LSC overspend £51m on legal aid

The Legal Services Commission (LSC) has been criticised by auditors after it overpaid legal aid providers by more than £51m this year.

Applicants who were ineligible or whose eligibility could not be proven were paid £21.2m and £29.5m was wrongly paid out due to solicitors’ errors. The overpayment equates to just over two per cent of the LSC’s total expenditure.

This is the third year running that the National Audit Office (NAO) has qualified the Community Legal Service Fund and Criminal Defence Service accounts. Last year, the LSC overpaid by an even higher amount—£76.5m.

During the course of the year, the LSC recovered more than £7m of overpayments made to legal aid firms, 50% more than last year.

Amyas Morse, head of the NAO, says: “While the LSC has made considerable progress, it still faces difficulties in reducing the level of error in payments to legal services providers.”

On a more positive note, the LSC reduced its administration spend by 8.4%, funded more than 2.7 million “acts of assistance”, and beat its target to make one million legal help acts of assistance via face-to-face or telephone advice.

Sir Bill Callaghan, chairman of the LSC, says: “The NAO acknowledges that the LSC has made substantial improvements in reducing the amount of overpayments made to legal aid practitioners.

“To make further improvements that respond to the NAO’s recommendations, the LSC will continue to concentrate on strengthening its financial management through its internal financial stewardship programme.”

Law Society chief executive, Desmond Hudson, said: “The system remains too complex and susceptible to errors—all the more unacceptable when every possible penny should be spent on improving access to justice.”