News Release

Market-based reforms to make criminal legal aid more efficient

Date: 9 February 2006

Reforms to introduce a more sustainable market for publicly-funded criminal defence services are proposed today by Lord Carter of Coles as part of his review of legal aid procurement.

The report - "Procurement of Criminal Defence Services: Market Based Reform" - recommends a phased transition towards a vibrant, good quality and efficient market nationwide by 2009.

Since 1997, spending on criminal legal aid has risen by 37% in real terms. The amount spent has increased from £730 million to nearly £1.2 billion. England and Wales have the highest per capita spend on criminal legal aid in the world at £22 per head.

Lord Carter was asked by the Lord Chancellor last summer to produce a plan proposing ways of delivering a legal aid system that provides better value for money and controls continuing rises in public spending, while maintaining its quality and fairness.

Introducing his report, Lord Carter said:

"We should be proud of our system of criminal legal aid. It ensures that everyone, whatever their wealth, has access to justice. But there are inherent inefficiencies in the way criminal legal aid work is procured that need addressing if we are to control increasing costs.

Not withstanding the dedication and commitment of the profession, a significant amount of the criminal legal aid budget is spent on unproductive time and anomalies in the system.

Moving to a sustainable market-based procurement system should help create a quality defence service that rewards the most efficient suppliers, provides clients with appropriate choice and brings greater predictability to cost."

Lord Carter's report acknowledges that moving towards competition is a significant departure from the present system. The report therefore recommends the reforms are introduced over a three-year period to ensure that suppliers of criminal defence services are able to adjust and prepare for the changes. This would involve the following three phases:

• fixed pricing for all criminal legal aid work, including that provided in police stations, magistrates' courts and Crown Courts;
• a managed market, awarding contracts to efficient and good quality suppliers that can take on more cases, either individual firms or collection of firms formed to deliver the benefits of scale;
• managed price competition between efficient, good quality suppliers with safeguards to protect standards of quality, coverage in rural areas and diversity.

This phased approach fits well with the Legal Service Commission's preferred supplier strategy.

The report also recommends that the proposals in this report should replace the Commission's original proposals for price competition in London. The timescale and managed criteria for delivering the market are very different. The flexible approach proposed in the report includes greater controls to manage the risks to suppliers and continuity of delivery of services, especially to black and minority ethnic communities

Lord Carter added:

"The changes we propose are significant for those providing criminal defence services. Yet there is a more fundamental question regarding our legal aid system that goes well beyond the scope of this review.

It is the extent to which we as a society are prepared to continue to spend significant amounts of public money providing high quality legal representation to people who might be more effectively dealt with outside the criminal justice system. This is an issue that only government and, ultimately, the public can address."

Lord Carter's review team includes Guy Beringer (Senior Partner, Allen & Overy) David Gregson (Chairman, Phoenix Equity) and David Ross (Chairman, National Express Group).

The report was drawn up after extensive consultation with the judiciary, representatives of the legal profession and other leading players in the criminal justice system. Lord Carter praised the level of co-operation his team has received:

"I am very grateful for all the support and advice we have had from legal profession, as well as the Legal Services Commission, and the key players in the criminal justice system. I look forward to continuing working with them over the next few weeks as we move to the final report

The complete final package of reforms has to be costed - and I don't underestimate the scale of the challenge to come for everyone. Therefore, although the proposals in this report will lead to a fair and more efficient system, it is only when I have completed all aspects of the review that I will be able to make my final recommendations."

Lord Carter listened to the views of practitioners in forming his proposals. He will continue to do so in preparation of the final report, which will also take account of the work that Lord Carter commissioned the accountancy consultants, PKF, to do in analysing the efficiency of practitioners.

The financial details of the review's proposals will be included in Lord Carter's final report, covering recommendations for legal aid procurement in civil and family legal services, in spring 2006.

Notes to Editors

1. On July 5, 2005, Lord Falconer the Lord Chancellor and Secretary of State for Constitutional Affairs asked Lord Carter of Coles to examine how to improve the arrangements for purchasing publicly funded legal services.
2. Lord Carter was asked to produce a plan by early 2006 to implement a package of reforms to the way publicly funded legal advice and representation is procured by the state. The terms of reference can be found in the command paper "Fairer Deal for Legal Aid" (Cm 6591) and at www.legalaidprocurementreview.gov.uk.
3. The report can be found at www.legalaidprocurementreview.gov.uk.

END