A deeply depressing report on legal aid is published today by the House of Commons Committee of Public Accounts.
It notes that the Legal Services Commission spends £2.1 billion a year on buying civil and criminal legal aid, mainly from solicitors and barristers, and a further £125 million on administration. Although the commission has successfully stopped the increase in legal aid spending in the last five years, the MPs found it was an organisation with poor financial management and internal controls and deficient management information.
These weaknesses resulted in the commission having its annual accounts qualified for 2008-09 and an assessment that its procurement and administration of criminal legal aid posed risks to value for money.
The public accounts committee summarises its findings thus:
1. There is a lack of clarity in the respective roles of the Ministry of Justice and the Legal Services Commission, leading to uncertainty and duplication.
2. The commission has failed to get a grip of its financial management and weak internal controls led to its accounts being qualified in 2008-09 because of an estimated £25 million of overpayments to solicitors.
3. The commission was unable to account for the significant variation in profits from criminal legal aid work reported by solicitors.
4. The committee is concerned that the increasing use of solicitors to conduct work in the Crown Court is threatening the long term future of the junior criminal bar and may be affecting the quality of advocacy being provided in the Crown Court.
5. Everybody is entitled to free legal aid if they are held by the police, but only about half of people take this up.
6. Although the Ministry of Justice and the commission launched a separate system for paying for the most expensive Crown Court cases in 2001, eight years later they still do not know whether this system gives value for money.
7. While the committee accepts that specialist skills need to be properly remunerated we were concerned to find that some barristers, notably Queen’s Counsel, can earn up to £1 million a year from publicly funded criminal legal aid cases.
8. The commission has struggled to recruit and retain the right skills on its senior team where the high turnover of staff has been disruptive and expensive.
9. The commission lacks a clear strategic direction, reflected in its poor management of the changes to legal aid detailed by Lord Carter.
Edward Leigh MP, Chairman of the Committee of Public Accounts, said:
The Legal Services Commission has been doing a far from competent job of buying legal aid from lawyers. It spends large amounts of money – more than £2 billion in 2008/09 – but its financial controls and management information have been lax. It is indicative of this poor oversight of spending that the commission managed to overpay solicitors in 2008/09 by some £25 million, resulting in the qualification of its accounts.
The commission’s plans, recently abandoned, to introduce price competition in the legal services market were hamstrung by its lack of knowledge of that market. It must now gather much better information on the costs and profits of firms providing legal aid. Without this basic information, the commission will not be able to set prices which are good value for money for the taxpayer and, at the same time, make legal services work attractive enough to firms.
The commission’s lack of grip of the basics and lack of a clear strategic direction were compounded by a muddled relationship with its sponsoring department, the Ministry of Justice. Both commission and department must now adopt a more coherent approach to introducing reforms to the legal services market.
Commenting on the report, the chairman of the Bar, Nicholas Green QC, said:
What the committee has found is what we have long feared. The reform of legal aid is in a chaotic state and is being conducted in a way which threatens the junior Bar, who are the lifeblood of the profession.
It is galling, to say the least, for the Bar to witness such very damaging financial mismanagement, resulting even in the LSC’s 2008/09 accounts being qualified by the Comptroller and Auditor General, at a time when brutal cuts in legal aid will threaten the quality of representation in the courts, as the committee warns.
Paul Mendelle QC, Chairman of the Criminal Bar Association, added:
After years of training, young barristers enter the profession burdened by debts running into tens, often scores, of thousands of pounds. They work extremely long hours and earn modest incomes, out of which they have to pay all their own expenses, for many years. Cuts like these will hurt the junior bar most and will force many to give up publicly funded work.
Without a thriving junior Bar, there will be no barristers in the future, and the role of the self-employed advocate, which is fundamental to the proper working of the criminal justice system, will be lost.
At a time when public concern over the need properly and fairly to try crimes is as high as ever, to undermine the justice system through policy mismanagement and unreasonable cuts is reckless and irresponsible.
The profession’s efforts to maintain its diversity are being undermined by a legal aid system which seems to be in a perpetual state of near-crisis. The public accounts committee’s report shows that this cannot go on any longer without causing lasting damage to the criminal justice system.