Scottish Government

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EFFICIENT GOVERNMENT FUND

Stage 1 application - expression of interest

Part 1: Summary Table

Part 2: Narrative bid

Purpose

1. The Executive's Summary Justice Reform proposals "Smarter Justice, Safer Communities" made it clear that Ministers believe that the courts and the public must have confidence in the fine as a sentence. This proposal will produce a package of measures that are firm but fair by:

• Getting the penalty right at imposition
• Increasing the range of available payment methods
• Extending the range of enforcement actions
• Allowing court orders to be enforced administratively; and
• Providing help and support to those who are genuinely struggling.

Background

2. The Fine is a widely used penalty that can be very effective if it is properly enforced. In Sheriff Courts, fines account for 63% of all court disposals. Within the summary criminal justice system it is important to maintain the fine as a credible and enforceable penalty as it is:

• Flexible and capable of being tailored to the seriousness of the offender / offence
• Relatively cheap to administer (although with significant scope for greater efficiency)
• Not disruptive to the work or family life of the offender

3. Collection levels have been improving over the years and currently stand at around 80% of the value of fines imposed in any given year, leaving some £2m which is either discharged by way of an alternative disposal (such as imprisonment), written off or remains outstanding. Clearly there is scope to make further headway in increasing collection.

Current Enforcement

4. However, what these figures mask is the significant level of Court, Judicial, Police and Legal Aid resources that go into operating a relatively mechanistic enforcement regime. Of all fines imposed in sheriff courts over 60% require significant and costly intervention, over at times a lengthy period, before the fine is fully paid.

5. At present on imposing a fine the Sheriff has little in the way of means information (information about the level of disposable income available to the offender) other than a brief discussion with the offender in court to set the fine level and payment terms. The offender then has the limited option of paying the fine by cash or cheque at the sheriff court or by debit card over the 'phone. Often the offender will be given time to pay and/or ordered to pay the fine by set instalments.

6. Each month SCS fines staff carry out a trawl of fines arrears and issue warning letters. The number of warning letters per individual can vary from court to court, but a range of 1 - 10 is possible. Only around 40% of those fined pay fully without the need for a warning letter.

7. Where warning letters do not result in payment, offenders are cited by recorded delivery letter to attend a fines enquiry courts. In the Sheriff Courts around 41,000 offenders are cited to attend fines enquiry courts each year. Failure to attend can be as high as 70%. Of those attending fines enquiry courts 10 % may pay their fine or the outstanding element - however the likeliest outcome of their hearing is that they will be given further time to pay, possibly with changed levels of instalment. Offenders are likely to be cited to attend 1-4 fines enquiry courts. Police warrants are issued in up to 50% of cases where offenders do not attend a fines enquiry court. This equates to around 12,000 warrants annually, which need to be enforced by the police. Of the persistent defaulters approx 10% are subsequently imprisoned. Appearance at a fines enquiry court may be supported with legal aid representation, as imprisonment can be an outcome of continued default.

8. This paints a picture of a system that is complex, rigid and resource intensive. The focus is on processes rather than supporting the offender. Before any decision can be made to alter the terms of enforcement the case has to go before a judge. If the offender does not turn up a warrant will be issued - but the police do not regard these as high priority. The process is expensive. It also has the effect of creating the opportunity to delay or avoid paying fines for those who choose to play the system. Equally it does not offer robust sanctions at an early stage for those who could pay, or support those who genuinely struggle to pay.

Transforming Recovery and Enforcement

9. In considering improvement to the current system a cross agency team consisting of Scottish Courts, SE Justice Dept and Crown Office, with support from Scottish Legal Aid Board and Police, was formed to research the current enforcement procedure and provide proposals for a system redesign that would:

• improve where possible collection rates, with the focus on maximising collection as opposed to routine enforcement
• create more effective recovery processes for fines and penalties (including non-court imposed fines and penalties)
• minimise police and court intervention in collection and enforcement (once the sentence has been set it can be argued that there is often no need for judicial oversight of payment)
• contribute to the effectiveness of the fine as a sentence

10. In achieving these outcomes a key element will be the creation of new Fines Advisors who will have clear accountability for fines recovery and enforcement. The Fines Advisors will proactively support those who want to pay or are struggling to pay, but will be supported by statutory powers to implement a range of enforcement actions for those that won't pay. The aim is to build a relationship between the fines advisor and the offender where this is needed to facilitate recovery and enforcement. Essentially offenders will be able to "opt in" to fines payment, in which case a range of supporting measures will be put in place. If they do not do this, swift enforcement sanctions can be implemented by the Fines Advisor, with the ultimate sanction of returning the offender to court for consideration of imprisonment (but only as a last resort). The cross agency team is developing the following proposals:

• Getting the penalty right at imposition

At the time of imposing a fine there are two feasible alternatives. Firstly the Sheriff could have access to improved means information on the offender enabling the fine level and payment terms to be set at a realistic level. Or secondly, the Sheriff could impose a fine, payable within 14 days, directing those with difficulty to the Fines Advisor. The Fines Advisor would seek means information from the offender and have the power to amend the payment terms appropriately.

• Increasing payment methods

In recognising the current limited payment routes, we will explore options for wider payment outlets, including an electronic swipe card for payment at banks, building societies, or local authority offices; voluntary deduction from benefit; and voluntary arrestment of wages.

• Extending the range of enforcement actions

The information currently provided to offenders is limited and is only backed up by warning letters. It is our intention to issue fines statements to offenders on a regular basis (on a similar basis to access / visa bills) highlighting the fine outstanding, payments made, arrears and next payment date, along with a range of information on new payment options, contact details for their fines advisor and new enforcement sanctions that will take effect if defaulters continue their non-payment.

• Allowing court orders to be enforced administratively

Legislative changes are currently being drafted to create the necessary statutory powers for the proposed Fines Advisors. With these powers the Fines Advisor will be able to amend payment terms, provide access to debt / financial councillors, and automatically implement sanctions such as arrestment of earnings, deduction from benefits or credit blacklisting. Where these fail the Fines Advisor can return the offender to court where imprisonment could be imposed.

• Providing help and support to those who are genuinely struggling

A key part of the Fines Advisor role will be building a relationship with those offenders who need help and / or are struggling to pay. Access to counselling services and payment term restructuring can be considered. The Fines Advisor can also make receommendation to the Court on Alternative penalties such as a community order or form of "fine on time".

Costs / Benefits

11. Implementing the changes will have a cost impact. Transitional and recurring resource costs are currently being assessed, but early estimates indicate that transitional costs, mainly for IT and training, could be around £500K with recurring costs in the region of £800K. A breakdown of these costs is set out below.

12. The bulk of the transitional costs will arise from IT development. The SCS criminal case management IT system, Criminal Operating Procedures (COP), is currently being redeveloped and is scheduled for phased implementation between February 2006 and November 2006. The additional system redesign to facilitate the introduction of the new fines system will be based on tried and tested technology and will lean heavily on the evaluation of the pilot schemes for fines enforcement in England and Wales, resulting from the English Courts Act 2003. The existing contract for the redesigned COP system can be extended to include the new fines element, reducing the risk to the fines enforcement project by maintaining continuity of IT expertise. Based on existing contracted costs it is estimated that IT development costs will amount to £350K. In terms of setting up new methods of electronic payments and the option of swipe cards a further £50K has been budgeted. Recruitment and training of Fines Advisors is estimated at £100K.

13. Recurring costs are largely associated with staff costs. 20 additional Fines Advisor posts will be required, which at an overhead rate will account for some £600K per year. The skill set for these posts is new to the SCS and while we anticipate that while some existing staff may re-train, it is likely that a number will be recruited externally. The other major recurring costs will be associated with IT maintenance, fees for new payment methods and system running costs to cover areas such as printing and postage.

14. However potential savings are likely to be substantial. There is a great deal of work required to complete a full assessment but some early work has been done around the cost of fines enquiry courts. The current annual cost of these courts is as follows:

15. While the aim is to remove fines enquiry courts, it is accepted that there will remain a small percentage of cases that will still require court intervention. Even on the conservative view that court intervention is reduced by only 60% the annual saving would equate to £2.6m. As the proposals and the full assessment develop the full costs and savings will become clearer. It is however anticipated that the savings will increase.

16. All savings are currently based on volumes within Sheriff Courts. The proposed unification of courts that will take place as part of the Summary Justice Reform Programme will see the administration of District Courts, currently run by local authorities, becoming the responsibility of the SCS from 1 April 2007 on a phased basis. These deal with less serious cases than the Sheriff courts, and frequently use fines as a disposal. As court unification is phased in district court fines will become part of the modernised fines recovery and enforcement process. That in turn will release further savings.

17. Additionally, an assessment will be made of potential increased fine collection levels. Approximately £2m per year is uncollected in the sheriff courts at present - while some of that will never be collectable (e.g. in cases where a fine was simply the wrong disposal in the first place) there is potential to reduce the proportion of uncollected fines. There is also potential to reduce the number of offenders who are ultimately imprisoned for fine default. Anecdotal evidence suggests that these short periods of imprisonment are of little benefit to the offender and significant cost to the system in terms of court involvement and prison receptions.

18. The following table illustrates the costs and projected benefits up to 2008/09, although benefits will continue to accrue in years beyond. It should be noted that this is based purely on benefits arising from the reduction in fines enquiry courts - the wider benefits identified at the bottom of the table will be explored during stage 2 development. Whilst the SCS and police savings are expressed in cash terms in the table below it should be stressed that this is a representation of time releasing savings within the services.

Public Confidence

19. While impossible to cost, the change in culture of fines recovery and enforcement will be a major benefit. Presently both the general public and offenders feel that the enforcement system lacks credibility, which in turn impacts on confidence in the justice system as a whole. The level of outstanding fine income is often cited as a criticism of the justice system (although it is a relatively small fraction of the total level of fines imposed and includes a number of open accounts that will eventually be collected). The new approach will transform the way the whole process is managed, ensuring that fines are viewed as an effective penalty. There will be a clear signal that non-payment will not be tolerated, which should lead to more initial compliance and lower process costs per case as a result.

Stage 2

20. So far the broad policy of how the new recovery and enforcement system will look has been developed. The detailed development of revised processes, IT systems, job roles, analysis of the impact on the district courts, full cost benefit analysis, pilots, training and an implementation plan will be taken forward during the time frame of stage 2.

21. This will require the creation of a dedicated cross agency team with consultant and IT analyst support. The cost of this team could be in the region of £200K and financial support from the EGF would enable the team to be created supporting the development of the stage 2 bid.

Timescales

22. The following table identifies the key elements of the likely programme timescales:

Partner Contacts

23. I hope that this information is sufficient to enable your consideration for suitability of efficient government funding. I am of course happy to discuss any aspect of this bid and provide any further information as required.

Eric McQueen

Scottish Court Service
28 July 2005