Today Lord Mcnally led the government back into the House of Lords to debate the Legal Aid, Sentencing and Punishment of Offenders Bill. He and all peers had new evidence in front of them questioning the chance the Minsitry of Justice (MoJ) has of saving the £2 billion the department has committed to reduce the deficit.
The evidence now indicates that instead of making any savings the government’s cuts in legal aid will cost the taxpayer more and simply shift the costs onto other government departments.
Yesterday was the launch my of my long-awaited report (pdf) on the government’s legal aid reforms which found that for every £1 cut from the legal aid budget less than 42 pence will actually be saved from the public purse.
The MoJ will achieve its savings by largely cost-shifting to other cash-strapped departments. For example, for every £1 saved by removing clinical negligence from legal aid funding it will cost the NHS almost £3 (see FT report).
As part of the Legal Aid, Sentencing and Punishment of Offenders Bill currently before Parliament, the government is planning to save £350 million per annum through reforms to the legal aid system. The vast majority of these savings - some £279 million - are based upon altering the scope of legal aid, i.e. what is covered.
The proposals would remove almost 600,000 cases each year from the scope including clinical negligence, (private) family law and social welfare law. As 80 per cent of those receiving legal aid are in the bottom income quartile those most in need will suffer.
A key justification for the reforms was the need to save £2 billion from the MoJ budget as part of their contribution to tackling the fiscal deficit. Many commentators and stakeholders, however, have expressed concern these proposals would generate unintended costs in other parts of the system.
The justice select committee even said (see Hansard):
“We are surprised that the government is proposing to make such changes without assessing their likely impact on spending from the public purse and we call on them to do so before taking a final decision on implementation.”
In response, The Law Society commissioned me to investigate the likely impact of these scopereforms on the government’s budget.
You can read my full report (pdf) and a short summary on the KCL website but the message is clear: these scope reforms will generate substantial knock-on costs (circa £139 million per annum) and the government is unlikely to save more than 42 per cent of its predicated savings.
Much of the predicted savings are actually cost-shifting to other areas of government, of more than £80 million per annum. The proposals appear to be a false economy.
My conclusion is also clear: the government should conduct a cross-departmental review of the knock-on costs of these proposals before they are enacted. Give Parliament the full facts on which to make a decision. Today the House of Lords is debating an amendment which calls for such a review; let’s hope it gets support.
• Disability minister ignorant on how legal aid cuts affecting disabled people – Alex Hern, January 10th 2012
• The missing millions in the legal aid cuts – Alex Hern, November 2nd 2011
• Exposed: The legal aid minister’s £97,000 conflict of interest – Alex Hern, October 11th 2011
• Tory MP: People opposed to legal aid cuts are “irresponsible and unhelpful” – Jonny Mulligan, October 5th 2011
• NHS report urges government to stop legal aid cuts – Jonny Mulligan, July 12th 2011