Call for national legal support fund

Levies on payday loan companies and financial penalties on government contractors for faulty social security assessments could be used to fund legal advice centres, an influential think-tank has proposed.

The Low Commission, established by the Legal Action Group last October to develop a strategy for the future provision of social welfare law when the next government is formed in 2015, has collected the views of more than 230 individuals and organisations.

Its draft report estimates  that “there is about £400m per year available to fund advice and legal support services – mainly coming from local authorities, the Money Advice Service and the legal aid that remains for social welfare law”, and that a further £100m is needed each year to ensure basic provision.
It advocates the creation of a national advice and legal support fund of £50m per year for 10 years to fund advice and legal support work. Funds would be drawn from central government, with 90% of the money going to local authorities and the remainder for national initiatives.

To help finance this, and to promote good decision making, government contractors could be penalised on a “polluter pays” principle for decisions that are later overturned. The other £50m would come from statutory, voluntary and commercial bodies. The report suggests, for example, that the Financial Conduct Authority impose a levy on payday loan companies, while solicitors pay in any dormant funds relating to dissolved companies and unclaimed damages in collective actions, and City law firms sponsor national initiatives.
 

However, it says millions of pounds could be saved if public services bodies got decisions right in the first place, for example, 35% of the 340,000 welfare benefits appeals in 2011-2012, which cost £66m, were upheld.
Its other recommendations include a national legal helpline and more support for Mackenzie Friends. The Commission, chaired by Lord Colin Low, is asking for responses to its proposals by the end of this month, and will publish its final report in December.