Judges and magistrates could be made redundant or trials delayed because of pressure to cut £90m from the courts budget, the Ministry of Justice (MoJ) has been warned.
Lord Justice Leveson, the senior presiding judge for England and Wales, has sounded the alarm over a collapse in income from court fees. There will be a shortfall of £27m this financial year, followed by an estimated £46m in 2009-10 and £17m in 2010-11.
The crisis, which has been revealed in two leaked Whitehall documents, has developed partly because of new rules over reimbursing the cost of child protection proceedings. Fees have increased sharply and councils are liable to reimburse courts for the full cost.
As a result, some cash-strapped local authorities have delayed or cancelled taking cases to court. Other cases are taking longer to prepare.
Numbers of cases in Kent have fallen by 80 per cent since the new rules were brought in and by 40 per cent in London. Critics have also warned that the new rules will undermine efforts to protect children against abuse.
Additional problems have arisen because HM Revenue and Customs – one of the biggest users of magistrates' courts – have taken fewer people to court to retrieve unpaid taxes.
A memo from the courts service warns that courts had been asked to reduce costs by 2 per cent, raising the prospect that opening hours will be cut to save money.
It said savings would have to come from "parts of our budget where we have control, such as salary costs, sitting days, building works" and admitted a "redundancy scheme is something we may have to consider for the future".
It added that it could not approach the MoJ or the Treasury for extra cash.
"This is not an option – we have been allocated a set budget and have to work within this. Our expenditure and income has to be balanced," it said. In a letter to judges and magistrates, Lord Justice Leveson alerted them to "the difficult financial situation for the courts this year" and warned that the court service will be forced to "reassess its expenditure mid-year".
He also made it clear that senior judges did not agree with the new policy on fees from child protection cases.
Henry Bellingham, the shadow Justice minister, said: "This government's incompetence has led to a crisis in the justice system. If court sittings are cancelled and trials delayed, the public will be put at risk and justice undermined.
"Ministers ignored warnings from judges, magistrates and local authorities and now they do not have the money to address the shortfall. This is a black hole of their own making."
Lord Hunt, the Justice minister, said last night: "There is no a black hole in Her Majesty's Courts Service budget. There will be no impact from efficiency savings on the service provided to victims and witnesses or to the effective delivery of justice. There is a duty to ensure taxpayers' money is spent efficiently, and Her Majesty's Courts Service is committed to ensuring this happens."
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