AN INVITATION TO DEBATELord Mackay duly took the place warmed for him by the Social Market Foundation and last week announced the end of a demand-led civil legal aid scheme.

He sweetened the pill by rejecting the concept of 'fundholders for justice'.The intended demise of demand-led legal aid came as no surprise since it had been widely leaked.

Neither did Lord Mackay's acceptance of the analysis obligingly disseminated by the authors of the foundation's pamphlet, all three of whom are also advising him.

Legal aid is out of control: its soaring cost is solely due to 'supplier-induced inflation': cap the budget and contract out more services to bulk suppliers.

This argument remains as simplistic as ever.

Legal aid costs have, in fact, stabilised.

This year, as last, there is likely to be an underspend on estimate.

Total cost is manifestly affected by a number of other 'cost drivers'.

One of them is government policy which has led to rapidly increased legal aid expenditure in areas as diverse as the 24-hour duty solicitor scheme, education cases and children's law.Lord Mackay's main priority is clearly to provide his share of the sacrificial lamb to the altar of the government's fundamental review of expenditure.

If you accept the legitimacy of that goal, as he must but we need not, his approach is not actually as vicious as it might have been.

Hence, the Lord Chancellor is to be commended for accepting that crime should not be cash limited and for resiling from some of his more gung-ho previous pronouncements on compulsory competitive tendering.Lord Mackay has to keep some powder back for the launch of his green paper.

This speech is, therefore, somewhat lacking in detail: for instance, he says nothing about the future of divorce work.

For that we must wait until April or May.

In consequence, it is difficult to know how worried we should be about the suggestion that all litigants might have to pay a contribution or even repay their whole costs as a loan even if they lose.Franchising is to be extended among solicitors and the advice sector, though Lord Mackay is still intriguingly shy of saying he will bring barristers into the net.

If you are wondering whether to apply for a franchise then this speech provides the indication that you should do so soon.

Ultimately, only franchisees will remain in the le gal aid network.This glimpse of the Lord Chancellor's thinking suggests that there are four issues around which legal aid practitioners should rally.

First and foremost, the needs of clients require as much attention as the demands of the Treasury.

Secondly, the legal aid budget must remain flexible enough to respond to changing demand.

Thirdly, it is clear that much is being left to detail as yet unworked out.

This must trigger informed debate.

Finally, discussion on the green paper must be linked to the illogically separate review being undertaken by Lord Woolf on civil adjudication.One of Lord Mackay's virtues is his willingness to encourage open and wide-ranging debate.

The future of legal aid certainly needs that now.COURAGE TO MAKE CHANGEIt has been apparent for some time that legal aid is in a cul-de-sac.

No one can therefore be surprised at the debate that is now taking place about its future.

A contribution was made this week by the Lord Chancellor at a seminar organised by the Social Market Foundation.

A green paper is promised by the early summer.

The profession has until then to come up with radical proposals of its own if the initiative is not to be wrested from it.The days when any single body possesses the only solution to complex problems have gone.

Government is no exception to that rule.

Lawyers are in a position, if they so choose, to create new ideas, to think them through and to participate in implementing them.At the seminar much discussion took place about the ideas proposed, much of it critical.

'The devil is in the detail,' said Roger Smith of the Legal Action Group and, of course, he is right.

The difficulty is that it is not practicable to put forward ideas on the basis of a detailed framework.

People have to have the confidence to voice new concepts on the basis that they will be fairly considered, examined critically and either discarded or worked up.

It is not practical to expect every new idea to be accompanied with a fully worked out 'business plan' to establish its viability.Cash limits are ugly words and no one likes them.

I am instinctively against cash limits because legal aid has always been a demand-led matter.

But what we have now is limits in a different form.

Reduced eligibility is a type of cash limit.

Less pay for lawyers is a form of cash limit and reducing the scope of legal aid is a particularly unattractive form of cash limit given increasing need.

Any constructive debate therefore has to accept some form of limitation upon government expenditure in this field.

This will be the case no matter which party forms the government.

What we lawyers have to imagine is how, from the perspective of the clients' needs, we would most like to see this happen.In essence, the issue is how much advice can be delivered to how many people at a cost that the country can afford.

That inevitably means some prioritisation of need.

Up to now need has not driven the argument but rather reaction to events.In any radical reform it is possible to build a more acceptable system particularly if it is preceded by research.

There are those who say that the Lord Chancellor's Department has not done that research nor is it available.

I do not believe that to be the case although research can always be improved upon.

What is essential, however, is that any scheme that is implemented is one that involves the profession and has its whole-hearted consent.

Consent given the realistic knowledge that it has to accept limitation of one kind or another.

It is the scope of those limitations and they way in which they bite upon individuals that are the issues now before us.The profession has the wherewithal to deliver on these issues more than any other part of society.

Have we, however, the imagination, the leadership and the courage to meet this challenge? Only time will give this answer, but the one answer we cannot give is to say that is has always been done this way and so it will always be.