The true cost of the legal aid cuts?

Each government department tends to work on its own budgets in isolation. This can be a problem, especially when cuts are being considered. The order has been handed down from the Treasury to make cash savings and officials in the Ministry of Justice (MoJ) are scrambling around to find these, with little regard to their knock-on impact.

Citizens Advice argues that the state has to pick up the cost of homelessness, poor health and the other consequences of people not receiving advice on civil justice problems. It has published research to back this up which shows the savings other government departments make when people get early advice. LAG has taken the figures which Citizens Advice produced and combined these with the government’s proposed cuts in legal aid for housing, benefits, debt and employment, to arrive at figures which give the true cost of the legal aid cuts (see below).

Our research shows that £49m of expenditure on legal advice saves the government £286.2 million in other expenditure. In other words - £1 of spending on civil legal help saves the government around £5 in other public expenditure.

Category of Law	Reduction in legal aid (08/09 figures)[i]	Savings per £1 spent on legal aid [ii]	Total savings to the state from expenditure on legal aid
Housing	£7m	£2.34	£16.4m
Welfare benefits	£22m	£8.8	£193.6m
Debt	£16m	£2.98	£47.7m
Employment	£4m	£7.13	£28.5m
	£49m		£286.2m

Earlier this year the House of Commons Justice Committee stressed in its report on the proposals for legal aid that it was surprised that the government was introducing changes to civil legal aid for cases such as these, 'without assessing their likely impact on spending from the public purse'. The Committee, which is chaired by the well regarded Liberal Democrat MP, Alan Beith, suggested the government needs to take this into account 'before taking a final decision on implementation'. [iii]

Last week, apart from a few minor changes, the bill committee in the House of Commons considering the legislation which will introduce the legal aid cuts rejected proposals to reverse them. A third reading of the bill is expected to take place late next month. This will be an opportunity for the House of Commons to get the government to think again about these cuts which are penny wise, but pound foolish to the public purse.

[i] Legal aid reform: scope changes, MoJ, 028, page 17.

[ii] Towards a business case for legal aid, Citizens Advice, July 2010.

[iii] Justice Committee Report, page 54.