To ask His Majesty’s Government when they will respond to the findings of their consultation on the Mental Capacity Act 2005: Small Payments Scheme, which closed on 12 January 2022.
My Lords, the Government published their response to the small payments consultation on 28 February, and a copy of the response is in the Library. The Government consider that it is better to improve the processes of the Court of Protection than to legislate for a separate small payments scheme for adults lacking mental capacity.
I am grateful for that reply. It is a happy coincidence that, after waiting 13 months for a response, one appeared 24 hours before this Question was reached. I very much regret that the Government are not proceeding with the small payments scheme. We now have the absurd position that a parent of an 18 year-old with a learning disability can receive tens of thousands of pounds, rightly, from the Department for Work and Pensions after a home visit to make sure that the money is being correctly applied, but the same parent of that same child cannot access the child trust fund—in which the average sum involved is £2,400—without going through a lengthy, bureaucratic and at times expensive process involving the Court of Protection, which deters many parents from going through it. If the Department for Work and Pensions is satisfied that the parent can act as an appointee, looking after tens of thousands of pounds of taxpayers’ money, why cannot the MoJ agree to a similar process, enabling that parent to access the child trust funds that have been provided by the family itself?
My Lords, I recognise that there is a problem in this area, and I am grateful to the noble Lord for raising it. On his specific point about the DWP payments, the Government see an important distinction between public money being paid for the living expenses of a dependent adult lacking mental capacity on the one hand, and the way we deal with the private property and capital of an adult lacking mental capacity on the other hand. In relation to the latter point, the Government are extremely reluctant to undermine the general principle of the 2005 Act that anyone wishing to take decisions on behalf of an adult lacking mental capacity must be authorised by the Court of Protection.
My Lords, first, I pay tribute to the noble Lord, Lord Young, for his tenacity on this issue. Does the Minister agree with me that, while the vast majority of parents and carers will act in the best interests of their loved ones, proper processes still need to be in place to protect the assets of vulnerable people? The Government have said, and the Minister repeated just now, that they intend to improve the processes of going through the Court of Protection—specifically, improving processing times and simplifying court forms. Can the Minister say what progress has been made in this regard?
My Lords, yes; I am able to fully agree with the noble Lord, Lord Ponsonby. We identified two problems. The first was the clunky—if I may use that expression—procedures of the Court of Protection, and the second was a general lack of awareness of the general law under the 2005 Act. On the first, the Court of Protection has in the meantime been digitalised. As from this month, anyone can apply online for the relevant authorisation, known as a “deputyship”. The relevant pilot reduced waiting times from 24 weeks to eight weeks, and the court forms are being worked on at the moment with a view to making them simpler and more user-friendly. So, there is good progress at the level of the Court of Protection. On the second problem, the general awareness of the need to observe the 2005 Act, we are in the process of a cross-government consultation to improve and raise public awareness.
My Lords, some child trust providers such as OneFamily and Foresters Financial have developed a simplified process, working with families and using the DWP appointee scheme as a proxy to protect against fraud or abuse. In the recent MoJ consultation on this issue, 87% of respondents liked this way of working. Why have the Government rejected it?
My Lords, essentially, there was general support for the idea of some sort of scheme, or at least some simplification of the process, but no consensus on what safeguards we should have. In particular, most banks and financial services companies expressed concerns about what they would have to do to carry out the relevant checks. There would be quite a small demand and it would be quite expensive for most institutions to provide the relevant service. In those circumstances, the Government decided that this was a case where we should avoid legislation and work to improve the present system.
My Lords, do His Majesty’s Government know how many of the 6 million child trust fund holders lack capacity? If this is not known, how can fund providers be sure that it is right to release funds to third parties? I ask this question because there is concern that some fund providers are not as diligent as they ought to be in this regard.
My Lords, I cannot comment on how fund providers operate their relevant systems. The number of adults holding child trust funds who have become adults and lack capacity is quite small—it is thought to be around 1% to 2% percent—but it is none the less significant and the risk of abuse is quite prominent.
My Lords, I have recently been alongside someone who had tried to become an appointee. Can my noble friend the Minister please talk to the DWP about its system to become an appointee for somebody, because it is not simple? Is there not then a case for basically not duplicating the processes? Once you get through the appointee hoops, which are considerable, should you not automatically get a deputyship—so you just have to do it once?
My Lords, the Government are extremely reluctant at the moment to confuse two things. One is the processes by which the DWP works, and the other is the legal process by which an adult lacking capacity can have somebody else act on their behalf. That is a job for the Court of Protection. It is not just a question of child trust funds, although that is an important issue. This can go on throughout a child’s life, and it is quite likely that a child lacking capacity who reaches the age of 18 will continue to lack capacity for many years to come, and there will be important decisions to take. That really should be supervised by the Court of Protection and not by the DWP.
My Lords, it has been a privilege to work with the noble Lord, Lord Young of Cookham, on this important issue. When I led on the implementation of the child trust fund prior to the 2005 Act, we never foresaw that this situation would arise. Is it not a scandal that the cost to the financial institutions should take priority over the cost to these young people, who cannot access their funds? We understand about the Mental Capacity Act and understand the dangers and the safeguards necessary. But, after what has happened with the magistrates’ courts over the issue of pre-payment meters, can anybody really believe that the court system should take precedence over personal support to parents and young people?
My Lords, it is not simply a question of cost to financial institutions. There is a whole range of problems here and an essential tension between protection against abuse and simplicity of process. In this area, where it is possible to have very different views, the Government feel that the principle established in the 2005 Act, placing responsibility with the Court of Protection, is right.
My Lords, when the noble Lord, Lord Young of Cookham, raised this, I said that he had put his finger on an absurdity, and it is quite clear that I was right on that one at least. Can the Government give us some undertaking of what they are doing to make sure that, when parents put money into funds for their children’s future, they are told all the things they have to do to make sure the child can access it properly? Saying that there should be greater awareness will not help; you need one place to go that says, “This is the legal process”.