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The National Audit Office has today reported to Parliament that there are risks to value for money from the way the Legal Services Commission (the LSC) administers and procures legal aid for criminal cases. In 2008-09, the Commission spent more than £1.1 billion on criminal legal aid – legal assistance for people suspected of or charged with a criminal offence.

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A study by the NAO has discovered that the LSC should do more to understand the market for criminal legal aid to make the most of its ability to control price and quality. In particular, while the Commission holds good information locally about its suppliers it does not bring this information together centrally. Better use of this information would help the LSC to establish whether it is paying a fair price for criminal legal aid and forecast the impact of changes it makes.

The LSC is undergoing a major transformation to reduce administrative costs and to improve effectiveness. The LSC has implemented some significant market reforms in the last few years, but it has not always piloted reforms or evaluated their impact, nor has it confirmed the financial savings generated.

The NAO also found that the Commission is not always making accurate payments to solicitors for criminal legal aid. In October this year, the NAO qualified the LSC’s accounts for the legal aid fund for 2008-09 because it had overpaid solicitors on criminal and civil legal aid cases by an estimated £25 million.

An NAO survey of solicitors has also revealed tensions in the relationship between the profession and the LSC. Of those who responded to the survey, 36 per cent of solicitors perceived the LSC as ‘unhelpful’ and 29 per cent believed the LSC did not fully understand the legal system, although firms were more positive about the knowledge of the Commission’s local relationship managers.

The LSC is a Non-Departmental Public Body of the Ministry of Justice. The Ministry employs 34 staff on legal aid policy work at a cost of £2 million. This is in addition to the LSC’s own administration budget of £125 million. The NAO has called on the Ministry to clarify the respective roles and to review the level of staff involved in making legal aid policy in both organisations with a view to reducing this number.

"Last year the Legal Services Commission spent over £1 billion on criminal legal aid. With such a considerable sum of money involved, it is very important that the Commission understands the market from which it is buying and the cost effectiveness of its own practices, but at present, that is not the case. It needs to address this as a priority to make sure that it is paying a fair price for legal aid services that both sustains a competitive supplier base and provides value for money."

Amyas Morse, head of the National Audit Office


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