this is a symptom of a wider level of inaccuracy in the occupational pension scheme industry, Parliament might want to know more about it. I hope the Minister can reassure me about that.
There was an in-year increase of £1.5 million in PPF administration costs in 2007-08, as I read the orders. That has led to an anticipated deficit of around £2.7 million—the Minister said something about that—which has to be carried forward. It is not clear how that anticipated deficit arose. Maybe the levy was set at the wrong level, as I have explained. Maybe it was due to the additional recruitment of staff; if so, as I said, we should be told how many additional staff have been taken on. Maybe it was pay for the work involved in completing the schemes and the compensation process, which I understand takes as long as two years, a pretty challenging period of time to, effectively, wind up an occupational pension scheme. That is the target that was set for the PPF when it was established in 2004, and I get no sense from the orders of whether they have managed to keep the assessment of operations within that timescale. If they do not, that will cause additional costs. It would be helpful if we were told a little bit about the two-year assessment of operations to bring schemes into the Pension Protection Fund.
Having read what is available to the Committee, I am not sure what proportion of the proposed 2008-09 levy relates to final recovery by the DWP of set-up costs. The department made it plain that there would be a cost in setting this all up and that it would be clawed back over a period of years. This is the final year of the clawback of the set-up costs, but it is not clear what volume of money is involved because it is presumably non-recurrent. It would be good to know that.
I have a couple of other quick points to make before I sit down. I may have missed this, but I would like to know what has happened to the Occupational and Personal Pension Schemes (General Levy) (Amendment) Regulations. They apply on a wider scale to OPAS, the Pensions Regulator and the Pensions Ombudsman but the regulations should all be part and parcel of the same kind of consideration. Are they still in gestation, or have they already passed? The general levy regulations need to be considered in concert with the three orders that are with us today.
I have a slight problem with rounding errors. This was picked up in the consultation, and it has caused some problems in the recent past. Can we have some assurances that that difficulty has now been identified and dealt with? It could cause problems in the future if it were left to fester.
There is no real explanation of the process of management and scrutiny that leads to the additional costs that are levied by these orders. It is clear to me that the department and the National Audit Office are able to keep an eye on what is going on through annual reports and other reporting processes, but presumably the non-executive members of the Pension Protection Fund board have an explicit role to secure efficiency, transparency and clear checks on how the board is dealing with the public money that is invested in it to do its work.
Finally, if the levy is frozen and there are no sudden jolts to the system by way of increased risks, do I understand that in the future we will not consider these orders unless things change? If that is what the Minister is saying, does that mean that they go to the negative procedure or do we just not ever see them again? Is that the case if the conditions he has explained continue to obtain and are not disturbed in any way? If that is the case, it is a bit early to start moving away from this important level of parliamentary scrutiny. While it is clear that no one is looking for extra sittings in Grand Committee or anything else, and I concur with the noble Lord, Lord Skelmersdale, that these orders are by and large perfectly supportable, that is a different matter altogether from removing them from the scrutiny of Parliament. If the Minister is saying that we are going to be denied opportunities like this in circumstances where the levies are not increased, I for one would be slightly nervous about that. I hope that the Minister can clarify my understanding of what he has just said. I am perfectly happy to have my interpretation of his introduction corrected. In the mean time, I agree with the orders.
I start by thanking both noble Lords for their contributions and their support for these three orders, notwithstanding that that support has come with a whole raft of questions which I shall try to answer. I shall deal with as many as I can, but perhaps I may start by dealing with the last point made by the noble Lord, Lord Kirkwood. The change to the administrative levy that we are dealing with is that if the levy itself does not have to change because the rate remains unchanged, there is no need to come back for an annual confirmation of it. That is the particular change being made here and it is proposed to try to maintain the levy at the present rate for a period of time. It is to avoid an entirely unnecessary process.
The noble Lord, Lord Skelmersdale, asked about the various rates by which we change the items before us and whether we could not align them. In theory we could align them with, for example, an April figure. However, when the policy on this was developed it was felt that more recent figures would be better where there is no need to stay in line with social security policy. It is a practical matter and does not make much difference to our deliberations. He also raised the issue of Northern Rock, and it is interesting to note the ingenuity of Members opposite in introducing it at every opportunity. I should say that Northern Rock has a defined-benefit scheme, but there is no insolvency event and therefore it is not in assessment. The issue does not arise.
Both noble Lords talked generally about the backdrop to the economy, in particular the international credit crunch and its ramifications for the UK economy. Obviously it impacts on growth, as the Budget Statement has made clear, but I should remind both noble Lords that we are still talking about growth in the economy. It may be less than originally forecast, but it is still growth.
Indeed we will see, but Chancellors’ predictions since 1997 have been pretty good. Let us look at the record. We have had a period of continuing growth under this Government that is unprecedented. However, perhaps we should debate these issues on another occasion.
The noble Lord, Lord Skelmersdale, asked about the relative proportions of the risk-based levy and the scheme-based levy. I have a schedule which I am struggling to locate, so perhaps I will move on to another point while my officials find it for me.
The noble Lord asked about the assessment process and whether things were proceeding as quickly as we would want. The PPF is broadly in line with the business plan for completing assessments, and the government target for schemes to wind up is two years. Obviously, there are often complex legal issues associated with these processes, but the assessment process is in line with expectations.
On the previous point, on the basis of the levy that it was sought to collect for 2007-08, the figure was £675 million in total, of which the risk-based component was 80 per cent of £540 million, and the scheme-based element was 20 per cent of £135 million. I do not have the latest figures on how much of that has been collected, but for levy year 2007-08, 6,786 invoices have been issued, to a value of £476.1 million, and £334 million has already been collected for that levy year. In terms of collections, I am not sure whether it is easy to identify which component of the levy it is, but I will have a look at that and write to the noble Lord if that would help.
The noble Lord, Lord Kirkwood, asked whether Gershon applied and what was happening to staff numbers. We expect staff numbers in the PPF to stabilise. Clearly, in the early years there was a progression in administration costs as the set-up was put in place, but we are approaching a time when it can be stabilised, and that is what is expected in terms of staff numbers. The noble Lord asked about powers to reduce compensation. There are several powers to reduce compensation in extremis following the recommendations of the board and consultation. I stress that we do not anticipate any immediate need for those powers to be exercised; but they are clearly an important safeguard and the noble Lord made a fair point on that.
The noble Lord also asked about the number of levy payers and what will happen if that falls. Currently, there are about 7,800 levy payers but only 50 schemes in the PPF. The PPF will consult in the summer on the future of the levy, including ensuring that the levy is sustainable and fair. The noble Lord also asked about administration costs, and I think that he was trying to reconcile the various figures that were floating around. It may be helpful if I set that out as follows. For the current year, the expenditure in terms of routine resource costs was £17.7 million, with a PPF start-up cost of £3 million, so the total expenditure was estimated to be £20.7 million. There was a deficit carried forward from the previous year of £1 million, and the levy receipts were £19 million, and that leads to a deficit at the end of the current year estimated to be £2.7 million. If you project that forward over the next three years, the resource costs for 2008-09 are expected to be a smidgen under £20 million, at £19.9 million. If you take account of the deficit that must be funded, the £2.7 million, there will be a deficit at the end of next year of £0.6 million, but with a £22 million levy for next year. On the basis of three years of levy at £22 million, at the end of that three-year period a small surplus should arise. I hope that has put the matter in context.
The noble Lord, Lord Skelmersdale, asked about Northern Ireland, and he confirmed that he was aware of and understood the process that I outlined. We have dealt with the issue about the risk-based levy and the scheme-based levy. The noble Lord, Lord Kirkwood, asked what would happen if there was a downturn and whether that would affect the levy. The size of the levy estimate will be limited by the levy ceiling, which is an important safeguard that has been agreed by Parliament, which is why we have it before us tonight. The PPF can reduce the levy estimate if necessary.
The noble Lord asked about scheme data. The Pensions Regulator has a team that is dedicated to improving the administration and governance of schemes. Most members are in large, well-run schemes, but again we need to be ever vigilant to ensure that scheme data are good and robust.
I believe that I have answered each of the questions that have been asked, although the noble Lord, Lord Skelmersdale, looks as though he will challenge me on the basis that I have not. Perhaps I should ask him to do so.
Although I am extremely grateful for the myriad figures that the Minister has produced, not least on the risk-based element of the levy, I commented towards the end of my few words that it is becoming increasingly difficult for firms which feel obliged to top-up pension schemes in order to reduce the risk-based levy that they would otherwise attract. I asked whether he had any comments to make on that subject.
If one effect of the risk-based component of the levy is that it encourages schemes to manage their risks better, that is a really good outcome. It is right that some of the shortfalls in outcomes compared with the original estimates for some of the levies arise because the schemes have improved their risk management and there is therefore a smaller component. We should welcome that outcome, which may be part of why the scheme is designed that way.
It would be odd to do something simply to try to reduce the levy. If there are risks in the scheme and the employer is a sponsoring employer with responsibility for that scheme, it is entirely reasonable that the employer should direct their attention to how that scheme can be properly funded. I therefore do not quite follow the noble Lord’s point. I do not believe that it could be argued that the structure of the levy drives sponsoring employers into difficulties. The focus and construction of the levy could encourage schemes to be appropriately funded. That is in part what is happening. I hope that that has dealt with the point that the noble Lord wanted covered and that it has dealt with each of the other points that noble Lords have made.
I was trying to keep up with the figures, which obviously is difficult because the process is complicated and the picture changes all the time, but it would be very helpful if the noble Lord, Lord Skelmersdale, and I could get written confirmation of the latest available figures for the number of members and schemes in the assessment process. It may change by the end of the financial year, but I do not know. Perhaps we should hold our horses and wait until that happens, or perhaps we should be told to hold the horses completely until annual reports are produced when this will all become clear. An early indication of what has happened in the past 12 months since the last orders were considered would certainly assist me, if no one else.
I am happy to write to the noble Lord with the most up-to-date assessment that we have of what is happening. I visited the Pension Protection Fund on Friday and saw some of the charts that it has on the wall and the plans that it has to deal with all this, so I am sure that we can give him very up-to-date information. That reminds me of one other point that the noble Lord made about accountability for all this. Clearly an annual report and accounts of the Pension Protection Fund must be laid before Parliament, and the usual channels will have the usual opportunities to debate them if they wish. If that has satisfied each of the noble Lords, I commend the orders to them.
On Question, Motion agreed to.
Occupational Pension Schemes (Levies) (Amendment) Regulations 2008
I beg to move the Motion standing in my name on the Order Paper.
Moved, That the Grand Committee do report to the House that it has considered the Occupational Pension Schemes (Levies) (Amendment) Regulations 2008. 12th Report from the Joint Committee on Statutory Instruments.—(Lord McKenzie of Luton.)
On Question, Motion agreed to.
Occupational Pension Schemes (Levy Ceiling) Order 2008
I beg to move the Motion standing in my name on the Order Paper.
Moved, That the Grand Committee do report to the House that it has considered the Occupational Pension Schemes (Levy Ceiling) Order 2008. 11th Report from the Joint Committee on Statutory Instruments.—(Lord McKenzie of Luton.)
On Question, Motion agreed to.
Offender Management Act 2007 (Consequential Amendments) Order 2008
rose to move, That the Grand Committee do report to the House that it has considered the Offender Management Act 2007 (Consequential Amendments) Order 2008.
The noble Lord said: This order makes amendments across the statute book that are consequential to Part 1 of the Offender Management Act 2007, which contains the new arrangements for the provision of probation services. The amendments made by the order are largely technical in nature—where there are references in legislation to the current probation structure of local probation boards, the order amends that legislation to include references to the new probation arrangements. By making these amendments we are ensuring that the duties and responsibilities required of a local probation board are applied equally to a probation trust and, where relevant, other providers of probation services. The amendments do not result in any policy change.
Although a number of consequential amendments are made by Schedule 3 to the Offender Management Act 2007, it was made clear during the passage through Parliament of the then Offender Management Bill that those consequential amendments were illustrative of the Ministry of Justice’s approach and that the ministry would subsequently put before Parliament further consequential amendments using the power in Section 38. My noble and learned friend Lady Scotland said:
“As we have previously identified, a large number of consequential amendments need to be made to reflect the fact that probation boards will cease to exist in due course. Clause 35”—
now Section 38—
“enables consequential amendments to be made by order after the Bill is enacted, and this is the mechanism that we plan to use for most of them. However, we are making a small number in the Bill in areas that have raised particular interest and where we think it would be helpful to show the Committee how we are approaching these matters” [Official Report, 12/06/07; col. 1681.]
The provisions in Part 1 of the Offender Management Act 2007 make two distinct changes from the previous legislation on probation provision, the Criminal Justice and Court Services Act 2000. First, the Offender Management Act 2007 places the statutory duty for the provision of probation services on to the Secretary of State. Under the 2000 Act, this statutory duty had been placed on local probation boards. Secondly, the Offender Management Act 2007 allows for the establishment of probation trusts, as the public sector bodies to provide probation services, and to eventually replace local probation boards.
The Secretary of State can either provide the probation provision that he is now responsible for himself, or he will be able to contract with others in the public, private or voluntary sector known as “providers of probation services” to deliver the probation provision. One key element of the probation provision is, however, retained by the public sector, and that is assistance to courts. This can be more widely contracted, beyond the public sector, only after agreement by both Houses of Parliament via an order. Further, there has been a commitment to retain the assistance to court work within the public sector for at least three years.
The amendments made by this order ensure that the duties and responsibilities placed on local probation boards across the statute book will apply to providers of probation services with whom the Secretary of State has contracted under the new probation arrangements.
During Committee stage, my noble and learned friend Lady Scotland further said:
“I appreciate that this has been a lengthy and detailed explanation of the amendment, but I hope that it has shown the Committee how we intend to ensure that the existing duties on local probation boards are carried forward fully to the new arrangements envisaged by the Bill. We remain wholly committed to maintaining probation commitments not just to children’s services but towards the full range of partnerships in which they currently participate”.—[Official Report, 12/6/07; cols. 1681-3.]
The amendments in the order can be divided into three broad categories. The first, and the largest, category relates to provisions on core probation activities and duties such as the supervision of offenders on licence or as part of a community order and the provision of information to victims of a crime. Section 199 of the Criminal Justice Act 2003, for example, contains provisions on unpaid work requirements that are made as part of a community order or suspended sentence order. A court can impose such a requirement only if it is satisfied that the offender is a suitable person to perform the work. In taking this decision, the court may hear from an appropriate officer, who in the case of adult offenders is an officer of a local probation board. The order updates the definition of appropriate officer to include an officer of a provider of probation services.
The second category relates to legislation that places requirements on local organisations, including local probation boards, to work collaboratively to achieve certain goals such as the reduction of crime and disorder in their local government area. Such requirements also need to be placed on providers of probation services under the new arrangements.
The third category concerns statutory obligations placed on public authorities, including local probation boards. The order ensures that these requirements are placed on probation trusts as the public sector providers, and, where appropriate, on other probation providers in relation to their activities of a public nature under their contractual arrangements with the Secretary of State for probation provision. The Disability Discrimination (Public Authorities) (Statutory Duties) Regulations 2005, for example, require listed public authorities to produce and update at regular intervals a discrimination equality scheme. We have included both probation trusts and providers of probation services where they carry out activities of a public nature in this list.
I am sure noble Lords will have noted that the approach adopted with the consequential amendments in the order ensures that legislation referring to probation arrangements will refer to both the current arrangements of local probation boards and the new probation arrangements. This reflects the phased approach to establishing the new probation arrangements that I spoke of briefly earlier, and makes the legislation easier to understand. The order therefore seeks to include a reference to the new arrangements under the Offender Management Act 2007 alongside current arrangements, rather than simply replacing references to the previous legislation. Once all local probation boards have been abolished, we will repeal references to local probation boards, again using the power in Section 38 of the Offender Management Act 2007.
The order also makes the necessary amendments to legislation to reflect the new name of the probation inspectorate under Section 12 of the Offender Management Act 2007. From 1 April, the probation inspectorate will be called Her Majesty’s Inspectorate of Probation for England and Wales. The new name reflects the broader objective of the new probation arrangements of developing a range of providers of probation services that include private and third sector organisations. I beg to move.
Moved, That the Grand Committee do report to the House that it has considered the Offender Management Act 2007 (Consequential Amendments) Order 2008. 10th Report from the Joint Committee on Statutory Instruments.—(Lord Hunt of Kings Heath.)
I thank the Minister for that detailed explanation of what he, and the title of the order, make clear are only consequential amendments to the Offender Management Act 2007. It is important that the regulations are affirmative, even though the amendments are only consequential, because the order amends primary legislation. Governments of whatever persuasion should be wary of that unless it is unavoidable. The order amends Acts going back as far as the Reserve and Auxiliary Forces (Protection of Civil Interests) Act 1951 and right up to Acts of Parliament of only last year—I do not think it amends any Acts of this year—and various orders of various dates. For that reason, I am grateful for the Minister’s detailed explanation. I am also grateful for the Explanatory Notes that the Minister’s department provided, which brings me to my only question.
The noble Lord will remember that during the passage of the Bill, the noble and learned Baroness, Lady Scotland, said in response to amendments tabled by the noble Baronesses, Lady Gibson and Lady Turner:
“It is of course our intention that probation providers should adhere to the gender and disability equality duties under the new arrangements. This is one of a range of consequential amendments to secondary legislation”.—[Official Report, 23/5/07; col. 687.]
Some of that was done by Schedule 3 to the Act, and I presume that some will be done this order. I understand that at some point later in the summer, the noble Lord’s department, presumably in consultation with a whole range of other departments, will bring forward a new draft equality Act that will bring together a wide range of matters in this field. Will that require yet further amendments to the Offender Management Act and the other legislation that we are discussing, and will further amendments be required in due course? The simple question is: is this only the first of many Offender Management Act 2007 consequential amendments orders?
We, too, thank the Minister for his very detailed explanation and particularly for the useful Explanatory Memorandum. I am rather new to this area and was not involved in the Criminal Justice and Courts Services Act 2000 and the Criminal Justice Act 2003, so I appreciate having the background information.
We support the order, which is designed inter alia to reflect new designations to the existing architecture. In Committee we were told that a number of consequential amendments would be required since the probation boards would cease to exist at some point. We therefore recognise that this is more or less just a tidying-up legislative exercise. We welcome a clear statement that the principles of equality and anti-discrimination will apply to the providers of services and that this order makes that possible.
We are where we are in terms of the existing probation boards going. We were not entirely confident that the replacements would work and we rehearsed those arguments but, again, this is a consequence of the 2000 Act so I will not go back over that area. Nevertheless, paragraph 5 of the Explanatory Memorandum refers to the territorial extent and the application of the order. It would be helpful to know about the territorial extent and application in Scotland. The instrument states that it applies to the United Kingdom, but we cannot see how it will sit with the Scottish system which, as we know, is rather different. Can the Minister clarify that for us?
Apropos the expansion of the providers of probation services as detailed in paragraph 7.5 of the Explanatory Memorandum, can the Minister indicate whether it is possible for us to see the draft contractual arrangements between the probation trusts and the new public service providers of services? We really want to know how the arrangements differ from the private and third sectors in terms of the contracts that might apply to those. Moreover, while we are reassured that the changes from local to national and regional contracting will be approached cautiously, can the Minister elaborate on the timeframe for the rollout of these changes? The memorandum states that a cautious approach will be taken in moving from local arrangements, those we know and are comfortable with, to regional and national contracting. It will be a significant change and no doubt certain repercussions will attend upon it.
During the passage of the 2000 Act we made strong representations that the voluntary sector should not be disadvantaged in the way that contractual arrangements are defined. Can the Minister explain how this will be done? Does he intend to consult the voluntary sector to ensure that it suffers no disadvantage when applying for contracts? Finally, other than these few points, we hope that the changes envisaged in the order will go some way to improving the architecture and operational efficiency of NOMS, and offender management more generally.
I thank both the noble Lord, Lord Henley, and the noble Baroness, Lady Falkner, for their generally welcoming remarks and the work done in the preparation of the Explanatory Memorandum. I appreciate that, although the noble Lord, Lord Henley, is a veteran of this debate, the noble Baroness and I are very new to the matter. Of course, in our debates on the Criminal Justice and Immigration Bill, the critical importance of an effective probation service as part of offender management programmes has come through clearly. I note that the noble Baroness, Lady Falkner, tantalisingly almost invited me to have a Second Reading-type debate with her on the changes, but then drew back. I will not rise to that temptation. We think the changes will help us to deliver a better service. We are clearly all united in paying tribute to the tremendous work of the probation service in recent years, and their critical importance in years to come.
On the timing, we are commencing the new provisions for the first six areas on 1 April 2008. Those six areas will be Dyfed Powys, Humberside, Leicestershire and Rutland, Merseyside, south Wales, and west Mercia. On contractual arrangements, I understand the point of the noble Baroness. She will know that, as always with contractual arrangements, there are commercial confidentiality issues which mean that I could not let her have the information she requests. However, the principles that should apply for service contracts and contracts with the public, private and not-for-profit sectors should be the same. The not-for-profit sector has nothing to fear from these arrangements. I said in my opening remarks that they apply to the not-for-profit sector, but am happy to ensure that there is appropriate consultation with that sector on these matters, as the noble Baroness requested.
The noble Baroness also asked me about England, Scotland and Wales. Of course, the order lends itself to that question. I confirm that Part 1 of the Act is limited to England and Wales. There are references to Scottish legislation in the order because the order amends a number of Acts that relate wholly or partially to Scotland or Northern Ireland. Essentially, they relate to the transfer of offenders from Scotland or Northern Ireland to England or Wales and vice versa. So the amendments ensure that the relevant duties and obligations in those transfers apply equally to providers of probation services as they do to local probation boards. I hope that that provides a suitable explanation.
I certainly agree with the noble Lord, Lord Henley, about the importance of affirmative orders when it comes to amending primary legislation, which is why we are here today. He raised the important question of gender, race and disability legislation. I assure him that the amendments to gender, race and disability legislation, ensuring that both probation trusts and other providers of probation services are required to meet statutory obligations of both the local probation boards and other suppliers of public sector services, are covered in these orders. The noble Lord then teased me about legislation and further potential changes to be made, as he often does. Obviously, we will have to see on future equality legislation. We do not envisage any further amendments in relation to this issue, although, as I have said, there is an order that will enable us to repeal references to local probation boards when the whole system is established. We already have that provision in place.
If there are no other questions, I shall simply thank both noble Lords for their thoughtful and constructive remarks, and welcome my noble friend to his place.
On Question, Motion agreed to.
Safeguarding Vulnerable Groups Act 2006 (Prescribed Criteria) (Transitional Provisions) Regulations 2008
rose to move, That the Grand Committee do report to the House that it has considered the Safeguarding Vulnerable Groups Act 2006 (Prescribed Criteria) (Transitional Provisions) Regulations 2008.
The noble Lord said: I am grateful to both the Joint Committee on Statutory Instruments and to the Merits Committee for their careful consideration of these regulations. Noble Lords will be aware that neither committee commented or thought that the House’s attention should be drawn to these regulations.
The regulations arise out of two elements of the legislation. First, the Act created a new independent safeguarding authority—ISA—which was referred to in the legislation which the few of us here today debated at exhaustive length as the independent barring board. It is now called the Independent Safeguarding Authority. Secondly, the Act will establish a scheme to prevent those who pose a risk of harm to children or vulnerable adults getting access to them through their work.
The Independent Safeguarding Authority was formally established in January 2008, with Sir Roger Singleton as chair and Adrian McAllister as chief executive. It is now conducting the transitional and preparatory work necessary for the new scheme, and the regulations are part of that process. As part of the new scheme, we want the ISA to ensure that when its new barred list comes into effect, those persons currently barred from working with children and vulnerable adults will continue to be barred if the ISA deems them to pose sufficient risk. I have placed in the House Library an information note for noble Lords to support this debate, which explains this process and the future proposals that relate to the regulations. I will not reproduce that detail in my opening remarks, but I wish to explain the scope of the regulations that we are debating today.
First, the regulations relate solely to putting those individuals who are already barred under existing arrangements on the barred lists of the new scheme. In relation to how automatic barring will work with new cases once the new scheme is fully operational, we shall be making the full set of prescribed criteria regulations under the affirmative procedure for separate consideration. Secondly, the regulations will determine only those cases where the individual will not have the right to make representations about their inclusion on the ISA’s new barred lists. These individuals have perpetrated one or more offences that are so serious that it is certain that they cannot provide any additional information that would suggest that they did not pose a risk of harm to children or vulnerable adults. As a result, there is no point in providing the right for them to make representations against their inclusion on the new lists.
In relation to children, the regulations build on those that lead to automatic barring without the right to make representation currently in force for List 99. My right honourable friend the Secretary of State made a Written Statement in the other place on 17 March that provided an update on List 99. I made the Statement available in your Lordships’ House on the same day. During the passage of the Bill in 2006, there was much consideration about which offences should lead to automatic barring. That is why the regulations are subject to the affirmative procedure and are being debated today. Since the passage of the Bill, there has been extensive consultation, and I do not intend to reproduce that here, but it has been available to noble Lords.
I should point out, however, why it is not necessary to include those cases where there is a right to make representations in the regulations we are debating today. That would be redundant because the transitional provisions order gives individuals already barred for committing such offences the right to make representations about their inclusion on the ISA’s new barred lists in any event. If these regulations are approved, we will start putting the most serious offenders on current lists on to the ISA’s new lists in April. That will continue our progress in establishing the new scheme.
There can be nothing more important than protecting children and vulnerable adults from those who pose a serious threat to them. It is the responsibility of all, including the Government, to do everything we can to protect them. It is in that spirit that I commend these regulations to the Committee. I beg to move.
Moved, That the Grand Committee do report to the House that it has considered the Safeguarding Vulnerable Groups Act 2006 (Prescribed Criteria) (Transitional Provisions) Regulations 2008. 13th report from the Joint Committee on Statutory Instruments.—(Lord Adonis.)
I thank the Minister for his explanation of these regulations, which we very much welcome the opportunity to debate. They represent what is so often the case with secondary legislation: a battery of good intentions in need of perfecting.
We on this side of the House expressed at length when this Bill was being debated that we feel strongly that protecting vulnerable children and adults is of paramount importance. Crucially, these vulnerable children and adults are in desperate need of support from all sorts of services, and it is essential that the Government provide that help with well trained and well intentioned professionals and volunteers. I hope the Minister will not mind if I make some general points while we are discussing these issues. He may not be in a position to answer my questions but I hope that he will. I understand that we are talking about transferring from one list to another, but I would like to raise some general points.
If our aim is to protect these vulnerable people, part of the task is to ensure that the wrong people are not working in close proximity with them. The other important part is to ensure that the right people are not being put off; that is, we must be very careful not to contribute to the sense that the Government are suspicious of those with a genuine interest in caring for the vulnerable segment of society. Since the Bill was passed, we have heard anecdotal stories of how difficult it is to get volunteers and how many people are being put off by the hoops they have to jump through. Although this question is not directly involved with the issue, has there been a decline in the number of volunteers since the Act came into effect?
As I say, those are general points but they provide an important framework in which this debate rests. We understand that the migration of those from the older list of those already barred or restricted to the list under the new scheme is an important step to ensuring that the new scheme is implemented efficiently. The need to determine what offences result in an automatic barring is a key step in the construction of the foundation of the new scheme. It is right that it should be clearly defined and presented to Parliament in that manner.
While we appreciate the significance of outlining the criteria, we still feel it is necessary to have further clarity from the Minister on a few key points that are the cause of some concern on this side of the House. The first issue concerns not the list of offences in themselves but the other important part of the criteria for referral; namely, whether or not the person in question was convicted of the offence. The regulations still state that for specific offences a caution as well as a conviction necessitates a referral. These are often serious sexual offences. I fully appreciate that, in legal terms, accepting a caution can be construed as an admission of guilt, but making such a sharp demarcation risks ignoring the circumstances. People often accept cautions without realising their full implications. What conversation has the Minister had with the police with the aim of improving the public’s understanding of the significance of being cautioned? Does he feel that those accepting cautions are aware of the full implications? Does he think there might be circumstances where someone might accept a caution simply to avoid shame or scandal, and thus unwittingly bar themselves from working with vulnerable people?
I understand that this might concern only a very small number of cases, but the point remains that without a proper appreciation of the individual circumstances of those who are cautioned, an outright bar might not be appropriate. What assurances can the Minister give that those referred to be barred because of a caution will be only those who might pose a threat? What mechanism might be in place for that?
The second point that I want to bring to your Lordships’ attention is something that appears to be a new condition. The regulations specify that only offences committed in the past 10 years will result in referral to be barred. Does this include all manner of offences? I think of the more appalling offences such as murder or rape. Under the Rehabilitation of Offenders Act 1974, the only convictions that become spent or ignored after 10 years are those for crimes that carry sentences of up to two-and-a-half years. Under this regulation, it seems that any crime will be ignored for referral purposes, as long as it happened 10 years ago. Is that really the Government’s intention? Could the Minister explain why the regulations diverge from the Rehabilitation of Offenders Act’s specific cap of ignoring only those crimes that carry short sentences? The regulations refer explicitly to when the crime was committed. Does that mean that it allows those who committed a crime more than 10 years ago, but may have only recently been convicted, the chance to work with vulnerable adults?
The few successes of the Home Office’s Operation Advance have resulted in the conviction of serious sex offenders many years after the commission of the crime. Developments in DNA technology will make these sorts of belated convictions even more possible. Would those people still be allowed to work with vulnerable people under the language of the regulations? Of course, conviction of the listed crime might bar an individual, but how does this coincide with the specific mention of the time when the crime was committed and not when the person was convicted?
I have been speaking about a few of the technical points in the regulations that I feel need clarification, but I now turn to an issue that is worrying in its omission from this regulation. It may well be because we are talking only about people being referred from one list to the other, but I am still going to make the points because they are important and they are worrying issues. There is no structure in the Act for how offences committed overseas are to be incorporated into the referral mechanism. Could the Minister explain how they will be incorporated? Surely they are not to be ignored. What resources do we have to depend on? We are not yet linked in to the most important European criminal database, the Schengen information system II. How can we be sure that dangerous offenders will be barred from working with vulnerable groups if we cannot identify those who come from outside this country? The EU Committee report on the Schengen information system II suggests that it is possible for dangerous criminals to enter the country undetected; and that is just those from Europe.
Although we do not exactly have the greatest faith in the Government when it comes to large databases, what is being done to ensure that offenders from countries with which we have not even tried to share a database are not working with vulnerable children? What conversations has the Minister had with the Home Office to address this issue? Does the Minister have plans to include crimes committed abroad on his list of criteria for referral?
Essentially, we welcome the fact that steps are being taken to ensure that vulnerable groups are protected. That is of the utmost importance. But we must be alert to all potential threats from a lack of information about foreign crimes, from unclear language and from the fact that many people who do want to help might be scared away from even trying. Much needs to be done to ensure that vulnerable people are getting the care that they need, with the confidence that they are in the safest possible hands. I look forward to the Minister’s response.
Before speaking to the order, I should say that I have consulted my noble friend Lord Shutt, the Chief Whip of my party, and he has assured me that it is quite in order for me to sit here. I hope that no Members of the Committee will be offended if I observe custom and practice and sit here rather than at the other end.
Thank you. The advantage of speaking second is that one’s concerns have often already been extremely well expressed. That applies in this case, in that I share the concern of the noble Baroness, Lady Morris, about conviction and caution. Members of the Committee will remember that when we went through the Safeguarding Vulnerable Groups Act 2006, it became clear that I do not like barring without a right to representation at all in principle. Even if—to quote the background paper—the offence creates,
“a presumption that the offender poses a risk of harm to children or vulnerable adults”,
it would be a human right for the person being so barred at least to be able to make a statement in his or her own defence. Opening any chinks in our defences for children and vulnerable groups is the last thing I would want to do, but it is a human right that somebody should at least be able to make a statement about the fact that they do not feel that they should be barred.
However, I welcome the fact that we have the affirmative resolution procedure for these regulations, because that gives us a chance to look at the further consultations before they come back to this House so that we can take account of them in further discussion, as we are today. In fact, looking at the consultation, I was interested to see that respondents wanted more offences, rather than fewer, on the list of those which do not attract a right to representation. Far be it from me to encourage the Government to lengthen the list of people who do not have the right to representation, but I am curious as to why they decided not to follow the suggestions in the consultation and leave the list as it is.
My main concern is cautions. I share the concern of the noble Baroness, Lady Morris, that people often do not understand the significance of what is happening to them when they are offered the opportunity of taking a caution rather than going to court. Those people give me most concern when I remember that they have no right of representation. However serious the offence for which they are being cautioned, it has not had the test of the normal level of proof in the criminal courts in this country. They have not gone through those tests, and people who have accepted a caution should therefore have the right of representation and leave it to the independent expert board, in which we all have the greatest confidence, to look at the circumstances of the offence itself, the level of proof and the state of mind of the person concerned when they were persuaded to accept a caution, before they put that person on a barred list.
I also share the concerns of the noble Baroness, Lady Morris, about overseas convictions. I ask the Minister whether that includes overseas cautions as well. Not every country has the same standards for the behaviour of the police as in this country. I would not like to think that people were in any way unreasonably pressured by a foreign police force to accept a caution, thereby removing their right to representation and barring them.
I look forward, as does the noble Baroness, Lady Morris, to the Minister’s response on those issues. However, I will ask about one more related point; I have not given the Minister notice of this, so he may wish to write to me. It is about the implementation of the consolidated safety recruitment guidance, and the follow-up to the Ofsted survey on vetting practice in schools. In a Written Ministerial Statement, the Secretary of State for Children, Schools and Families stated:
“Ofsted inspectors evaluate schools’ compliance with Government requirements regarding vetting of staff during the course of inspections of maintained schools. Reports published since April 2007 indicate that compliance is very high, and Ofsted will continue to report on this aspect”.—[Official Report, Commons, 17/3/08; col. 37WS.]
It is good news that schools’ compliance with the CRB checks, as they are currently called, is very high, and I am delighted to see that. However, I have received evidence from a schools inspector which gives me cause for concern. He says:
“Schools are expected to see positive evidence of identity, birth, address, qualifications … Many seem to believe that they must retain evidence”,
so that they can prove that they have done this to, for example, a CRB monitor or an Ofsted inspector. The result is that this inspector is finding in many schools,
“a growing plethora of personal information: photocopies of drivers’ licences, birth certificates, qualifications and passports. Schools know that they must destroy the actual CRB disclosure, because they have been told that they must”,
and many schools think that they should keep this background evidence. There is a chance that this is quite a widespread practice, although I have to admit that the person who informed me has obviously not inspected thousands of schools. But he is concerned that a lot of this confidential information may be vulnerable, although the majority of schools will do their best to keep that sort of information safe.
What is being done to make sure that schools understand that they do not need to keep that information once the CRB check has gone through, and that they have destroyed the CRB disclosure itself, simply in order to convince the inspectors that they are complying? Perhaps Ofsted or the Information Commissioner would be able to comment on this. I should be most grateful if the Minister would write if he is unable to answer the question. This is my only opportunity to raise this issue. It is not strictly relevant to the regulations, but it is related to it, I hope, closely enough.
I am very grateful to both noble Baronesses for their welcome for the regulations and for their questions. Most of the questions range well outside the remit of the regulations that we are debating today, which have a very limited and precise intent; that is, to define a category of those who are already barred under existing barring arrangements and who will continue to be barred under the new arrangements with no rights to make representations. That may include people who have come by the route of being cautioned, but they are people who, whatever the route, have been barred and have been therefore held by the existing procedures to be a sufficient risk to the client groups with whom they were working to be barred.
The issue is defining that category of people who we do not think it is appropriate to allow to make representations as they migrate from the old system to the new. There are about 14,000 migration cases in total. My information is that only some hundreds of cases will be migrated to the new system without any right to make representations. The overwhelming majority of those who are migrated will have the right to make representations. We are dealing with a very small group who will not.
That very small group includes people who have been barred because of risks that they pose under legislation—which, as the noble Baroness, Lady Walmsley, stated, are, on any reasonable assessment, very serious offences—or where there are concerns about activities relating to extremely serious offences. I could read them out, but I do not think that any of us in the Grand Committee would have any difficulty in thinking that these were appropriate cases. That is the precise area we are talking about. In the great majority of cases there will be the right to make representations.
Having made that general introduction, I shall now seek to deal with individual points that have been raised. The noble Baroness, Lady Morris, asked about the impact of the new arrangements for volunteers. With regard to the establishment of the new barring arrangements, it is not possible to say what impact there has been because they have still to be introduced, so they have not taken effect. However, I see that she is really getting at the time it takes to get CRB checks, which we all know was an issue a few years ago when there were delays in the system and a lack of clarity in some areas about which groups were and were not covered by the need for CRB checks, and there was a concern that this would put people off coming forward.
I am glad to be able to say that the CRB regime has significantly improved its efficiency; the latest data I have show that the CRB processes 90 per cent of enhanced checks within four weeks and its average performance this year exceeds that, so it is improving. In the data I have for 2007-08, the four-week target has been made in 95.2 per cent of cases. The target for customer satisfaction is 85 per cent, and the latest data that we have show that there is 82 per cent customer satisfaction. That needs to improve, but it is still high.
We do not collect figures on the numbers of volunteers coming forward, but the evidence is that the CRB regime is operating well now; it is meeting its efficiency targets and has improved in the past few years. As a matter of anecdote—in many of these areas that is all we have to go on—I visit many schools and voluntary organisations, and no one in recent months has raised with me the difficulty in procuring CRB checks or any lack of clarity about when they should be procured as an obstacle to being able to recruit either full-time staff or volunteers. Having said that for the record in Hansard, I will now be flooded with such instances, which my officials will be glad to deal with. In so far as I can answer the noble Baroness, that is my response at present.
The noble Baroness asked me what, on the face of it, is a serious issue: whether having committed a serious offence more than 10 years ago should be a relevant consideration whether to bar someone. I think she misconstrued the regulation. The point is not whether a serious offence was committed more than 10 years ago. That would continue to be a relevant factor in whether someone should be barred. The issue is whether the individual in question is then allowed to make representations about their case. The regulations we are debating today are for that category of people who are barred who will not be allowed to make representations. Those who committed offences more than 10 years ago will be allowed to make representations. That does not mean that it therefore follows that their barring would be lifted; it is simply one of the criteria used to define that group who will not be allowed to make representations. I hope that answers the point. The noble Baroness is right that serious offences committed more than 10 years ago do not cease to be relevant. The question is simply whether people have the right to make representations.
We debated cautions during the passage of the Bill, and I know they are of concern. It is crucial that individuals understand the significance of accepting cautions. That issue is key. I am informed that ACPO has revised its guidance to ensure that police officers explain the significance of accepting cautions for the offences listed, and that that could—indeed, would—lead to individuals being barred. Realistically, we cannot do more than that to ensure that individuals, at the point of deciding whether to accept a caution, understand the consequences for their potential employment if it is a relevant factor. They do not have to accept a caution—if they wish, they can see the issue proceed through further legal channels—but it is important that they understand, at the point where they accept the caution, that there are consequences. That is now enshrined in the ACPO revised guidance. That is a specific response to concerns that were raised when the Bill was going through both Houses.
Why are there not more offences listed? As the noble Baroness, Lady Walmsley, said, some of those whom we consulted thought that more should be listed. The point to make here is that the ISA will consider all relevant offences. However, we had to be very careful in deciding which offences were put into the category of those for which there is no right to make representations. We sought advice from experts in the safeguarding, offending and legal fields. We looked at how offences were used in current safeguarding schemes and, of course, the list of automatic barring offences has been subject to extensive consultation, most recently the formal public consultation last year. The fact that certain offences are not in this order does not mean that they are not necessarily extremely serious offences which would lead to barring, it simply concerns whether representations can be made if an individual is barred as a result of them.
We debated at length workers from overseas and offences committed overseas when the Bill was going through. The regulations deal with those who are already barred. Future regulations will ensure that where we know an offence has been committed abroad, it will lead to barring. We have very good reciprocal arrangements with many countries for determining whether individuals have committed offences as this forms part of their application and assessment procedures when they apply for jobs which come within those categories for which CRB checks are necessary. I am told that we are making significant progress in enhancing the reciprocal arrangements for the exchange of information. For example, I am told that we are making very good progress with the eight states of Australia on much more robust mechanisms for exchanging information when workers apply for jobs. Australia is, of course, a big market for the recruitment of staff into the sectors with which we are dealing.
We are seeking to strengthen systems to receive foreign offender information from all countries, and this is a big task of the new ISA. But I must be frank with the Committee that this depends on the quality of information held by the domestic authorities. This will be ongoing work which we need to take forward to ensure that we procure the best quality information available and that it is transmitted to us in a timely fashion. But, of course, it is also the responsibility of employers to conduct the most thorough evaluation they can of individuals who apply for jobs, over and above them being cleared through a CRB process or a reciprocal arrangement for exchanging information with overseas. The fact that an individual comes from overseas and we do not have good quality information from their own vetting and barring services does not lessen the obligation on the employer to make all necessary checks and to monitor behaviour very carefully. I hope that I have dealt with the specific questions—
Before the noble Lord sits down, I have a further question. Will offences committed overseas for which somebody has accepted a caution also be included? The Minister may recall I was concerned that overseas police forces may not be as scrupulous as our own.
As regards the current regulations, they will be included only if they have already been barred. So they would be included only if they have already gone through a process that has led to barring. The precise terms on which people will be barred without representation in future will be subject to subsequent regulations.
The noble Baroness also asked me about a point that was raised with her as regards the practice of schools in retaining personal information about teachers and staff after the necessary checks have been made. Schools do not have to keep the documents to which she referred. They must make a record of the checks they have made, but that is all that the inspectors need to see; our guidance is clear on this point. In response to the points that she has made, however, I will look to see whether it can be strengthened. She makes a good point—we do not wish personal documents to be retained unnecessarily and therefore possibly subject to improper use.
On Question, Motion agreed to.
That completes the business before the Grand Committee. The Committee stands adjourned.
The Committee adjourned at 5.24 pm.