The government is considering fresh legal aid cuts because Kenneth Clarke's politically maladroit remarks about rape sentencing have jeopardised its bid to save money by cutting the prison population, it has been suggested to the Gazette.

This was the news allegedly revealed at controversial meetings held in Sheffield and London between the Legal Services Commission and some of the bigger legal aid firms.

The Law Society’s chief executive Des Hudson has written to the Justice Secretary Kenneth Clarke and LSC chief executive Carolyn Downs, raising concerns over the propriety of the meetings and seeking clarification of the government’s plans.

As part of its strategy to save money by reducing the prison population, the government had proposed a 50% sentence reduction for defendants who entered a guilty plea at the earliest opportunity.

Sources told the Gazette that Downs told those at the meetings that, following the furore over Clarke’s remarks last week about rape, the government was reviewing this money-saving policy.

If, as a result, it was unable to implement the change as planned, it would be looking to make increased savings elsewhere - including from the £2.1 billion legal aid budget, which government already wants to cut by £350 million a year.

However, LSC sources suggest that this knock-on effect of Clarke’s gaffe was not something Downs told the meetings. Rather it came from speculation in leading questions put to the LSC Chief Executive by providers, on which Downs had in fact refused to commit herself.

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At the meetings, Downs also said that the government’s plans for the introduction of best value tendering had been delayed, and shared information about the LSC¹s future approach to family tendering, according to Gazette sources.

In the letter to Clarke, Hudson sought clarification of the prisons policy and assurance that the legal budget will not be further reduced.

He said: ‘We understand that reference was made at the meeting to the fact that due to the government’s review of policy on prisons which will not deliver the expected savings, options for obtaining the savings required from the Ministry of Justice budget are being reconsidered.’

‘We look forward to your assurance that no further cuts to legal aid will be proposed, and we urge you once again to consider seriously our proposals for alternative costs savings,’ he said.

Hudson also expressed concern regarding the meetings that took place for a selected number of large firms that take more than £2m a year from the legal aid fund.

The meetings could give the firms that attended an unfair commercial advantage over those not invited.

The first meeting took place in Sheffield last Friday (20 May) and the second was held in London on 25 May.

The LSC invited the Law Society to the London meeting at 7pm on 24 May after it had been informed that the Gazette was running a story on the meetings.

The Law Society declined to attend, because it had been told that Downs had requested those who attended the Sheffield meeting to keep the information they received confidential.

Hudson said: ‘We could not risk being placed in that position which would have compromised our ability to represent all our members without fear or favour.’

Downs is understood to have made the same request for confidentiality at the London meeting, despite giving assurances to the Law Society and other representative groups that it would publish full notes of the meetings on its website.

In his letter to Clarke, Hudson said: ‘We are especially concerned about the apparent impropriety of a public body giving information that is of importance to all firms undertaking legal aid work, and that is not publicly available, to selected providers on a confidential basis.

‘There is serious risk that this amounts to a breach of the LSC’s obligation to treat all its suppliers fairly and equally, and has the potential to render future contract tender processes unlawful by reason of having given some tenderers an unfair advantage.’

Hudson expressed the same concerns in his letter to Downs: ‘It must be thought that the LSC is potentially leaving itself vulnerable to future legal challenge by firms wishing to tender for legal aid contracts, who may allege that other firms have been given an unfair advantage, by being provided with information well in advance of the tender, and ahead of other firms participating in the process.’

He added: ‘The express exclusion of small providers from these meetings could also constitute indirect discrimination against [black and ethnic minority] suppliers, given the disproportionate number of BME firms among the smaller providers.’

A Ministry of Justice spokesperson said: ‘Our proposals to reform legal aid, sentencing and rehabilitation have been in the public domain since last year, and the consultation periods have now closed.

'We are finalising our proposals and plan to publish our formal responses shortly. At this stage assumptions about what they may contain are purely speculation.’

A Legal Services Commission spokesman said: ‘The LSC did not organise the recent meetings of large firms in Sheffield and London, but our chief executive Carolyn Downs was invited to speak at them, as LSC has done in previous years.

'Carolyn agreed to do so as part of our commitment to dialogue with legal aid providers on operational issues.

‘As Carolyn emphasised at both meetings, decisions on policy are entirely a matter for the Ministry of Justice.’