The government has announced yet another another u-turn this time scrapping a fundamentally flawed new contracting scheme for criminal legal aid.
The proposed contracting cuts drawn up by former Justice Secretary Chris Grayling would have reduced the number of solicitor’s firms awarded “duty contracts” by two-thirds from 1,600 to 527.
Surprisingly the Conservative government mistakenly believed restricting competition in the market place would allow the remaining 527 Firms with Duty Contracts to make savings through economies of scale. It was argued that these savings would permit the government to introduce a second 8.75% fee cut whilst retaining representation for defendants throughout the country.
Firms awarded the contract were to be placed on a rota, and called on to represent people who qualify for legal aid at police stations and magistrates’ courts.
Any Criminal firms that were not awarded duty contracts would have struggled to survive leading to thousands of job losses and a restriction for client choice. It was also noted that in rural areas police station representation would have likely been scarce. Their was concern that savings could not be made by the remaining firms to absorb another pay cut resulting in a potential collapse in legal aid representation in some areas.
After the tending process was concluded and hundreds of firms were notified they were unsuccessful in their contract bids a whistleblower raised serious issues regarding the evaluation of bids. The Ministry of Justice denies the allegations.
It was alleged by a whistleblower that many of the staff assessing the bids were from Brook Street temporary staff agency on around £9.30 an hour and had no knowledge of legal aid or previous experience of public sector procurement.
The whistleblower said‘very limited’ training did not cover specific issues for each question in the procurement exercise or what to look out for when awarding points and went onto say ‘It was clear after a few days of assessment that there were insufficient staff to assess all the questions with any quality,’
The whistleblowers allegations in part led a large number of unsuccessful firms taking legal action against the Government. The Government faced 99 separate legal challenges.
On 28th January 2016 Michael Gove said he had decided ‘not to go ahead with the introduction of the dual contract and will also suspend, for a period of 12 months from 1 April, a second 8.75% fee cut which was introduced in July last year.
Law Society president Jonathan Smithers said ‘It is clear that a competitive approach to the provision of criminal legal aid services is not appropriate. The assurance that there will be no competitive tendering in the future gives practitioners greater certainty for the future.’
Smithers said suspending the second fee cut for litigators for a further 12 months ‘will provide some assurance to solicitors and will help support the viability of criminal legal aid services across England and Wales’.
Gove said that there had been two ‘significant’ developments since July last year.
Firstly, as a result of economies Gove made elsewhere in his department, HM Treasury had given him a settlement ‘which allows me greater flexibility in the allocation of funds for legal aid’.
Secondly, following challenges mounted against the government’s procurement process, Gove said it ‘has become clear’ that ‘there are real problems in pressing ahead as initially proposed’.
Service under the new duty provider contracts was originally due to commence on 11 January. The start date was postponed to 1 April when unsuccessful bidders’ legal challenges caused the tender process to be suspended in 69 of the 85 procurement areas.
The London Criminal Courts Solicitors’ Association said it applauded Gove’s ‘brave but sensible’ decision to ‘put this half-baked scheme out of its misery’.
Mark Fenhalls QC, chair of the Criminal Bar Association, said ‘it takes courage to make such decisions’.
Shadow justice secretary Lord Falconer said the government ‘must now come clean’ about how much public money ‘has been wasted on this doomed endeavour’ so that ministers ‘can be held fully accountable for this fiasco’.