Future uncertain

The Legal Aid, Sentencing and Punishment of Offenders Act 2012 finally finished its Parliamentary progress last week, writes Simon Pugh. There were some last minute attempts to keep some of the victories won in the House of Lords, but those that will have the biggest impact on the scope of the legal aid scheme were mostly overturned by the government in the House of Commons. Employment, almost all welfare benefits, most immigration, most debt, a significant part of housing are all going to be out of scope. And still the spectre of the mandatory telephone gateway looms over the medium term, even if in the short term it will not now include community care.

At Shelter we have been planning for some months for the tender process that is now about to begin, and trying to assess the impact of the cuts on our services across the country.

Unfortunately, much crucial information is not yet known. But we can piece together some detail from the various public pronouncements of the Legal Services Commission and the government. At the recent provider reference groups, Hugh Barrett the LSC’s Director of Commissioning, confirmed that existing civil contracts in community care, mental health, actions against the police, public law and mediation would continue and likely be extended until 2015. While this will provide reassurance for those currently doing that work, it does mean new entrants will not be able to bid for contracts.

All other contracts will be terminated, and there will be a tender process for family, housing and debt (including court duty schemes) and asylum and immigration. Given that the government has since conceded that upper tribunal cases, and first-tier tribunal ones where there is an issue of law, in welfare benefits will remain in scope, presumably they will be tendered for as well. Tenders are likely to open later this month.

What we don’t yet know is how many matters will be available in each procurement area – or even for sure what the procurement areas will be. Nor do we know how matter starts will be allocated. In his speech in Liverpool in February, the LSC Chair Sir Bill Callaghan said that the LSC envisaged a non-competitive approach in which providers would not be given a fixed allocation of matters, they would simply be given a licence to start cases, creating competition at client level rather than through the tender process.

But Hugh Barrett said that it was likely that there would be a non-competitive approach with fixed amounts of matter starts operating through a similar pro-rata allocation as in last year’s family tender process.

These are very different ways of allocating matter starts. If there is no fixed allocation – the Bill Callaghan approach – then each organisation can start as many or as few cases as it can attract clients. You stand and fall by your reputation, referral networks and marketing.

A pro rata approach, in areas where there is much competition, simply results in small numbers of matters being allocated to lots of providers. The LSC has published the outcomes of last year’s family tenders on its website; in most of the larger and more competitive areas, everyone who bid simply ended up with 151 matters each. The impact assessments for scope cuts predict significant cuts in matter starts across all remaining areas of law, meaning a much smaller pot to start with and likely to result in it being spread very thin.

So which is it to be? We don’t yet know. But which is chosen will have a big impact on, not just the outcome of the tender, but the longer-term future. One scenario leaves the choice of provider to clients and allows those that can attract work to do more of it; the other restricts the amount of work that anyone can do and in more competitive areas could result in lots of small, potentially non-viable contracts.

One thing is for sure. In the future, the legal aid market will look very different. Some providers will have pulled out of legal aid altogether, some will have shrunk, some may even try to grow. Overall, there will probably be fewer legal aid providers – the impact on the not for profit sector anticipated as being particularly stark – but what will decide who remains? Client choice, or tender outcome? Whether clients decide to come to you, or whether the LSC decides that only 151 of them can be seen? Later this month we may know the answer.

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