National Audit Office report on Government’s management of legal aid

The Ministry of Justice (MoJ) does not know whether everyone eligible for legal aid can access it and government needs to do more to ensure the sustainability of the legal aid market if it is to achieve value for money, according to a new National Audit Office (NAO) report.

The NAO’s report – Government’s management of legal aid – recommends that the MoJ do more to ensure legal aid is available to all those who are eligible. Until it does, it cannot demonstrate that it is meeting its core objectives and securing value for money.

The MoJ has achieved its aim of significantly reducing legal aid spending. But more than a decade on, it still lacks an understanding of the full costs and benefits of its reforms. In real terms, spending on legal aid fell by £728 million (from £2,584 million to £1,856 million, a 28% reduction) between 2012-13 and 2022-23 (in 2022-23 prices) as case volumes fell. MoJ recognises that some aspects of its reforms, such as the removal of early advice in some categories of law, may have caused additional costs to the taxpayer.

However, it has not made progress in understanding the potential scale of these costs. Legal sector stakeholders the NAO consulted provided various examples of where they feel costs have shifted from legal aid funding to elsewhere in the public sector. For example, some local authorities are funding legal advice for immigration cases to mitigate costs to themselves later on.

NAO research found that the proportion of the population within ten kilometres of a legal aid office has fallen since 2013-14 for most areas of law. For example, for housing issues such as eviction the proportion fell from 73% to 64% in the past decade. This followed the MoJ introducing reforms in 2013 to discourage unnecessary litigation and make significant savings. Reducing the scope of legal aid resulted in a smaller number of firms providing legal aid work during this period as the market adjusted to fewer cases being eligible for funding.

While the lack of a local office does not automatically prevent people from accessing support, with some firms able to provide advice remotely, LAA (Legal Aid Agency) and MoJ recognise that there are areas of law where there may be unmet need. These include housing, immigration and advice in police stations.¹

NAO research identified several limitations to the information that LAA collects, which impacts its ability to determine whether there is likely unmet need for legally aided services. This includes increases in the geographical procurement areas which risks masking potential gaps in local provision.²

There is also a lack of data on whether providers' capacity limits access to legal aid. Firms contracted to provide legally aided services are not obliged to take on a minimum volume of work. LAA monitors data on the number of new cases started to capture the volume of work that providers take on. However, it does not routinely collect data on reasons for low or no activity, such as lack of demand or capacity.4 In 2022-23, in all civil law categories except family and mental health, at least one in 10 contracted firms took on no cases.

Stakeholders also told the NAO that providers may 'cherry pick' cases, and only take on cases which are straightforward and therefore require less work for a fixed fee. Therefore, even in areas where providers are active, an eligible individual may not be able to access legally aided services. LAA told the NAO that providers being selective in this way was against the terms of the contract, but it was difficult to monitor whether it was happening.

We found problems with the sustainability of the legal aid markets. For example, in some areas MoJ has been unable to appoint providers for contracts to provide emergency housing advice in specialist courts. Many providers also told us that they plan to reduce or withdraw their legal aid services in the near future and that they face difficulties recruiting staff. In real terms, civil legal aid fees are now approximately half what they were 28 years ago. MoJ has been slow to respond to sustainability risks and lacks the data it needs to do this successfully. Instead, it has relied on one-off large-scale reviews of the sustainability of criminal and civil legal aid.

The proportion of the population eligible for legal aid support has reduced, as the financial eligibility thresholds have not increased in cash terms for more than a decade. The impact of static thresholds, set against wage inflation, mean that by 2020-21 there had been an 11 percentage point decrease in the proportion of UK income taxpayers financially eligible for civil legal aid since 2012-13 and a 16 percentage point decrease in those eligible for support for criminal cases in magistrates' courts. MoJ recently reviewed its financial eligibility criteria for legal aid and committed to update these, which it estimates will make more people eligible for support.

The NAO recommends that the MoJ should work with stakeholders to improve its understanding of the costs and benefits of legal issues removed from scope during legal aid reforms, to ensure that changes have not led to less efficient public spending.

The MoJ should also improve its research on areas of stakeholder concern including the impact of the removal of early advice for issues such as housing and debt. The MoJ and LAA should work with providers and representative bodies to establish a workforce strategy which considers the pipeline of future legal aid lawyers and their training to ensure future supply is sufficient to allow access to justice.

Gareth Davies, the head of the NAO, said:

“The Ministry of Justice has succeeded in its objective of significantly reducing spending on legal aid, which has fallen by more than a quarter in the past decade in real terms. However, it still lacks a complete understanding of the wider costs arising from the reforms and so cannot demonstrate a spending reduction for the public purse overall. Nor does it collect sufficient data to understand whether people entitled to legal aid are able to access it.

“The MoJ must ensure that access to legal aid, a core element of access to justice, is supported by a sustainable and resilient legal aid market, where capacity meets demand. It is concerning that MoJ continues to lack an understanding of whether those eligible for legal aid can access it, particularly given available data, which suggest that access to legal aid may be worsening.”

ENDS

Notes for Editors

1. Furthermore, some advocacy groups report to LAA that individuals they support are unable to secure legally aided services. LAA acknowledges that the number of reported cases is likely to understate any capacity issues since organisations may not report this when it occurs, and providers may not report to LAA when they turn clients away.
2. For example, in 2013-14 there were 101 procurement areas covering England & Wales for community care law, of which 19 were not meeting the minimum threshold, but by 2022-23 there were only 12 procurement areas, all of which met the threshold. LAA acknowledges that these changes risk masking gaps in local provision as the minimum threshold becomes easier to meet.