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• Full report - Legal Services Commission, Community Legal Service Fund and Criminal Defence Service 2011-12 accounts

Amyas Morse, the Comptroller and Auditor General, yesterday qualified the accounts of the Community Legal Service Fund and the Criminal Defence Service because of errors in payments to legal aid providers.

The errors highlighted in today's report include £20.4 million paid to legal aid providers where the claim was not in compliance with the statutory fee regimes; and £15.2 million relating to legal aid payments for people who were not eligible or whose eligibility could not be proven. The total estimated amount of irregular payments has fallen by 28 per cent when compared with the 2010-11 accounts (from £49.5 million to £35.6 million).

The Commission has made significant improvements in the level of total irregular expenditure reported in 2011-12 when compared with 2010-11. The main areas of improvement are immigration and family Legal Help schemes (where estimated irregularity has fallen from £14.0 million to £2.8 million) and the Civil Representation Scheme (where irregularity has fallen from £18.2 million to £12.8 million).

However, irregularity has increased for some schemes. For example, claims made by solicitors and advocates in relation to Crown Court cases, which since 1 January 2011 have been administered by the Commission instead of HM Courts and Tribunals Service, have seen the estimated irregularity increase significantly since 2010-11 from £1.0 million to £4.5 million.

The Commission continues to take steps to improve, such as further strengthening compliance testing and examining the root causes of error. This is particularly important at this time in light of the planned legal aid reforms under the Legal Aid, Sentencing and Punishment of Offenders Act 2012.

In 2010-11, the C&AG also limited the scope of his audit opinion in respect of the receivables balance (debt owed to the Commission by people receiving legal aid), as the Commission was unable to provide sufficient evidence to support the value of the balance.  The Commission has undertaken a substantial amount of work in 2011-12 to review and cleanse the recording and reporting of debt. The C&AG has, as a result of this work, been able to provide a clear opinion in this respect for 2011-12.

Amyas Morse, head of the National Audit Office, said today:

"The Legal Services Commission has made significant progress in the last year and I have noted the reduction in payment errors in my report. However, the error rate, particularly in relation to legal aid providers, is still high.

"The need for further progress is particularly strong given the forthcoming reforms. I expect the Commission to reconsider its risks and assurance regime ahead of these changes."

Notes for Editors

1. Legal Services Commission's Annual Report and Accounts were laid in Parliament before recess, for the first time in four years.
2. Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk. Hard copies can be obtained from The Stationery Office on 0845 702 3474.
3. The National Audit Office scrutinizes public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Amyas Morse, is an Officer of the House of Commons and leads the NAO, which employs some 860 staff. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services, and our work led to audited savings of more than £1 billion in 2011.