“If legal aid is a demand-driven service, why does the spend on it not change with fluctuations in demand?”
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A few years ago, former Legal Aid Agency (LAA) head honcho Shaun McNally spoke at one of our annual conferences. Shaun was brave enough to take questions from a room of disgruntled and frustrated practitioners. During one of these exchanges, he said that the LAA doesn’t have a fixed budget – legal aid is a demand-driven service. Let’s stop and think for a moment about that. In essence, it means that spending on legal aid (both civil and criminal) is not capped in advance and that the government will spend what is required to respond to demand (ie, eligible clients requiring legal assistance).
But if that is the case, why does the spend on legal aid not increase (or even decrease) when there are fluctuations in demand? The answer to this is that while the legal aid budget is theoretically demand-driven, there are a number of factors that determine how much demand ever meets the supply side of the equation (ie, legal aid providers). Many of these factors are what I will call ‘administrative barriers’ for the purposes of this piece. All of them require close and careful consideration by the Ministry of Justice (MoJ) as part of the
Review of Civil Legal Aid if the government truly wants to create a sustainable system.
Control who gets legal aid
This particular mechanism is not controversial in and of itself but becomes more problematic the more you look at how it works in practice. The government decides who is poor enough to receive state-funded legal advice via the earnings and other thresholds built into means testing. It decides how people
prove that they are poor enough through the evidence required to pass the means tests. It decides which types of problems are important enough to warrant state funding. And it decides how to determine whether a specific case is likely to succeed and therefore attract funding. The government even controls the methods that people use to access services and the ability and capacity of suppliers to respond to client demand (see below). Every single one of these control mechanisms in the current system is flawed, notwithstanding the relatively positive outcome of the recent
Legal Aid Means Test Review.
1See Government response to Legal Aid Means Test Review, CP 842, MoJ, May 2023.Control who provides legal aid
Again, on the surface this is not a problematic concept because there must be some control over which organisations deliver a publicly funded service (unless, of course, you’re talking about urgently procuring PPE). You need to be satisfied that your suppliers have the relevant expertise and will work to the required standard. But, again, dig a little into the detail of the various mechanisms, or – let’s tell it like it is – the administrative barriers put in place, and you can see why the provider base has shrunk so drastically over the past 15 years.
Let’s list some of the administrative barriers that impact on supply (a detailed analysis of each one could fill an entire column in Legal Action):
•if you don’t increase fees in three decades, and you know that the costs of running an organisation increase over time, then you know, categorically, that fewer and fewer organisations will be able to do the work;
•if you impose heavily bureaucratic contracts and systems and you know that compliance comes at a cost, then the adverse impact on providers will increase each year when this is combined with gradual, real-terms reductions in fees;
•if you only tender for new contracts every four/five/six years, then potential providers are locked out of the system for long periods of time;
•if you impose completely arbitrary matter start allocations, then you will influence business models and suppress capacity without any reference to local demand;
•if you make providers work at risk, then you know that many providers (who are working with low or even no profit margin) won’t be able to take on some cases; and
•if you introduce other risk factors, such as delays in obtaining payment, into an already unviable market, then you know that some providers won’t survive.
If senior civil servants don’t know about the impact of any of these issues, should they be in charge of setting policy in relation to financial stewardship, contracting, auditing and commissioning in the context of a billion-pound government-funded scheme?
Don’t ask questions if you don’t want to know the answer
You have to ask yourself, given that the MoJ (or the lord chancellor) ‘must secure that legal aid is made available in accordance with this Part’:
2Legal Aid, Sentencing and Punishment of Offenders Act 2012 s1(1). why does the MoJ not seek to work out how many people need legal aid and therefore what resources are required to meet this statutory obligation? Is it because conducting the required research would be really tricky and cost some money? Perhaps. More likely, it is because once you know, or can approximate, how many people need legal aid, you can then be held to account if you fail to secure that it is actually made available to them. No data, no accountability.
You also have to ask yourself, given that the government is so keen to respond to criticism by saying ‘we spend one-point-however-many billion on legal aid each year’: why does it not seek to demonstrate just how effective that investment has been at improving lives, protecting and enhancing rights and holding other public bodies to account? If I were head of the MoJ, this is one of the first things I would do (which is probably why they wouldn’t put me in charge).
Imagine being a civil servant and your boss tells you what a cracking job you are doing because you have funded thousands of cases that have lifted people out of poverty, protected victims from harm, stopped unlawful actions by state actors, etc. Imagine you could show other government departments, the press and the electorate that legal aid is this incredibly positive thing funded by the state. But then, if you did that, how could you introduce that next cut or that next reduction in scope? And as a champion of access to justice, how would you react when legal aid is traduced by the right-wing media? What a conundrum that would be.
So legal aid may, in theory, be a demand-driven service, but there are many ways that services can be oriented to ensure that there is absolutely no correlation between supply and demand. It is phenomenal that lawyers continue to work so passionately and effectively within such a poorly designed and resourced system. We need the MoJ’s current review to fix it and unleash the true potential of these astonishing lawyers to change, improve and even save lives. It is that important.