Price competition looms large

Criminal
Plans for price competitive tendering are to be accelerated, the Lord Chancellor has announced, under a revised timetable to introducing savings to the criminal legal aid budget.


An eight-week consultation – originally scheduled for autumn this year – has been brought forward to April “given the need to achieve savings as quickly as possible,” Chris Grayling revealed in a written ministerial statement in March.

“We are committed to ensuring that the criminal legal aid scheme of the future continues to protect people’s fundamental right to a defence. However, against a background of continuing financial challenge, we need to ensure we target our resources in that area too,” he said.

Responding to the announcement, Maura McGowan QC, Chairman of the Bar, said the proposal for a model based on price competition was “a blunt instrument” and “probably means the end of the criminal referral Bar”.

“It assures none of the safeguards and qualities which we must expect from our justice system. It cannot be one which properly underpins the effective operation of the Rule of Law… Decisions on allocation of work must be made on quality and not on money alone,” she said.

“We are working very hard behind the scenes, which is where negotiations have to be carried out, to have as much impact on what goes into the paper as possible,” confirmed McGowan. “We only need another few weeks until the consultation paper is published and then the position will be clear. There is nobody at the Bar Council who is afraid to react in the strongest possible terms if that is what is required, but I do not believe that now is that time.”

Grayling has already announced the timetable for tender of contracts, lightly caveated with the words “subject to the outcome of the consultation”. He expects tenders to open this autumn, and the first contracts to go live in the autumn of 2014.

The issue has been a live one since Lord Carter’s July 2006 recommendation that “a healthy legal services market should be driven by best value competition based on quality, capacity and price.” In March 2009, the Legal Services Commission announced its intention to introduce Best Value Tendering (BVT) for police station and magistrates, backed by the then Labour Government which said it was trying to identify the priorities for expenditure on legal aid. The plan, however, was abandoned in July 2009 and a consultation announced on reducing the fees for Crown and higher court work, which led to the reduction of counsel’s fees by 12.5% the next spring.  BVT was revived by the Coalition who planned to consult on this in late 2011. While reiterating the Government’s belief that “competitive tendering is likely to be the best way to ensure long-term sustainability and value for money in the legal aid market”, the then Justice Secretary, Ken Clarke, postponed the consultation until autumn 2013. A Ministry of Justice spokesman said at the time that competition for criminal defence work will be introduced “with a view to extending it to civil and family work at a later date”.

Meanwhile the Legal Aid Agency, which replaces the Legal Services Commission on 1 April with estimated transition costs of £9.2m, has announced its first Director of Legal Aid Casework. LSC chief executive Matthew Coats will be responsible for making independent decisions on granting legal aid in individual cases.

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