Four out of ten legal aid firms are prepared to take on more publicly funded work even if rates of pay remain frozen, government-commissioned research has suggested - fuelling concerns among practitioners that there is now no hope for future rates rises.

The report by Frontier Economics, based on a survey of more than 300 firms, showed that 16% would be willing to take on more legal aid cases at current rates and could already do so.

A further 24% would do the same if they hired more staff or expanded their premises.

The report argued that, given firms' capacity and willingness to take on extra work, 'it is likely that a relatively small increase in demand such as that forecast can be accommodated by existing suppliers with no change required to existing remuneration rates'.

It also suggested that one way of dealing with the legal aid budget could be through suppliers putting their cards on the table about the pay they will accept and the service they are prepared to offer.

'[A new system] could involve competition for individual cases, sets of cases or for contracts,' it added.

But Legal Aid Practitioners Group director Richard Miller slated the report's conclusions, saying they were based on 'inadequate data' and a 'poor understanding' of the issues, particularly in relation to remuneration.

'This is a devastating and wholly inaccurate conclusion which threatens to take away the last vestiges of hope from those who have been hanging on in the hope of common sense prevailing,' he warned.

Law Society chief executive Janet Paraskeva said the findings flew in the face of its own research, which suggested legal aid was increasingly unpopular.

'A diminishing future supply of solicitors must not escalate to the point where the system becomes unviable,' she argued.

The report also appeared to contradict the view taken in a separate evaluation of the Community Legal Service (CLS) by consultants Matrix, which suggested that a reduction in the number of contracted firms was causing serious problems.

'[The] evidence from the review and elsewhere suggests that resources are the key factor,' it argued.

Matrix also concluded that CLS Partnerships are failing, as they have been unable 'to access any significant new funding'.

But legal aid minister David Lammy, giving evidence to the constitutional affairs select committee this week, said there would be no new money for legal aid, although he announced rates increases for family law barristers and housing solicitor-advocates.

The government also announced this week a review of the very high cost criminal case scheme.

By Paula Rohan

See Editorial, page 14