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The Ministry would have been better able to deliver its policy objectives if it had developed and made use of a robust evidence base according to the Public Accounts Committee's report published on Wednesday 4 February 2015.

• Report: Implementing reforms to civil legal aid
• Report: Implementing reforms to civil legal aid (PDF 203KB)
• Inquiry: Implementing reforms to civil legal aid
• Public Accounts Committee

Chair's comments

"Access to justice is one of the most fundamental principles of our society, and the purpose of legal aid is to ensure that the poorest and most vulnerable people enjoy that basic right.

So it is deeply disturbing that the Ministry of Justice’s changes to civil legal aid were based not on evidence but on an objective to cut costs as quickly as possible. The Permanent Secretary told us that “the level of spend” was the "critical" factor driving the reforms.

The Ministry still does not understand what its reforms mean for people. It has little understanding of why people go to court and how and why people access legal aid in the first place, and only commissioned research into these issues in 2014 – more than a year after its reforms were implemented.

There are signs that the complexity of the justice system may be preventing people who are no longer eligible for civil legal aid from securing effective access to justice.

The Magistrates’ Association raised concerns about the increase in the number of people representing themselves in court – known as litigants in person – caused by the reforms, especially in cases involving children.

There has been a 30% rise in the number of cases starting in family courts in which both parties were representing themselves, and the number of contested family cases reaching the courts rose from 64% in the three months before the reforms to 89% a year later. The Magistrates’ Association told us that these cases with litigants in person also take longer and place additional pressure on the courts service.

Moreover, the Ministry’s approach to implementing the reforms has inhibited access to mediation for family law cases. Amazingly, it failed to foresee that removing legal aid funding for solicitors would reduce the number of referrals to family mediation.

Mediations for family law matters fell by 38% in the year after the reforms, rather than increasing by 74% as the Ministry expected. Referrals to the assessment meetings that determine suitability for family mediation fell by 56%.

The Ministry does not know, and has shown little interest in, the knock-on costs of its reforms across the wider public sector as a result of increased physical and mental health problems caused by the inability to access advice to resolve legal problems.

It therefore has no idea whether the projected £300 million spending reduction in its own budget is outweighed by additional costs elsewhere. It does not understand the link between the price it pays for legal aid and the quality of advice being given. In short, there is not a lot the Ministry does know.

Therefore, while the Ministry is on track to make a significant and rapid reduction in the cost of legal aid, it is far from clear that these savings represent value for money.

It needs to get on and urgently review the impact of its reforms and, where necessary, act to address issues such as cost-shifting and people struggling to access justice."

Margaret Hodge was speaking as the Committee published its 36th Report of this Session which – on the basis of evidence from Hugh Stickland, Chief Economist, Citizens Advice, Malcolm Richardson, Deputy Chairman, The Magistrates’ Association, Ursula Brennan, Permanent Secretary, Ministry of Justice, Matthew Coats, Chief Executive, Legal Aid Agency, Catherine Lee, Director General, Law and Access to Justice Group, Ministry of Justice and Peter Handcock, Chief Executive, HM Courts and Tribunals Service – examined the subject Implementing reforms to civil legal aid.

The Ministry of Justice (the Ministry) is on track to make a significant and rapid reduction to the amount that it spends on civil legal aid. However, it introduced major changes on the basis of no evidence in many areas, and without making good use of the evidence that it did have in other areas. It has been slow to fill the considerable gaps in its understanding, and has not properly assessed the full impact of the reforms.

Almost two years after the reforms, the Ministry is still playing catch up: it does not know if those still eligible are able to access legal aid; and it does not understand the link between the price it pays for legal aid and the quality of advice being given. Perhaps most worryingly of all, it does not understand, and has shown little interest in, the knock-on costs of its reforms across the public sector. It therefore does not know whether the projected £300 million spending reduction in its own budget is outweighed by additional costs elsewhere. The Department therefore does not know whether the savings in the civil legal aid budget represent value for money.

Legal aid pays for legal services for people who meet eligibility criteria set by the Government. In November 2010, the Ministry set out plans for reforms to civil legal aid and these took effect in April 2013. The reforms had four objectives: to make significant savings to the legal aid budget; to discourage litigation at public expense; to target legal aid to those who need it most; and to deliver better overall value for money. To achieve this the Ministry introduced reforms including: removing many areas of law from eligibility for legal aid; tightening the financial eligibility criteria for legal aid; cutting fees paid to providers by 10%; and providing more legal advice over the telephone. The Ministry is responsible for legal aid policy and the Legal Aid Agency (the Agency) is responsible for the operation of the legal aid system, including managing contracts with legal aid providers and monitoring the quality and accessibility of legal aid. The Agency spent £801 million on civil legal aid in 2013-14, £141 million less than in 2012–13.

Conclusions and recommendations

The Ministry would have been better able to deliver its policy objectives if it had developed and made use of a robust evidence base. The Ministry is on track to meet its objective of making a significant reduction to spending on civil legal aid, but it is far from clear whether the Ministry has achieved its other objectives of reducing the number of cases coming to court, targeting civil legal aid to those who need it most, or delivering better overall value for money in civil legal aid.

The Ministry consulted on its reforms in November 2010, more than two years before implementing them. Despite this, it gathered little evidence before implementation and did not make good use of the information that it did have. For example, the Ministry was told during its consultation that people who are subjected to domestic violence may have difficulty providing evidence to demonstrate their eligibility for legal aid after the reforms, but was still making changes to the evidence rules in April 2014, a year after the reforms were implemented. The Ministry admits that it still has little understanding of why people go to court and how and why people access legal aid. It commissioned a research project to look at these issues in 2014, more than a year after the reforms were implemented. It does not expect to publish this until mid-2015, two years after the reforms were implemented.

Recommendation: Where policy intent is clear, the Ministry should gather the necessary evidence proactively so that decisions are taken on that basis.

The Ministry’s approach to implementing the reforms has inhibited access to mediation for family law cases. As this Committee has noted before, mediation can be a cost-effective alternative to court for resolving disputes in many cases, and the Ministry intended that more people with family law disputes would use mediation instead of the courts. But mediations for family law matters fell by 38% in the year after the reforms, rather than increasing by 74% as the Ministry expected. Referrals to the assessment meetings that determine suitability for family mediation fell by 56%.

The Ministry knew that solicitors were the major channel through which people were referred to mediation, but failed to foresee that removing legal aid funding for solicitors would reduce the number of referrals to family mediation. In April 2014, the Ministry made mediation assessment meetings mandatory for couples seeking to go to court over disputes about children or finances, in an attempt to address this problem. However, we also heard concerns from the Magistrates’ Association that mediation firms may have gone out of business as a result of the drop in work in the year after the reforms. If this is the case, people may have difficulty finding a mediation service to provide their mandatory mediation assessment.

Recommendation: The Ministry should closely monitor the take up of mediation following the changes it made in April 2014, and should take prompt action if this does not increase as expected.

Contrary to its assurances to Parliament, the Ministry does not know whether people who are eligible for legal aid are able to get it. The Ministry said in its 2012 impact assessment that it would establish a robust mechanism to identify and address any shortfalls in the provision of legal aid, but it has not done so. The Agency monitors provision of legal aid by the number of contracts it awards to providers, rather than the amount of work actually being done. But awarding contracts does not alone guarantee supply of legal aid, because the Agency removed the requirement for providers to do a minimum amount of work to keep their contracts.

The Agency had not undertaken any analysis but the NAO identified that 12% of law firms holding legal aid contracts did not undertake any legal aid work in the year after the reforms. There were 53 local authority areas with fewer than 50 face-to-face civil legal aid cases, and in 14 of these areas there were no cases started. The Agency was not able to explain the significant variation in provision and accepted that it needed to do more work in this area.

Recommendation: The Agency should, as promised in its 2012 impact assessment, establish a robust mechanism to identify and address any shortfalls in provision, building on the NAO’s analysis, so it can be confident those still eligible are able to access legal aid.

The complexity of the justice system may be preventing people who are no longer eligible for civil legal aid from securing access to justice. The civil justice system is complex and many people will not be able to represent themselves effectively in court. We heard evidence from the Magistrates’ Association that the increase in the number of people representing themselves in court (known as litigants in person or LIPs) caused by the reforms, especially in cases involving children, may have a negative impact on the administration of justice.

In addition, the Ministry’s exceptional case funding scheme, which is intended to provide legal aid for people whose human rights would be breached without it, is being used far less than expected, with 1,520 applications received in the first year after the reforms against an estimate of 5,000 to 7,000, and only 69 cases approved. The Ministry could not explain why applications were below expected levels but the legal aid providers consulted by the NAO said that the complexity of the exceptional case funding scheme made it very difficult for people to apply.

Recommendation: The Ministry should review and simplify the processes that it intends people who do not have legal advice to follow, to ensure that these processes do not restrict access to justice.

The Ministry cannot manage the impact of the increase in litigants in person, because it still does not understand the impact that they have on the courts service. The Ministry acknowledged in 2012 that the number of LIPs was likely to increase as a result of the reforms. Yet it has still not improved its ability to monitor the impact of LIPs on the courts. It does not collect reliable data on how long individual court hearings take, and its recently published analysis of court hearing durations was based on inadequate information. It is therefore not able to say whether hearings in which people represent themselves are longer or shorter than those in which legal representatives are present and it will not accept the anecdotal evidence provided by the judiciary.

The NAO identified a 30% rise in the number of cases starting in family courts in which both parties were LIPs. The NAO also identified an increase in the number of contested family cases reaching the courts, with the figure rising from 64% to 89%. The Magistrates’ Association told us that these cases with litigants in person take longer and place additional pressure on the courts service.

Recommendation: The Ministry should routinely collect reliable data on the operations of the court service, for example on hearing length, use of other court resources, types of case, and representation, and use this to better understand and manage the impact of LIPs.

The quality of face-to-face legal aid is unacceptably low, and the Agency does not understand the link between the price it pays providers and the quality of the advice. The Ministry cut fees paid to legal aid providers by 10% as a part of the reforms. This came on top of a 15 year period in which legal aid fees were not adjusted for inflation, which represented a real terms cut of 34%. A large majority of providers that the NAO consulted said that the fees paid for legal aid do not cover the costs of providing the service.

The Agency’s own quality assurance processes indicate that the quality of face-to-face legal advice is unacceptably low, with almost one in four providers failing to meet the quality threshold. This has serious implications in terms of both value for money for the taxpayer and access to justice for legal aid claimants. The Agency could not explain why these results were so bad, or whether they are related to the reduction in fees paid for civil legal aid. It seems to have done nothing to understand why some providers are falling short of the quality standards expected.

Recommendation: The Agency should set out targets to improve the quality of legal advice and a plan and timetable to meet those targets. It should do this by identifying and addressing the reasons that providers are failing its quality assurance tests, including whether or not the high failure rate is driven by the decline in legal aid fees.

The Ministry does not know whether the reduction in spending on civil legal aid is outweighed by additional costs in other parts of the public sector as a result of the reforms. The Ministry identified the potential for wider costs to the public sector in its 2012 impact assessment, but has since done nothing to establish the likelihood or measure the scale of these costs. It was unable to say whether the cuts that it made to legal aid spending have simply shifted costs elsewhere in the public sector. For example, the Ministry has not estimated the likely knock-on costs as a result of increased physical and mental health problems arising from the inability to access advice to resolve legal problems.

The Ministry told us that it is not possible to quantify wider costs to the public sector. We were disappointed by this lack of ambition, as this is fundamental to assessing the value for money of the reforms. The Ministry seems unwilling to even ask other departments about any impacts on their spending, and we note that other departments (for example, Transport) are only too willing to estimate wider benefits to the public purse, despite the inherent difficulties, when carrying out cost benefit analysis to justify spending. We received evidence from Citizens Advice about the considerable work it has done to estimate the likely savings to the public purse as a result of the advice it provides and we would expect that the Ministry would do similar work to understand the impact of its reforms.

Recommendation: The Ministry should identify the wider costs to the public sector as a part of a full evaluation of the impact of the reforms.

Further information

• National Audit Office report: Implementing reforms to civil legal aid
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