Our £1bn programme of reform – led jointly by the judiciary and government - is introducing new ways of working and technology commonplace in other walks of life. It’s reshaping the justice system around the needs of all those who use it by simplifying and streamlining access to justice. This, of course, means balancing the needs of many and at times making some difficult decisions, particularly when it comes to court closures.
A recent opinion piece, published online by an independent charity, raises important questions about court closures and access to justice. These themes were also explored by the Justice Select Committee, to which HMCTS and the judiciary provided written and oral evidence. Here, we set out our responses to those questions.
Why have court buildings been sold before changes that are part of the reform programme have been put in place, tested, evaluated and shown to work?
Changes as a result of the reform programme are not the reason for any court closures that have taken place so far. All of them have been because buildings were underused, or weren’t appropriate. For example – in some cases where we had too much capacity in an area, we closed the least-used building; in others, we closed the building that was in the poorest state; we also always looked at travel times and access. We have also in some cases moved a court’s location where we’ve been able to transfer work to another building in the same town or city.
In May 2019 we published our response to the ‘Fit for the future’consultation, which outlines our future approach to reforming the physical estate in the context of the reform programme. As new ways of accessing justice are introduced, we expect the need for physical courtrooms to reduce further. But we will only consider closing a court once we have clear and tangible evidence that reforms have had the impact we anticipate. Decisions will follow the evidence, not the other way around.
How will our courts cope with any future surges in work?
The environment we work in is dynamic. Flexibility – how we can use and adapt our estate for the future – is very important. But for too many years, we’ve been running many buildings with excess capacity – which essentially means we’ve been spending money on bricks and mortar that we could have been spending on other things. Keeping empty courtrooms running is not a good use of public money.
We regularly review expected workloads, to forecast the volume of cases that might come through the courts. We look at a range of scenarios covering demand including ranges of possibilities that look at work increasing or decreasing – what is known as ‘sensitivity analysis’. It helps us to plan the resources we will need – including building space – to manage future workloads, including any unexpected changes in demand. But we cannot and should not hold on to large numbers of extra buildings ‘just in case’.
Have court buildings been sold at an undervalue?
No, buildings have not been sold at an undervalue and often the opposite has been true. The National Audit Office noted in its 2018 report that the estates reform project had generated more income that expected.
Our surplus buildings are sold on the open market, and achieve the best price that buyers are prepared to pay. We take professional advice as part of the disposal process to make sure that we achieve market value, including extensive due diligence to reduce risk and uncertainty.
Since the start of reform, we’ve raised £125 million from the sale of surplus buildings and all of this has been reinvested into modernising the justice system.
Has there been any provision on sale enabling the government to share in any development profit through overage or clawback clauses?
When disposing of surplus property, it’s standard for us to put overage and clawback mechanisms in place.
The overage that we can agree varies from transaction to transaction, and often the precise terms and circumstances in which a payment can be made are detailed and complex, but broadly speaking we seek two forms of overage:
- Turning overage: If the buyer sells the property for a higher figure within a certain period after the sale, we are entitled to a percentage of that uplift.
- Planning clawback: If the buyer obtains a planning permission within a certain period of the sale that increases the land value, we will be entitled to a percentage of the increased land value.
It’s worth noting that none of this means that developers won’t buy land, repurpose it and sell it at a later date for a profit – this is what developers do.
Is the MoJ getting value for money from its management consultants? How do their hourly rates compare with legal aid payments or, indeed, judicial salaries?
Our reform programme is the most ambitious programme of its kind anywhere in the world. We are investing more than £1bn to modernise outdated processes and create a swifter, more accessible and more efficient justice system for the public.
This requires skills that HMCTS has not previously had internally – from digital development to having better data to improve our services. Our largest contract with PwC (£30m over three years) replaced a number of contracts with external suppliers, to allow us to benefit from specialist skills to deliver our reforms and get best value for money for the taxpayer.
Figures reported in our Annual Report 2018-19 provide an accurate account of our expenditure on contractors. Last year this totalled £23.9m, with around £22m of that apportioned to the reform programme. This is less than 1.5% of our total annual budget of £1.6bn.
Why have so few former court buildings been used for affordable housing?
We work very closely with Homes England, giving them the opportunity to acquire sites that are of interest. By the end of December 2018, we had transferred 32 surplus buildings (announced for closure in 2016) to them. Fourteen of these will be used for housing and have the capacity to create 485 new homes. Some of our estate has not been suitable for housing, for example because of listed status or planning restrictions.
Where will the money to fund our justice system come from when all saleable assets have been sold?
Revenue from sales does not and should never subsidise the day-to-day running of the justice system.
Sales from property have been put towards the reform programme – a one-off switch from bricks and mortar into digital and other changes that will make HMCTS more efficient to run – but even here they make up only a small proportion of the costs of reform (around £280m of the total £1.2bn of investment). It is true that disposing of underused or unsuitable buildings also reduces our longer-term running costs; but this is not how we fund the running of the courts – rather, it is one of the things we do to make sure we are spending the running costs we have as well as we can.
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