Legal Services Commission's accounts qualified as overpayments soar

30 Nov 10
The Legal Services Commission has had its accounts for 2009/10 qualified, the National Audit Office said today.
By Vivienne Russell


30 November 2010

The Legal Services Commission has had its accounts for 2009/10 qualified, the National Audit Office said today.

Auditors found that overpayments made by the commission, which administers legal aid payments in England and Wales, trebled last year to almost £77m. The figure for 2008/09 was £24.7m.

Of last year’s erroneous payments, £32.9m went on cases where eligibility for legal aid could not be demonstrated and £43.6m on cases eligible for legal aid but where lawyers overclaimed for the work they did.

The highest level of payment errors were in family and immigration cases. Within this area, the auditors found that 35% of claims were incorrect or not fully supported.

However, the NAO did recognise that the commission had begun to make changes to address these problems. It now has a stronger provider assurance framework and a better understanding of the full extent of risks to the legal aid fund from fraud and error. It has improved the quality of data and validation of key balances within the accounts.

NAO head Amyas Morse said: ‘The Legal Services Commission faces significant challenges in administering a complex legal aid system in a cost-effective way. In an environment of much tighter resources and significant staff reductions, although disappointing, it is not surprising that many of the problems I identified in my previous report have continued this year.

‘The commission has recognised the need to strengthen its financial management and I welcome the action that it has taken so far. However, there needs to be a sustained focus at senior levels within the organisation in order to deliver its Financial Stewardship Plan, as well as the cultural changes necessary to support effective financial management across the commission’s activities.’

Sir Bill Callaghan, chair of the Legal Services Commission, said the commission would continue to concentrate on strengthening its financial management.

'Over the last year, we have made significant changes to our financial management and this has led to better audit trails, risk management and the recovery of money. We believe our emphasis on developing more stringent accounting practices and targeted legal aid case management will have both short- and long-term benefits for our financial health,' he said.

'More stringent client-eligibility checks were recently introduced to ensure that only those who qualify for legal aid receive it... We are also taking practical steps to ensure that clients’ financial contributions are accurate.     

'In the long term, we plan to introduce automatic, electronic checks and controls that are less resource intensive. 

'As we move towards becoming an executive agency, we will continue to work collaborately with the Ministry of Justice to improve the way we procure and manage legal aid services so that our budget is spent effectively, provides value for money to the taxpayer and access to justice.'

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