2.3As legal aid expanded in the 1960s and 1970s, both in scope and budget, specialist legal aid firms, and legal aid departments in larger firms, came into being. At the same time, the Law Centres movement was growing and other agencies and voluntary sector groups expanded the provision of advice services.

2.4By the early 1990s, government policy was changing. Legal aid had moved from being administered by the Law Society to a specialist quasi-governmental body, the Legal Aid Board (LAB). Alongside that, the not-for-profit sector was becoming more significant and taking up a larger share of the overall budget. The LAB wanted to encourage the move to specialisation and introduced a franchise system. The purpose of franchising was to develop a network of specialists accredited as being experts in their type of law, and to ensure that public money was only spent on those who were providing a service of sufficient quality.

2.5However, the LAB did not have the tools to measure legal quality or competency. It did develop the franchise standard, which was a series of criteria concerned with the management and running of a firm, but not with an assessment of the quality of the work done. Firms that applied for a franchise had to demonstrate that they met the standard, and in return were allowed to describe themselves as franchised and charge a slightly higher hourly rate for the work that they did. However, the franchise system was voluntary, and many firms simply did not apply, and in any event, it offered little insight into the quality of work done.

2.6Meanwhile, despite periodic attempts to restrict it, expenditure on legal aid was increasing steadily. By the late 1990s, the new Labour government took the view that radical reform was needed and adopted the recommendations of a report commissioned by the previous government and carried out by Sir Peter Middleton.

2.7The result was a complete overhaul of the system. The Legal Aid Board was abolished and replaced by the Legal Services Commission (LSC), and the entire legislative basis of legal aid was re-written.

2.8The base of the revised scheme was the Access to Justice Act 1999. The Act created the LSC, and created two separate funds – the Community Legal Service (CLS) fund for civil work and the Criminal Defence Service (CDS) for crime. Both funds were administered by the LSC and in practice there was one single legal aid budget with no ring-fencing of either fund (though many called for them to be separated, as criminal and family expenditure took an ever larger share).

2.9The Access to Justice Act 1999 empowered the LSC to commission and procure legal aid services in such a way as to ensure that they were available to those who needed services in almost any way the LSC considered most appropriate. In practice, the LSC chose to fund services by exclusive contract, and that model continues into the post-LASPO scheme.

2.10The franchise standard was replaced by the Specialist Quality Mark (SQM), and made compulsory. Legal aid is funded by contract – without a contract you cannot do legal aid work – and having the SQM or Lexcel is mandatory for being awarded a contract. See chapter 18 for details on the contract award process.

2.11Therefore, since 2000 (for civil) and 2001 (for crime), legal aid work has been the exclusive preserve of organisations the LSC, subsequently the LAA, has contracted with to procure services.

2.12Over the years since the mid–1990s, budgetary control was achieved by holding down eligibility levels and payment rates. The proportion of the population eligible for legal aid steadily shrank, and hourly rates stagnated; the lack of inflationary rises meant an effective cut of around 40 per cent by the time of the LASPO cuts.