My Lords, the Government have committed to making the process of obtaining legal authority to access a child trust fund more straightforward. A working group comprising the Ministry of Justice, the Treasury, HMRC and the Department for Work and Pensions has met several times to consider what more can be done, and it has also met the Investing and Saving Alliance, the Financial Conduct Authority and the Money and Pensions Service. The Court of Protection Rules Committee is reviewing its application forms and considering issues raised by campaigners.
I am grateful to my noble friend, who has only recently inherited this pressing problem. I hope that he can help the thousands of families who cannot access child trust funds without a lengthy and at times intimidating procedure. On 3 December, when I last raised this, my noble friend Lady Scott said that the new working group would
“report back to the Minister in early January.”—[Official Report, 3/12/20; col. 828.]
What progress has been made? Might he promote a simplified and streamlined court procedure to access what are normally fairly small sums of money?
My noble friend is absolutely right that, because these funds are generally of relatively small amounts of money, it is all the more important that court procedures, which are designed to comply with the Mental Capacity Act 2005, are both accessible and proportionate. Rules and procedures are a matter for the courts, not Ministers, but I will do all I properly can to ensure that children and young adults with a learning disability can access what are, after all, their own funds.
My Lords, in December, some finance firms started to allow parents supporting a disabled youngster to access trust funds without a court order in exceptional circumstances. Some 30% of families benefit, but 70% are still required to go to court. Last week, in a meeting with the Investing and Saving Alliance, officials from the Minister’s own department refused to support this—why?
My Lords, it is not for the Government to comment on the development of private sector proposals and the extent to which—and whether—they comply with the relevant legislation. We are working with all the financial trade bodies to ensure that parents and guardians of young people who do not have the required mental capacity to make the decision to access a child trust fund at age 18 are aware of both lasting powers of attorney and the important benefit of making an application to the Court of Protection before they reach 18 to avoid court fees.
Does the Minister not accept that there is an urgency about this? Many families face huge administrative burdens and other pressures when their child reaches adulthood. Child trust funds can play an important part in helping with the transition, but accessing them should not become an additional burden, especially when relatively small sums of money are involved. Will he please commit to ensuring that families will be supported proactively in these circumstances —and do this with some urgency?
My Lords, I can certainly commit to that: I have arranged meetings later this afternoon to that end, and I will take a personal involvement to ensure that all that can be done is done. I will also liaise with the President of the Family Division but I emphasise that, ultimately, court rules are a matter for the court, and there is a constitutional propriety that I have to maintain.
I ask my noble friend about capacity. Under the Mental Capacity Act, this is not a generalised presumption; it is specific to the issue at hand. Who exactly determines whether the individual has capacity? If a professional assessment of capacity is needed, who exactly is expected to pay? It can cost several hundred pounds.
My Lords, there are a number of ways in which the requisite capacity, or lack thereof, can be established and assessed by the court, and those issues probably take me outside the bounds of an answer here. I will write to the noble Baroness to give more detail.
My Lords, last time this was discussed, I said that the Minister had pointed out an absurdity. He has still got his finger on it. Can he give the House an assurance that we will not only get a solution but will hear about when that is reached, and that banks and their internal bureaucracy are informed about this so it can be done quickly?
My Lords, the present situation is absolutely unfortunate. One of the problems is that this does not seem to have been anticipated by the Government which put child trust funds into existence. We are doing all we can, and I will certainly report back to your Lordships’ House on the progress we make. As I have already said, I am personally committed to ensuring that this problem is solved.
My Lords, will my noble friend assure the House that any measures taken to help children with disabilities access their own money in their child trust funds will also read across to junior ISAs, where I believe similar problems can arise? The Government may have special responsibility here, after the 2005 Government offered parents extra payments to invest in a child trust fund if they were also claiming disability living allowance.
My Lords, at the moment I do not see any conceptual distinction between child trust funds and junior ISAs. What we put in place to solve this problem ought, in principle, to be applicable to junior ISAs as well.
My Lords, those who look after children with learning disabilities deserve our help and admiration. They do not need unnecessary obstacles being put in their way. Is there any evidence that those trying to access the funds being discussed have anything but the best of motives?
The noble Baroness is certainly right. Virtually everybody does have the best of motives, but there have been cases where the protections afforded by the Mental Capacity Act 2005 have, unfortunately, been needed. One has to remember that, ultimately, one is dealing with the funds of somebody who lacks the capacity to deal with them themselves. That is why the Mental Capacity Act puts in protections which may well be needed.
A professional actuary has been helping campaigners to identify the aggregate amount of money that disabled young people could lose from their child trust fund as a result of the current court process. The results estimate that, if one in four parents give up pursuing these funds because of the perceived difficulty in accessing the money, £107 million could be lost to those children over the next 10 years. This money is being locked away forever in individual accounts. What assurance can the Minister give that any new solution will be designed to make it as easy as possible for these families to access the benefits for young people?