‘Competitive tendering’ – two words that strike fear and dread into the hearts of many a hardened criminal legal aid practitioner. But what do they mean, and why, after several failed attempts, is the government so keen to introduce this into a market that is almost unanimously opposed to the very concept?
The last attempt by the Legal Services Commission to introduce best value tendering (BVT) in 2009 failed before it had even begun, when in the face of fierce opposition from the Law Society and almost the entire legal profession, the Ministry of Justice asked the LSC to withdraw the proposal. And this after the LSC had already spent thousands of pounds employing consultants to design a surreal online auction in which firms would engage in a suicidal ‘race to the bottom’, trying to submit the lowest possible tender in an attempt to ‘underbid’ other firms for contracts.
The phrase ‘competitive tendering’ has become something of a mantra for the current and previous governments. It is trotted out on almost every occasion that a minister is called upon to speak about legal aid, and appears to have been adopted without question as the solution to what is perceived by government as the ‘unacceptable’ spend on criminal legal aid.
In these difficult times of belt-tightening, there is no government department or public service that has escaped cuts – many of them painfully severe, as we have seen with the drastic cuts to the scope of civil legal aid. It has been made abundantly clear that criminal legal aid will be no exception, despite the lack of any increase to fees for over 15 years; cuts to fees in some areas; and the acknowledged steady decrease in criminal work.
There is no specific figure that ministers want to save – they just want to save as much as they can, as soon as they can. We have pointed to the drop in volumes and the effects of previous cuts, and argued that they have made significant savings. But they expect more to be made, and still believe that competitive tendering is the ‘magic bullet’ that will enable them to assuage the Treasury.
The government has promised a consultation paper in April. Until that is published, we will have no idea what form this ‘competitive tendering’ might take, nor how (or indeed whether) it would work. We have not yet seen any data to demonstrate how it would save money from the criminal legal aid budget, while avoiding causing irretrievable damage to a fragile supplier base (1).
But is competitive tendering really the ideal solution for criminal legal aid? And if not, how can we persuade the government not to go down that road? Superficially, tendering is attractive for the government because it believes it is likely to achieve the best price for the work and ensure value for money. However, there are some real complexities: the government has never satisfactorily identified what is being bid for and many firms simply do not have the expertise to make realistic bids in a complex market.
Many of the factors impacting on the cost of undertaking the work are external and beyond the control of practitioners, making it impossible to predict with any certainty the true cost of the work for the purpose of any competitive bid process. There is also no way of guaranteeing the share of the market each firm will get in any competitive bid process. This lack of certainty from the outset would create enormous problems for firms even in coping with a bid process.
We can, of course, continue to try to resist whatever the government proposes. There are those who might ask why, when our resistance met with such success last time, it will not succeed again? The answer is quite simply that this time, the political and economic environment is much harsher. The imperative on the MoJ to save money is unequivocal, and it has been made crystal clear to the Law Society that retaining the status quo is not an option.
Even if the current system of administrative fees were retained, the cuts that would need to be made to those fees to generate the savings the Treasury is demanding would probably see many firms go out of business. Simple resistance to whatever model of competitive tendering is proposed in the forthcoming consultation would quite likely result in the implementation either of the tendering model or of the fee cuts, either of which would be liable to have very serious adverse consequences for the profession and the justice system.
But what if we, as a profession, were able to come up with an alternative proposal – or several proposals – that would enable the MoJ to meet the Treasury’s demand to save money from the criminal legal aid budget, yet would also provide a model that most criminal law firms could live with? Notwithstanding the need to save money, at the same time the government has a duty to ensure that the supplier base remains viable and is able to continue to meet the needs of clients. How it achieves this is yet to be decided. We are thus in a prime position now to influence the government’s thinking about the future of criminal legal aid tendering.
As a representative body, the Law Society must seek to represent the views of our members, and so far as possible to protect your interests. In a time of austerity, protecting your interests may well be a question of seeking to minimise damage; and doing so may entail accepting some unpalatable political realities. It is for this reason that the Society is currently asking some difficult questions of itself and of you, in an effort to find an alternative solution for criminal legal aid procurement that will minimise the damage to the future of the profession and the vital work that you do for your clients.
The first stage of this work was a short online survey to which over 200 members responded (2). We would like to thank everyone who took the time to contribute. Following consideration of the results of this survey, a more extensive consultation with the profession is planned. We intend to consult very shortly on more detailed proposals for alternatives to price competitive tendering, based on the ideas that had the most support in the survey, and other ideas that have been presented to us by our members.
The outcome of the consultation will be a key part of our strategy to seek to steer the government away from price competitive tendering as the only future model for criminal legal aid, and will strengthen our arguments in favour of other, alternative models. We therefore encourage as many members as possible who undertake crime work to respond to the consultation. Regular updates can be obtained by signing up to the Society’s ‘Legal Aid E-Alert’.
The Law Society survey - results
The results of the survey gave us a very helpful snapshot of the views of practitioners about a number of key issues.
1. There is little enthusiasm for the status quo
Only 11.9% of respondents strongly agreed that the status quo should be retained. More than half disagreed or were neutral. It was not the most popular of the options presented.
2. There is overwhelming opposition to price competitive tendering
Some 73.7% of respondents strongly disagreed with the option of a tender based on price after a quality threshold, and a further 15.7% disagreed. Even if the tender included quality criteria as part of the bidding process, almost half strongly disagreed, and a total of 73.1% were opposed. The idea of the LSC tendering with a small number of head contractors did not find favour. Two-thirds of respondents opposed this concept. There was also majority opposition, albeit by a smaller majority, to the concept of block contracting.
3. There is clear support for some consolidation of the market
Some of those supporting the status quo, on the assumption that there would be further cuts in rates, made the point that this would tend to consolidate the market, which might make the low fees more viable. However, of all the options put forward in the survey, the one that attracted the greatest support was to reduce the number of firms by means of increases in quality standards. Some 57.1% supported consolidation by means of higher minimum standards, on the understanding that all those meeting the standards would be entitled to a contract. Only 24.8% disagreed.
4. There are limits to the amount of consolidation that would be supported
There was clear and strong opposition to the move proposed by the previous government in 2010 to contract with a limited number of firms in each area. Over 60% disagreed or strongly disagreed with this proposal.
5. There are mixed views on single fee
Some 44.5% supported the concept of the single fee, under which a firm would be paid the whole fee for both the litigation and the advocacy element of the case, while 31.6% were opposed.
6. There are mixed views on: the concept of clients being asked to pay more/legal aid as a loan
The idea of clients being required to repay legal aid in similar fashion to student loans generated a very mixed response. Some 25.3% agreed, but the same number strongly disagreed. There was no majority on either side of the fence, with 19% neutral on the question and 42 respondents skipping the question, the highest number of non-responses for any of the suggestions.Several respondents proactively raised the use of frozen assets to pay legal fees as a worthwhile reform. Discussions on this are already ongoing between the Law Society and the MoJ.
However, while this would generate some savings, it may well not be sufficient to appease the government in respect of its determination to save as much as possible from the legal aid budget. If the aim is to avert the threat of a disastrous price-tendering scheme, another idea will need to be found.
Let us be clear, whether we stand and fight whatever new incarnation of competitive tendering the government proposes, or whether we try to find a less painful alternative, the future will not be easy. Whatever happens, it is implausible that we will be able to avoid cuts of some kind to the criminal legal aid budget, and whatever emerges at the end, some will be worse affected than others.
The Law Society is committed to trying to find a solution which will result in the fewest number of losers possible. It is our intention that any solicitor who wishes to do so and who meets appropriate quality standards should be able to continue undertaking criminal defence work. However, this may not mean that everyone will be able to do so without changes to the way in which they work.
We need your help in doing this. This is why we are asking that as many of you as possible engage with this process by sending us your ideas and responding to the consultation. Help us to seize this chance for the profession to shape its own destiny, rather than simply being at the mercy of whatever the MoJ decides to inflict on us next.
Alice Mutasa is policy adviser (criminal legal aid) at the Law Society. Richard Miller is head of legal aid at the Law Society
Strengthening trade links
- (1) ‘The main conclusion of this further analysis is that an important group of suppliers who are key to fulfilling the LSC’s statutory obligations in providing a criminal defence service is at risk.’ Otterburn Legal Consulting: ‘The Law Society and Ministry of Justice Impact of the MoJ Green Paper proposals on legal aid firms – further analysis for the Ministry of Justice’ (10 March 2011).
- (2) There were 220 responses in total to the survey, although not all the questions were answered by each respondent.