The minister with responsibility for legal aid, Jonathan Djanogly MP, has made a statement (reproduced below) on the Immigration Advisory Service going into administration. Once again, the emphasis is on transfer of files to new providers rather than on any attempt to salvage parts of the organisation. It looks like a slender hope, but it might be conceivable that those ‘new’ providers could be new entities created out of the ashes of IAS.
It does seem that a recent audit by the Legal Services Commission went very badly for the organisation, or at least some offices within it. The LSC is said to be seeking to recoup several millions of pounds of over or misclaimed work. Ministers and the LSC can be expected to assert there is nothing wrong with the legal aid system, despite the closure of RMJ a year ago and Ken Clarke recently announcing that there would be a £20 million fund created to keep law centres going because the Government now accepts that they cannot possibly survive in the new climate. If the information fed to Djanogly is true, though, that must be a LOT of files where no evidence of means was retained or something else rather basic went wrong.
It does not sound as if IAS was actually insolvent, it sounds more like the trustees threw up their hands in despair when the contract compliance issues came to light in the audit. Being a trustee is a thankless task, but to close an organisation responsible for thousands of ongoing legal cases on behalf of highly vulnerable individuals in such an dramatic fashion with no prior plans for reallocation of files looks from the outside like a pretty questionable decision.
12 July 2011 : Column 18WS
Immigration Advisory Service
The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly): It is with regret that the trustees of the Immigration Advisory Service (IAS) decided that the organisation had to enter into administration on Friday 8 July 2011.
This is clearly a sad situation for all involved. The Legal Services Commission (LSC) has worked closely with IAS over the last few years and IAS has received substantial support to help them manage their cash flow and run its business within the LSC’s contracted payment system. When LSC took over responsibility in 2004 for funding IAS, the LSC agreed to more favourable transitional arrangements with IAS than were agreed with other not-for-profit organisations.
However, a recent contract compliance audit by the Legal Services Commission, has provisionally identified that a material proportion (amounting to several millions of pounds) of the £15 million paid annually to IAS is over or misclaimed work. This is often where the work carried out does not have appropriate documentation to prove its validity, most commonly where there is a lack of evidence confirming clients’ eligibility. As well as this, work was conducted which was not within the scope of public funding. The LSC, as a responsible public body, is rightly seeking to recoup this money. It is of course crucial that the Government achieve value for public money and the LSC must be able to demonstrate to the Comptroller and Auditor General that it is in control of the funds it administers and takes appropriate action where the terms of its contracts are not complied with.
There have been extensive efforts on the parts of both IAS and the LSC to negotiate a solution to the current financial position, but the scale of the debt, coupled with projected income levels, has led the trustees to conclude that placing the organisation in administration is a necessary step. The current position reflects the company’s past financial management and claims irregularities and is not a direct consequence of the proposed legal aid reforms, not least because these reforms have yet to be implemented.
The primary concern for the Government and the LSC is now to ensure clients of IAS continue to get the help they need. The LSC expects that the administration of IAS will allow a managed close down process of IAS’s activities and an orderly transfer of clients to new providers. Provisional arrangements have been made to ensure that any emergency cases are dealt with speedily, meanwhile the LSC is identifying alternative advice provision in the areas affected and arrangements for case transfer will follow as soon as possible.
There is a significant long-term interest in this work from other providers, both not for profit organisations and private solicitor firms. The LSC ran a tender round for new immigration and asylum contracts in October last year and there was an increase in the number of offices that applied to do the work and bids for more than double the amount of cases that were available. All immigration and asylum providers are expected to meet the same high-quality standards which include compulsory accreditation schemes for all advisers and supervisors, and as such I believe the interests of the clients being transferred will be protected.