The Lord Chancellor, Chris Grayling, tries to justify the latest round of proposed legal aid cuts by arguing that expenditure under the last government 'spiralled out of control'  (see the introduction to Transforming legal aid: delivering a credible and efficient system, Ministry of Justice, 9 April 2013). This assertion does not stand up to scrutiny as LAG’s research shows that legal aid expenditure has been largely contained for the past eight years.

 

Measures introduced by the last government, such as the introduction of fixed fees, the reintroduction of means-testing in the magistrates’ court and a cut of 13.5 per cent to fees in Crown Court cases, announced just days before the last general election in May 2010, kept expenditure on legal aid within the budget set by the Treasury. While LAG and other interest groups criticised most of these changes, they did mean that in the five-year period to April 2009 legal aid expenditure fell in real terms by 12 per cent (see Review of legal aid delivery and governance, Ministry of Justice, 2010, p7). In the financial year ending in March 2010 (Labour’s last full year in office) a provision of £108,449 for accumulated bad debt was added to the Legal Services Commission's accounts and there was some growth in civil legal aid expenditure, the reasons for which are discussed below. These costs took expenditure slightly above the Treasury target.

 

Over recent years expenditure on criminal legal aid in the police and magistrates' court has been reducing, through a combination of government measures to control costs and, most significantly, by police use of summary justice. LAG believes that the police have been incentivised not to pursue convictions for many offences and this has had a knock-on impact to expenditure levels in the criminal justice system below the level of the Crown Court. LAG warns that any change in government policy, for example by deciding to measure the impact of policing by convictions rather than arrests, would work through to greater financial pressures on the criminal justice system, including criminal defence.

 

As in criminal legal aid the factors which can trigger an increase in cases are largely outside the control of the civil legal aid system. In the final two years of the last government, expenditure on civil legal aid increased slightly, partly in response to growing demand caused by the slowdown in the economy, but also due to the impact of the Baby Peter case which led to local authorities increasing the use of care proceedings, with resulting increased costs to the civil legal aid budget. In the past governments have responded to increasing demand in civil legal aid by removing matters from scope (ie, the cases which legal aid pays for) and decreasing eligibility (the level of income people need to qualify for legal aid). Eligibility for civil legal aid though has remained around the means-tested benefit level since the mid 1980s and there has been a fundamental reshaping of scope under the Legal Aid, Sentencing and Punishment of Offenders Act 2012. This means that there remains little potential for further large reductions in the legal aid budget through scope and eligibility changes.

 

We are not so much in a situation of spiralling costs, but of spiralling unrealistic expectations from the Lord Chancellor about what further cuts the system can stand. The lack of other options to save anywhere near the £220m he is currently seeking has led Chris Grayling to look at further squeezing the fees paid to lawyers. The problem is that successive governments  have run the system along austerity lines for years and we are fast reaching the point at which costs cannot be cut much more without seriously damaging the quality of services provided to the public.