Wednesday 26 June 2013 by Catherine Baksi
The amount spent on legal aid and the number of people helped dropped over the past year - but the cost of administering the Legal Services Commission went up, according to the commission's final annual report.
The report, published yesterday, is the first in five years not to have been qualified by the National Audit Office because of the high number of erroneous payments made to providers.
In 2012/13, the LSC spent a total of £1.9bn on legal aid providing 2.3m 'acts of assistance', compared with £2.1bn spent on 2.5m acts of assistance in 2011/12.
In civil cases, the LSC spent £941.6m last year, down 15% on the £977.7m spent in the previous year. The number of acts of assistance fell from 1.09m to 0.93m.
Spending on criminal legal aid fell to £975.1m in 2012/13 down 2% from £1.1bn in 2011/12, and the number of acts of assistance likewise dropped from 1.39m to 1.36m.
However the LSC's administration costs rose from £82.1m in 2011/12 to £111.2m in 2012/13. The additional costs are understood to be associated with winding up the commission.
The LSC is frequently criticised for not paying lawyers in a timely manner, but the report states that bills were paid within the 30-day performance target in 94%-99% of cases.
The LSC was abolished in April and replaced by the Legal Aid Agency, which is an executive body of the Ministry of Justice, through the Legal Aid Sentencing and Punishment of Offenders Act 2012.
The year saw the introduction of fee cuts in October 2011 and February 2012, which the report said are expected to achieve savings of up to £160m a year. In addition, it expects to make savings of up to £240m by 2014-15 from the scope and eligibility changes made in LASPO.
The reports states that the 'irregular payments' - those made in error or in cases where eligibility could not be proved - fell by 30% over the year, to £31.1m, and the amount of money recovered by the LSC increased from £10m to £16.6m.
For the past four years the comptroller and auditor general Amyas Morse has qualified the LSC's accounts due to the amount of irregular payments.
This year the report was not qualified. Morse said that the LAA starts with 'an improved assurance framework embedded within the business' underpinned by more 'robust' supplier management and practices.
He said the levels of irregularity had 'significantly reduced' and there is more 'routine recovery' of irregular payments.
But he said 'significant challenges' remain for the LAA to ensure that progress and improvements are maintained and sustainable.
He said gross irregularity 'remains high' for civil legal help schemes and has increased for some schemes, but he accepted that further improvement is 'challenging' due to the 'inherent difficulties' of administering means-tested payments, and from the 'complexity' of the legal aid schemes.
Commenting on the report, the LSC chief executive, now the LAA's chief, Matthew Coats (pictured) said he was pleased that the qualification of the accounts had been removed. He said: 'This follows a sustained amount of hard work by LSC staff and ongoing close engagement with providers of legal aid.'