The government’s £1.2bn court modernisation programme faces a ‘daunting challenge’, its spending watchdog has warned.

A report from the National Audit Office (NAO) said the ‘ambitious reform programme’, which was already behind schedule and had been scaled back, was unlikely to achieve all of its aims in its extended timetable.

HM Courts and Tribunals Service (HMCTS) estimates there will be a funding shortfall of £61m, assuming that the Treasury agrees that all previous years’ underspends can be carried forward. Without this agreement, the funding gap could be £177m.

The change programme to introduce new technology and working practices to reform and upgrade the justice system began in 2016. By March 2023, HMCTS expects to employ 5,000 fewer staff, hold 2.4 million fewer cases in physical courtrooms per year and reduce annual spending by £265m.

The timetable to complete the reforms has been extended from four to six years, but the NAO said that ‘delivering the reforms successfully remains extremely challenging’ and warned that ‘there is a significant risk that HMCTS will not be able to achieve all it wants within the time available’.

Sir Amyas Morse, the head of the NAO said: ‘Modernising the justice system is an ambitious challenge. HMCTS has improved its approach, but overall it is behind where it expected to be and significant risks remain.’