Legal Aid

Are the MOJ moving the goalposts on the required savings?

PUBLISHED May 28, 2013

At the London rally on 22nd May 2013, concern was expressed about whether the MOJ and the Lord Chancellor might be moving the goalposts on the savings required from their proposed scheme to transform criminal legal aid.  There is reason to be concerned based particularly on inconsistent comments made by MOJ staff in recent weeks and Mr Grayling?s apparent lack of understanding of some of the basic figures.


Therefore, I want just to look at one aspect of the paper, possibly the most important one of all - the amount that the MOJ says it wants to save from the criminal legal aid budget. I will leave aside the entirely false assertion that the budget has been spiralling out of control at precisely the time that it has been falling steadily for the last decade (or is that in fact what he means given that spirals can go down as well as up?).


I have heard a rumour that the required saving was not a request from the Treasury to Grayling but in fact a voluntary ambition which came directly from him. I cannot say that this information is reliable but perhaps a Freedom of Information request might tease out the actual origin of the proposed saving. One would imagine that someone within the MOJ would have made a reasoned calculation to come up with a figure as precise as £220 million. It can only have been calculated by reference to a percentage saving or a fixed sum saving either from a known base or to reach a set goal by 2018. The only other option is that it has been plucked out of the air at random and I am sure that not even this Government would base policy on such a whim.


The paper was released on 9th April 2013 and was presumably drafted in the months leading up to April. This is not a document put together by a 14 year old on work experience but would have been drafted by senior civil servants working to a specific brief to save £220 million. What figures did they have to work on at that time? The figures for the financial year 2011/12 had been published in the summer of 2012. The figures for 2012/13 have yet to be published and will not be available until after the consultation period closes on 4th June.  At the time of preparing the paper the financial year 2012/13 had not ended so one can only assume that they were working on the 2011/12 figures which are the only ones referred to in the paper itself.


In 2011/12 the criminal legal aid spend was in round figures £1.1 billion. The sum to be saved is neatly 20% of that figure. It would, in my view, be a safe bet that the required saving was calculated at 20% of the spend in 2011/12. This is further backed up by comments at some of the MOJ road shows around the country when it was said that if not enough firmswere to bid for PCT contracts an administrative cut of 20% would be imposed. Knee jerk rhetoric though this must have been, it does shed a bit of light on the likely calculations for the required savings. Knee jerk rhetoric it must have been because the MOJ seems to accept in the paper that continued administrative cuts would be unsustainable for the profession in the long term. This was also apparent view of the MOJ representatives at the recent London road show presentation.  They can hardly go on to make such a cut in the light of their own belief in its likely consequences.  


Therefore we can infer that the MOJ wants to save £220 million from the 2011/12 figures by 2018. At some roadshows this was confirmed by the MOJ panel as correct (e.g. Birmingham). So where are we with savings since 2011/12?


The figures for 2011/12 do not reflect some of the cuts that had been introduced from 2010 to 2012. There have been so many that it is difficult to keep up. Four spring to mind: a 10% reduction in police station fixed fees, the abolition of the committal fee, the introduction of a tiny fixed fee for litigation and advocacy combined for elected cases that crack in the Crown Court and the further reduction in the advocacy fees. The figures for 2012/13 are not yet available but a week after the consultation document was published the Legal Aid Agency published its business plan for 2013/14, the current financial year. The projected spend for criminal legal aid in this financial year is £941 million, a reduction on 2011/12 ofaround £198 million. The Criminal Contract Consultative Group (CCCG) met recently and the expected spend for 2012/13 was accepted by the LAA to be in the region of £950 million. This figure is below the projected spend in the LSC2012/13 business plan which set the cost at £1.025 billion. However, we will soon know which of these figures is more accurate and my money is on £950 million. If this turns out to be the case, the projected spend for 2013/14 will bepessimistic in Government terms and it is likely that the actual costs will be significantly less than the projected figure. The most recent cuts will continue to affect the amount spent as will the continued reduction in the number of cases coming before the courts. Legal aid spending is reactive and when the level of prosecutions drops significantly, the spend will go down.


One other aspect that seems
to have been ignored in the figures is that they include VAT. An expected spend of £950 million for the last financial year and the huge reduction on the previous year takes into account the fact that VAT increased from 17.5% to 20% on 4th January 2011. The rise in VAT should have led to an increase in the 
costs for that financial year probably in the region of £27.5 million but despite this hidden increase in cost, the actual spend has fallen by over £150 million. Has anyone considered what the effect of zero rating legally aided legal services for VAT might have on the profession, the criminal justice system or the Treasury? It would certainly reduce the MOJ budget by 20% in one fell swoop.


One might expect the Government to be overjoyed at the effectiveness of their cuts in the criminal legal aid system to date and especially those in the last two years. You might expect them to step back and take stock of the system as a whole and to consider from a reasoned perspective whether further cuts were necessary when they are well on target to reach the figures promised by Grayling. However, it appears that Grayling is unaware that such cuts have been made as he states in his foreword that having butchered (my word not his) civil legal aid, it was now the turn of the criminal budget, as if there had been no previous cuts to that budget!


It was reported in the Law Society Gazette on 17th May 2013 that, having been made aware that significant savings have already been made, the MOJ stated that the £220 million must be saved on top of what has already been saved: in effect £370 million on the 2011/12 figures - more than a third of the entire budget. This runs contrary to what was said by the MOJ at some of the roadshows and it is not clear if anyone has told the Minister. Grayling seemed unsure about the figures when interviewed by Catherine Baksi for the Law Society Gazette on 20th May 2013 when he was still quoting the figure of £1.1 billion as the criminal legal aid spend. He was also quoted as saying that the fall in volume had not been matched by a fall in the cost of legal aid. He stated that "What we have is becoming more expensive" and in "very tough financial circumstances" introducing price competitive tendering "is not an ideological choice; it is a financial necessity."


In this interview he sounded like a man badly briefed. The above comments are errant nonsense. The figures and the evidence demonstrate the exact opposite. As lawyers we deal in evidence not unsubstantiated rhetoric. It would be nice if the Lord Chancellor did the same. The cost of criminal legal aid is reducing year on year and in the last year or so has fallen dramatically. Criminal legal aid has been the subject of cuts for the last 15 or more years. There has been no rise in rates since about 1998. To paraphrase Monty Python, ascriminal lawyers we dream of a pay freeze as this would be absolute luxury.


The minister seems off the pace on the figures and the whole wretched system of PCT is as unnecessary as it is unworkable. He needs to be held to account on the original figures as he setthem out in the consultation document and he cannot now be allowed to move the starting base. The concern from someMOJ comments is that this is exactly what he will do. If he does shift his stated position in this way, he will not so much have moved the goalposts as packed them up and taken them to a different stadium. 

I hope we can rely on the Lord Chancellor to act in an honourable fashion on the figures and statistics as is befitting of his office. If he does, then he does not need PCT or any of the other proposed changes to make the balance of the required savings in the stated time frame.