Public Accounts Committee - Ninth Report

The procurement of legal aid in England and Wales by the Legal Services Commission

This report covers the Committee's examination of the procurement and administration of legal aid in England and Wales on the basis of two reports by the Comptroller and Auditor General: his report on the qualification of the accounts of the Legal Services Commission for 2008-09

We took evidence from witnesses from the Ministry of Justice (the Department) and the Legal Services Commission on the Commission's financial management and governance, on how criminal legal aid is delivered, and on the Commission's skills and capacity to manage change.

The Legal Services Commission—a Non-Departmental Public Body of the Ministry of Justice—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.

The Commission has successfully arrested the increase in legal aid spending in the last five years, but we found it is 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 Committee was very concerned that such weaknesses in the Commission's performance had occurred when the Ministry of Justice spends over £2 million a year itself on legal aid policy matters and on overseeing the Commission. We found confusion and uncertainty about the respective roles of the two organisations which had led to duplication of effort on some issues and a lack of clarity about who should be responsible for others.

Because the Commission is the sole buyer of legal aid, it is important that it knows it is paying the right price for this and the effects its policies are having on the sustainability of providers. But it does not know enough about the costs and profitability of firms to know if it has set its fees at an appropriate level. Moreover, there are gaps in the arrangements to assure the quality of criminal legal aid procured which make it harder to assess whether the services delivered represent good value for money.

The Commission considered the introduction of tendering would remove the imperative for it to know the market, because prices would be set by competition. The recently announced abandonment of its plans to introduce its tendering proposals following representations from the legal profession leaves the Commission not able to assess if it is paying a reasonable price for legal aid.

In particular, significant expenditure is incurred on the largest cases that take place primarily in the Crown Court and a small number of barristers are earning substantial fees from such cases. Despite playing a more active role in managing these cases, the Commission has not done the analysis to determine if its current approach is cost effective.

The Commission has been responsible for implementing significant reforms to legal aid, which were recommended by Lord Carter of Coles in 2006. However, constant changes in staff at senior level—which have been costly and disruptive—and poor planning of the changes has meant that reforms have often been delayed, have not always kept to their timetable and have not been properly evaluated to assess their impact.


see full report at:

http://www.publications.parliament.uk/pa/cm200910/cmselect/cmpubacc/322/32202.htm