Legal Aid

PCT: Have we been here before?

PUBLISHED May 18, 2013

The government?s announcement of the accelerated timetable for the consultation and introduction of price competitive tendering has thrown the profession into a frenzy of panic and speculation: can they really meet this seemingly impossible timetable? What form of tendering will be proposed? Will the government listen? Will my business survive??

By the time you read this article, the publication of the Ministry of Justice consultation may have answered some questions. Those that will remain unanswered, however, are the most important: will the government listen to us? And: will my business survive?

Dr Elizabeth Gibby?s announcement at the all-party parliamentary group on 20 March that the consultation would be on the "model, not the principle? of PCT was met with shock and dismay.

But we should also pay attention to the caveat given at the end of the meeting that if the profession could come up with an alternative proposal that would save the government the same amount as they imagine PCT will (an amount which has hitherto not been disclosed), they will consider this as an option.

Two camps

The profession seems to be divided into two camps on PCT: the "wake up and smell the coffee? camp (see Roger Smith?s blog of 21 March) who have what some would say is a more "realistic? approach and the "fight them on the beaches? camp, who believe in resistance at all costs.

Up until now, the Law Society and the practitioner groups, including LCCSA, have been in the latter camp and have seen off several attempts by the government to introduce PCT in various forms.

Will such resistance not succeed again? This time, the political and economic environment is dramatically different. The imperative on the MoJ to save money is unequivocal, and it has been made crystal clear that retaining the status quo is simply not an option. Even if competitive tendering is not introduced, the government will want to reduce the criminal legal aid budget by a sum running at least into tens of millions of pounds.

George Osborne has announced a further £142m of cuts to the MoJ budget, to be implemented before the 2015 general election. All the indications are that still further cuts will be demanded by the spending review for subsequent years.

Experience of the Legal Aid, Sentencing and Punishment of Offenders Act shows that the government has no compunction about making cuts that the profession considers both unconscionable and economically unviable. We are facing an uncertain and unpleasant future.

Money already saved

The Law Society and others have rehearsed ad nauseam the arguments that falling case numbers and previous cuts have already made savings. We have argued the need for wholesale reform of the criminal justice system generally, and have made numerous proposals that we believe could save costs to the system without the need for reducing fees further (see our website for the report "Improving efficiency in the Criminal Justice System?, October 2011, and our response to the green paper proposals for the reform of legal aid, February 2011).

The government still wants more savings and appears convinced that PCT will achieve this.  In this context, what should our stance as your representative body be?

Price competition

Let us be very clear; the Law Society remains firmly opposed to any tendering model based on price, subject to quality thresholds. We have repeated our arguments to the government. We have made clear the real dangers of market collapse if a crude form of PCT is introduced into a market that is neither ready nor robust enough to cope with it. Many crime firms simply do not have the resources or experience to submit bids that would ensure a sustainable supplier base.

Many of the factors affecting the cost of undertaking the work are beyond the control of practitioners, making it impossible to predict costs as part of a bid. This lack of certainty from the outset would create enormous problems for firms even in coping with the bid process itself.

However, the stark reality is that simple resistance to the government?s PCT model would probably result either in its implementation in any event or in cuts to current fees. Both results would have serious adverse consequences for the profession and the justice system, with many firms likely to go out of business.

A way forward

But what if we, as a profession, could come up with an alternative proposal ? or several proposals ? that would enable the MoJ to meet the Treasury?s demand to save money yet would also provide a model that most criminal law firms could live with ? or, even better, a model that may help you to run your businesses in a more efficient way?

The government has a duty to ensure that the supplier base remains viable and is able to continue to meet the needs of clients in the future. We need to seize the initiative and present our own ideas for a future vision of how criminal legal aid could work.

With firm opposition to PCT and unwavering support for our members, the Law Society is launching a consultation on alternatives to PCT. The responses to this will help us in responding to the government proposals and will give us a mandate to put forward ideas.

The proposals presented are those that received support in our online survey in 2012. They include:

  • giving preference to quality in any tender;
  • minimum contract size via contract terms;
  • minimum contract size via volume bids for duty slots;
  • block bids for police station cases;
  • a maximum bid size / minimum number of firms;
  • requirement to provide a full "cradle to grave? service;
  • work retained in-house;
  • competition only for very high cost cases. The paper also suggests a number of ideas for generating alternative sources of income, such as legal aid as a loan, and the use of top-up fees.

We emphasise that none of these ideas have been adopted as Law Society policy. Some may seem controversial. We will listen carefully to all responses and will, of course, not adopt policies that our members clearly oppose.

The Society has already been criticised for "selling out? by even daring to suggest that there may be alternatives to the current system, or that simple resistance to PCT is no longer an option. But we would ask you to think realistically about the options: PCT as proposed by government, the current system with fees slashed to an unsustainable level, or maybe ? just maybe ? an alternative that will enable you to stay in business and continue to provide a quality service to your clients.

We urge all LCCSA members to respond to the Law Society paper. Who knows: what emerges from this consultation may even produce strong enough arguments for us to once again send PCT heading into the hills with its tail between its legs.