The UK government launched a much-needed and long-overdue review of civil legal aid in January 2023. The launch saw the publication of terms of reference for the economic analysis and we immediately had concerns.

Although the terms of reference raised the issue of sustainability, they failed to mention fees, or the impact that the current fee level is having on sustainability, which was the most fundamental part of the problem for Law Society members. We challenged the Ministry of Justice (MoJ) on this, but despite some positive engagement with officials about what its analysis would cover, we still considered that there were significant gaps. We therefore decided to undertake our own economic analysis that would provide a more robust evidence base and look in detail at the costs of providing legal aid services compared to the revenues received.

The primary aim of our analysis was to provide clear and irrefutable evidence of the reason why this vital public service is disappearing. We also wanted to show that the lack of investment and the onerous bureaucracy mean the service is not financially viable to provide. The people who are impacted by this are those around the country trying to get their legal issues resolved, whether they are fighting to stay in their home or seeking protection for them and their children from a violent partner.

The financial consultancy Frontier Economics carried out the analysis and, for the first phase, we decided to go to housing legal aid providers. Large advice deserts across the country and repeated failed tenders suggested this area was ripe for analysis. Our research shows that 25.9m people do not have access to a local provider for housing advice. This has risen 6.6 per cent since 2019.

A call for participants received a good response from both not-for-profit agencies and private practitioners, who supplied financial information about their organisations, which included revenues, costs and profitability. Frontier also conducted hour-long interviews with 30 providers.

The findings reflect what we all thought was the case and show the inevitable outcome of nearly 30 years of underinvestment. All providers surveyed were found to be loss-making when Frontier excluded inter partes costs recovered and the majority were found to be loss-making even when accounting for inter partes revenue. The average fee earner is only able to recover around half of the full costs of providing housing legal aid. There is a high turnover of junior staff as they leave for better pay and work-life balance. Providers are working long hours with high levels of stress and burnout, which is exacerbated by the significant administration costs involved in housing legal aid work.

The second phase of the research is now underway, which Frontier is undertaking with family legal aid providers. It is following the same process as the housing research, collecting economic data and undertaking qualitative interviews. We have again received a good response from practitioners keen to demonstrate just how bad the situation is.

We are hoping to publish Frontier’s final report in April 2024, so that the findings can feed into the government’s proposed green paper. This rigorous analysis will provide robust evidence demonstrating that everything we have been hearing on the ground is true: this vital public service is disappearing fast due to a lack of investment.

Our judicial review on criminal legal aid1R (Law Society of England and Wales) v Lord Chancellor [2024] EWHC 155 (Admin). demonstrated that the government needs to listen to and act on the evidence. It must learn from its failure to do this on criminal legal aid and respond to the evidence base that we are providing.

The National Audit Office (NAO) report on Government’s management of legal aid (HC 514, 9 February 2024) echoes the findings of our research, bringing into focus the government’s failings on legal aid. Notably, in real terms, spending on legal aid fell by £728m (from £2,584m to £1,856m, a 28 per cent reduction) between 2012/13 and 2022/23. The NAO found that the MoJ lacks understanding of the demand for legal aid and the capacity of existing providers. It cannot ensure that advice is available to those entitled to it and civil legal aid fees are half what they were nearly 30 years ago.

The NAO report states:

The MoJ must ensure that access to legal aid – which is itself a core element of access to justice – is supported by a sustainable and resilient legal aid market.

We will continue to work with the profession to bring to light the dire state of civil legal aid.