LSC told to axe firms for excessive billing

A 'significant minority' of civil legal aid firms should quickly be axed from the contracting regime, the National Audit Office (NAO) said this week, amid concerns that more than a third are regularly over-billing in excess of 20%.

The NAO's study into Community Legal Service (CLS) expenditure found that the worst 35% of firms which submitted files to auditors for help and advice work on average claimed 24% more than they should have done.

Reasons for downward assessment included claiming for ineligible work or carrying out work uneconomically, although the NAO noted that, in many cases, firms disagreed with the auditors' assessments and called for more standardisation in the process.

The report said there had been improvements in firms' performance, but urged the Legal Services Commission (LSC) to cull rapidly those that ignored warnings about over-billing.

'A significant minority of suppliers have not improved,' it said.

'The LSC told us it intends to remove suppliers who persistently over claim on controlled work but the removal process is long, taking a minimum of around 18 months.'

NAO head Sir John Bourn welcomed the attempts to rein in expenditure.

'However, I urge the LSC to clamp down faster on suppliers that over-claim,' he added.

'The LSC needs to look closely at the current pattern of service provision to ensure that, wherever possible, gaps are addressed.'

The report also highlighted a drop in the number of suppliers in some fields, with family law contract holders in particular decreasing by 735 in two years.

Rural areas have been especially hard hit by a lack of suppliers, it added.

The Legal Aid Practitioners Group said the profession had lost confidence in the audit process because it was 'riddled with errors', and firms were dropping publicly funded work because it took too much time and money to appeal decisions.

Chairman David Emmerson branded the report 'misleading and inaccurate' because it did not detail the results of representations and appeals.

'The vast majority of firms that have challenged the findings have had the results revised in their favour,' he said.

'The quoted figures represent a substantial overstatement of the sums assessed in the audit process.'

Legal Action Group director Karen McKay called for a wider study into how the CLS is serving the consumer, focusing on quality of work, matching supply with need and addressing gaps in the service.

The Public Accounts Committee (PAC) will look next month at whether the NAO recommendations should be adopted.

An LSC spokesman said: 'We generally welcome the NAO findings of improved control and targeting.

Any proposals on terminating contracts or better cost or quality grounds will be made after the PAC hearing.'

Paula Rohan