4. Collecting debts and reducing administrative
costs
22. At the end of March 2002, the Commission was
owed almost £371 million from three main sources: clients
required to make contributions to legal costs; court orders awarding
costs to the Commission; and statutory charges on the property
of funded clients. During the year, debts totalling £20 million
were written off, comprising £11.7 million irrecoverable
costs and £8.2 million contributions from funded clients.
Once an initial request for payment has not been met outstanding
amounts are referred to the Commission's Debt Recovery Unit. The
Unit recovers one pound for every three pence it spends.[22]
23. Statutory charges comprise the major part of
the Commission's debtors (£254 million in 2002). Usually
arising from marital cases, these debts are secured by a charge
on the property of a client with the legal aid costs recovered
when the property is sold. The Commission said that these charges
were usually recouped, but recovery could take many years (Figure
3). The matrimonial home is often the only significant asset
and a statutory charge secures repayment of the debt. Debts can
be repaid voluntarily if the financial circumstances of the debtor
change, but the Commission agreed that there was no obligation
on people to pay more quickly in such circumstances.[23]
Figure 3: Analysis as at 31 March 2002 of the
length of time that statutory charges have been in place
24. In 2001-02, the Commission spent £71.7 million
on administrative costs, of which around £60.4 million was
attributable to the Community Legal Service. The Department had
set objectives and targets for the Commission, and the Commission's
systems had been benchmarked against those of other bodies. On
whether administrative costs could be reduced, for example by
relying less on audit and more on information technology systems
to monitor suppliers, the Commission planned to bring together
administrative systems for monitoring cost and quality to provide
a more rounded assessment of supplier performance. On why 1000
staff were needed to manage 5000 providers of legal advice and
representation, the Commission was currently running two systems
of legal aid as cases still existed under the previous scheme.
It had set up and managed telephone advice lines and specialist
support services, and was also managing criminal defence service
contracts and public defender services.[24]
22 Qq 65, 67; C&AG's Report, para 2.28 Back
23
Qq 44-50; C&AG's Report, para 2.29 Back
24
Qq 207-208, 213-214, 216; C&AG's Report, para 1.19
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