A National Audit Office report into criminal legal aid has revealed that the sustainability of the service and its value for money to the taxpayer is at risk.

The report, published today, also reveals that 16 per cent of solicitors firms providing legal aid criminal defence services make 0 per cent profit and 14 per cent of firms make only 1-5 per cent profit.

The figures represent the position before the partners receive a single penny - 0 per cent profit means that the partners did not earn any income whatsoever for their work. In effect, they are being cross-subsidised by more profitable work that the firm does.

Most worryingly, says the Society, 28% of firms said they were unlikely to be conducting legal aid in five years time because of unprofitability, the prospect of tendering or retirement.

The Law Society has welcomed the report?s recognition of the issues facing the legal aid system, together with the findings which suggest that the Legal Services Commission ? the body charged with administering legal aid ? has little understanding of its suppliers (law firms) and a poor record in trying to influence reform.

Law Society legal aid manager Richard Miller says:

?This report goes a long way in dispelling the belief that legal aid lawyers are profiteering from the system. Many of them are not even earning any income from the work they do at all. This is a picture of a supplier base on the point of crumbling into insolvency.

?It is those requiring access to justice who will lose out in the long run if there are not enough solicitors providing legal aid criminal defence services.?

Part of the NAO report says that: "Our findings demonstrate that the way criminal legal aid has been both administered and procured in England and Wales presents risks to the value for money provided to the taxpayer, as well as to the sustainability of the service."

Richard Miller adds: ?We are deeply concerned at the catastrophic picture this paints of the economically precarious position of the majority of the solicitors providing legal aid in criminal defence work. We support the findings that the LSC needs to do more in administering the system in a way that is more compatible with the long-term stability of the suppliers.

?The NAO makes a number of recommendations for reform. These will need to be studied but we are not convinced that all of them will necessarily provide the sustainability that is needed. A major overhaul of the system is needed to simplify criminal defence contracts so that they are easier and less expensive for the legal aid solicitors and LSC to administer.?