Public Accounts Committee condems LSC for poor financial management

The procurement of legal aid in England and Wales by the Legal Services Commission (LSC) has come under fire, from the Committee of Public Accounts.

The LSC a non-departmental public body of the Ministry of Justice (MoJ) spends £2.1bn a year on civil and criminal legal aid and £125m on administration. While the commission has not increased legal aid spending in the last five years, the organisation has poor financial management, weak internal controls and deficient management information. As a result, the commission had its accounts qualified for 2008/09.

Edward Leigh MP, Chairman of the Committee of Public Accounts said:

"The Legal Services Commission has been doing a far from competent job of buying legal aid from lawyers. It spends large amounts of money - more than £2 billion in 2008-09 - but its financial controls and management information have been lax. It is indicative of this poor oversight of spending that the Commission managed to overpay solicitors in 2008-09 by some £25 million, resulting in the qualification of its accounts.

"The Commission's plans, recently abandoned, to introduce price competition in the legal services market were hamstrung by its lack of knowledge of that market. It must now gather much better information on the costs and profits of firms providing legal aid. Without this basic information, the Commission will not be able to set prices which are good value for money for the taxpayer and, at the same time, make legal services work attractive enough to firms.

"The Commission's lack of grip of the basics and lack of a clear strategic direction were compounded by a muddled relationship with its sponsoring department, the Ministry of Justice. Both Commission and Department must now adopt a more coherent approach to introducing reforms to the legal services market."

Posted 02.02.10