Sir Ian Magee’s review of the delivery and governance of legal aid, commissioned by the Ministry of Justice and published last week, was the third report in the space of 12 months to criticise financial controls at the Legal Services Commission. It followed the qualification of the LSC’s accounts for 2008/09 by the National Audit Office in October, and a damning report by the House of Commons’ Public Accounts Committee in February.

Magee, a former senior civil servant, carried out a wide-ranging consultation, speaking to parties who contribute to, and are affected by, the current arrangements. He found that the LSC has undergone far-reaching change and reform since its creation 10 years ago, with shifts in policy, personnel and focus, and said its role had developed ‘piecemeal’.

Magee said this had lead to confusion within the supplier base as to who was ‘calling the shots’ over policy, which could be inhibiting the effective ­delivery of ministers’ policy intentions. He concluded that there was ‘too much that requires fixing to leave things as they are’, and recommended that the LSC be transformed from an arms-length, non-departmental body into an executive agency of the MoJ.

This change, which the MoJ has accepted, will mean the LSC is brought closer into the body of the ministry in the same way as, for example, the Courts Service. This will give the ­government greater control over its finances, which Magee found so lacking.

The Law Society, Bar Council and other practitioner groups have broadly supported the change, and welcome the fact that the review recognised the problems caused to the professions by the lack of coherence over policy making. Law Society president Robert Heslett says he hopes this will lead to ‘sharper focus and a reduction in the number of new initiatives’.

Roy Morgan, director of the Legal Aid Practitioners Group, said the change will cut the bureaucracy and administration costs associated with the LSC and reduce the number of ­consultations. But he is ­concerned about the loss of independence from government and the impact this might have on funding decisions.

Morgan questions whether it is possible to guard against ministerial interference. ‘For example, if you get growth in a particular type of case, the MoJ could decide to take it out of scope for budgetary reasons,’ he warns.

‘The LSC has been a bit of a buffer, and over the years it has fought against the government over the funding of some cases.’

The danger that political expediency might influence funding decisions or the scope of legal aid is also a concern of Young Legal Aid Lawyers (YLAL), the Legal Action Group (LAG) and Andrew Caplen, chair of the Law Society’s access to justice committee.

Caplen moots the creation of an independent body to decide scope, eligibility and payment rates to counter the risk of ­government meddling, while LAG director Steve Hynes ­suggests an independent appeals system.

YLAL chair Laura Janes is unequivocal; she stresses that the government must have no veto over the funding of cases against it. She wants ministers to ensure that the interest of justice is the primary consideration for policy decisions, and that funding decisions are ­subject to independent judicial scrutiny. ‘Anything short of this will be unacceptable,’ she adds.

Law Society chief executive Des Hudson agrees that the lack of independence is a ­‘legitimate concern’, but is satisfied that the MoJ and Magee have recognised that. He says there is a need to ensure that the legislation introduced to constitute the new agency ‘enshrines’ independence of decision making.

By contrast Rodney Warren, director of the Criminal Law Solicitors Association, who had called for the LSC to be scrapped, says he has ‘no more concern about independence than I do about the Courts Service being able to conduct a service that holds courts’.

He says he is more concerned over what shape the new agency will take, and how it will behave towards and respond to the profession. ‘I hope that whatever steps are taken are done after a full and detailed understanding of the landscape [the MoJ] expects to see, to ensure an adequate service to the public, rather than merely [reflecting] a doctrinaire belief in the market,’ he adds.

Like most others, Warren does not expect the structural change to herald any overhaul of legal aid policy. ‘For a long time the MoJ has had a firm view on policy and I wouldn’t expect them to do anything other than continue down the same path,’ he predicts.

Magee made further recommendations, including a proposal to ‘devolve’ the budget for social welfare cases, which would be administered separately by a not-for-profit body, in a bid to prevent the civil budget being eroded by criminal legal aid. This plan found favour with the Law Society and LAG.

The MoJ has already assumed tighter control of the LSC following chief executive Carolyn Regan’s resignation last week and her replacement by senior civil servant Carolyn Downs. However, the main changes will require primary legislation before they can be implemented, which will delay them until after the ­election.

It seems the proposals will not be derailed by any change of government, however. Shadow justice minister Henry Bellingham said this week that the Conservative Party supports Magee’s plans to make the commission an executive agency. Given the prospect of gaining tighter control of the £2.1bn legal aid budget, it is not a question of if the next ­government will put the review’s recommendations into action, but how soon.