The Legal Services Commission’s ‘unlawful’ family tender cost around £1m, its legal director told the House of Commons justice committee last week.
The LSC also came under fire from MPs over senior executives’ pay, after its recently published accounts showed that former chief executive Carolyn Regan (pictured) was paid more than £306,000 in 2009/10, while the current chief executive earns ‘20% more than the prime minister’.
Giving evidence to the parliamentary committee last week, LSC legal director Ruth Wayte said the tender process cost in the region of £1m, with an additional £600,000 spent on e-tendering software. The LSC will have to conduct a re-run of the process after it was ruled ‘unlawful’ by the High Court in a judicial review brought by the Law Society.
LSC chief executive Carolyn Downs said the commission has now entered into a mediation process with the Law Society to rebuild the ‘adversarial and litigious’ relationship between the two bodies.
Following the publication of the LSC’s accounts last week – which the National Audit Office refused to approve because it estimated that the commission had overpaid solicitors by £77m – Conservative MP Claire Perry quizzed Downs on the LSC’s spending, and the salaries paid to its executive team.
The commission’s annual report showed that five members of the team were paid a total of more than £750,000 in the 2009/10 financial year. Former chief executive Carolyn Regan received £306,800, including a payment of six months’ salary in lieu of notice, to which she was contractually entitled following her resignation in March when the government announced that the LSC was to become an executive agency of the Ministry of Justice. She was paid £23,000 as a performance bonus during the year.
The current chief executive, Carolyn Downs, earns £169,000 a year, while Hugh Barratt, the LSC’s executive director for commissioning, receives a salary of £140,000.
Perry questioned why Downs should be paid ‘20% more than the prime minister’.
Commenting on the state of the LSC’s finances, Perry said: ‘Frankly this is an enormous financial bonfire that needs to be reined in.’
Downs did not comment on the salaries, but said the LSC aimed to save £25m in the three years of the spending review period, with £8m in savings expected when the LSC becomes an executive agency of the MoJ.
She said the commission was beginning negotiations over senior management reductions and an offer of redundancy packages for other staff had just closed.