Higher quality advice for clients, better value for taxpayers and more constructive relationships with legal aid service providers are proposed today by the Legal Services Commission (LSC).

The LSC is consulting on the national Preferred Supplier scheme that will radically change the way it administers the ?2 billion spent on legal aid services each year by setting higher entry standards for law firms and advice agencies wanting to do legal aid work.

Lord Carter?s Review of Legal Aid Procurement clearly sets the context for the proposals in this consultation paper. We have worked closely with Lord Carter and his team and believe that the Preferred Supplier approach will provide a platform for the delivery of the changes recommended by the review. Lord Carter?s proposals for criminal legal aid were set out in his interim report published on 9 February.

The LSC?s Preferred Supplier scheme will ensure that all firms and agencies doing legal aid work offer a consistently good quality of advice to legal aid clients and that they have the capacity to undertake sufficient volumes of work. In return, firms and agencies will benefit from a completely new working relationship with the LSC.

Jonathan Lindley, Executive Director for Service Design at the LSC says: ?We have been focused on ensuring clients get quality advice for some years now, through the introduction of the Specialist Quality Mark, franchising and contracting. It?s now time to move the system forward and start investing in raising the bar for firms and agencies from the outset, rather than having a time-consuming and expensive policing regime for those already in the system.?

Ultimately, the LSC intends only to offer legal aid contracts to those with Preferred Supplier status and expects to be working with fewer, larger organisations as a result.

Sir Michael Bichard, Chair of the LSC says: ?We want a genuine partnership with the firms and agencies who will deliver quality services for clients. Preferred Suppliers will benefit from greater decision-making power, simplified processes and more information to help them plan the future of their businesses. Improved customer service through LSC Relationship Managers will be at the heart of this new way of working. I believe everyone will benefit ? taxpayers, service providers and, most importantly, the people who need help to resolve their problems.?

The proposals for a national scheme follow on from a successful pilot the LSC ?.more operated throughout 2004/05, which tested many of the proposed changes on a smaller scale. These are aimed at significantly streamlining the current legal aid system and include: devolving more funding decisions to solicitors and advisers to take on behalf of their clients; transacting with providers via e-business and simplifying administrative processes.

The implementation of the Preferred Supplier scheme is expected to take three years (2006 ?2009) and will be closely linked to the progress of Lord Carter?s reforms.

The key proposals outlined in the Preferred Supplier scheme consultation document are:

• To change the way the LSC buys legal aid services so that only Preferred Suppliers will have a legal aid contract by the time the implementation of the Carter reforms are likely to be completed (expected to be during 2009).
• To give Preferred Suppliers a greater and potentially increasing range of devolved decision-making powers, and to significantly speed up LSC decision-making on non-devolved decisions (primarily those involving high cost cases).
• To simplify billing and claiming processes for Preferred Suppliers and to reduce transaction costs on both sides as a result.
• To significantly reduce inspection and auditing of Preferred Suppliers and instead use risk-based, largely remote, performance management tools as well as encouraging providers to take greater responsibility for managing their own performance.
• To base Preferred Supplier membership on significantly higher up-front entry criteria. Preferred Suppliers will need to demonstrate: a high quality of legal advice as measured by Peer Review and File Assessment; a good history of compliance with existing legal aid requirements; value for money, and; a soundly financed and sustainable business.
• To forge a new relationship ? based on genuine partnership ? with providers of legal aid services and to give the lead responsibility for managing this partnership to an LSC Relationship Manager. Their role will be to work closely with each Preferred Supplier to identify improved ways of working and provide better information to help them plan their future and develop their legal aid businesses.
• To award Preferred Supplier status to organisations or firms ? not individual offices.
• To specify that e-business is used for all transactions between the LSC and Preferred Suppliers.