Solicitors reacted with dismay last week to further planned cuts in the £2bn annual legal aid budget outlined in chancellor Alistair Darling’s Pre-Budget Report.

The chancellor included plans by 2012/13 to make ‘£360m of savings in the criminal justice system by improving case management, putting underperforming or expensive public sector prisons out to competition during 2010/11, and reforming legal aid’.

Precisely how much will be cut from the legal aid budget was not specified. What is also unclear is how from 2011 individual departmental budgets will be affected by the chancellor’s pledge to ringfence some areas of spending, including spending on the NHS and schools.

The announcement prompted the Law Society to warn that further cuts will push an already impoverished criminal justice system ‘to breaking point’.

Chief executive Des Hudson said: ‘The Society agrees that savings in the criminal justice system through looking at better case management by all parties would be welcome, providing there are appropriate safeguards, but the criminal legal aid budget should not face yet another onslaught of generalised cuts.

‘The government has been slicing away at the legal aid budget for some time and the impact is now being felt. Barely a week ago a National Audit Office (NAO) report pointed out that more than a quarter of solicitors providing criminal legal aid services were ready to walk away from it and many made no profit at all under the system. Further cuts will give them no choice but to abandon legal aid. This means vulnerable people who come into contact with the criminal justice system will be denied advice and representation.’

Carol Storer, director of the Legal Aid Practitioners Group, said: ‘You can’t keep making cuts and expect practitioners to keep working longer and longer hours to deliver a quality service when their fees don’t cover their overheads.’

Giving evidence to the Public Accounts Committee last week, Legal Services Commission chief executive Carolyn Regan said she had not been consulted by the chancellor on what the cuts would mean for the legal aid budget.

Questioned by the committee on the recent NAO report criticising the administration of the LSC, Peter Handcock, Ministry of Justice director general for access to justice, said the system was in the middle of a period of radical change, but the MoJ had ‘a grip’ on legal aid spending. He said the reforms instigated had frozen the budget at the 2006 level and increased the level of help the public received.

He said it was ‘completely unacceptable’ that the LSC’s accounts had been qualified due to overpayments to solicitors, adding that this was caused by an insufficiently robust audit process. Handcock said the balance between minimising bureaucracy and managing risk had been incorrect.

Regan said the situation was ‘regrettable’ but immediate steps had been taken to increase financial control.