Cash-strapped legal aid firms are paying out of their own pockets the 10p difference between the Legal Aid Agency and HM Revenue & Customs’ mileage rates, a practitioner group has revealed.

In feedback to the LAA’s latest annual review of travel and subsistence allowances, the Legal Aid Practitioners Group said HMRC increased its mileage rate to 55p for the first 10,000 business miles earlier this year after the chancellor acknowledged that rates have failed to keep pace with evolving motoring costs. However, the LAA’s rate has remained at 45p.

LAPG said: ‘Firms are rightfully paying their staff the fair, HMRC-approved rate of 55p per mile because it is reasonable and staff expect it, yet they can only recover 45p from the Legal Aid Agency. Providers are consequently forced to take on this financial shortfall directly. For firms whose staff travel extensively to courts, tribunals, and prisons, these losses can be significant. This has to be set against the fact that legal aid rates across the board are extremely low. Any additional costs are a significant disincentive to continuing with legal aid work.’

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The difference in mileage rates has also created extra unpaid bureaucracy, LAPG said. 'Mileage claims are already incredibly detailed, requiring start and end postcodes, exact distances and travel times. For fee-earners attending courts, tribunals, prisons etc the time taken to complete these forms is significant (and unremunerated) and under the current guidance this process must be performed twice.

'Claims must be recorded once at the 45p rate for Legal Aid Agency billing purposes, and a second time at the 55p rate for the firm’s internal accounting and staff reimbursement. If the Legal Aid Agency maintains the 45p rate, this duplication of effort will become a further burden on firms that conduct high-volume travel.'

On hotel accommodation, LAPG said court listings are often not confirmed until the night before and rates need to accommodate dynamic pricing. A £25 allowance for dinner and breakfast 'fails to cover the basic cost of an evening meal and breakfast in London or major regional cities', the practitioner group added.