Legal aid spending in Scotland fell by 8.3%, or £11.3m, in 2017-18, according to the annual report of the Scottish Legal Aid Board published today.

The total cost to the taxpayer of legal assistance in 2017-18 was £124.4m, down from £135.7m in the previous year.

The fall matches the decline in criminal legal aid spending, which was down from £85.4m in 2016-17 to £74.1m in 2017-18. Summary criminal legal aid spending was down by £2.2m to £27.17m, while spending on solemn cases fell by more than £7.6m to £29.82m, and ABWOR (advice by way of representation) dropped by £1m to £12.09m. Appeals, duty scheme and PDSO costs were all slightly down.

On the civil side, total net spending was almost unchanged, at £44.54m compared with £44.73m the previous year. But the report comments that "excluding adults with incapacity (AWI) we continue to see the volumes falling. AWI certificates growth means that in 2017-18 they represented 35% of all civil certificates. Excluding AWI we see a very different picture whereby certificates in 2017-18 were 6% lower than in 2016-17, [and] 37% lower than 2009-10 when volumes peaked". As AWI is relatively inexpensive compared with other forms of legal aid, in 2017-18 the overall average case cost for civil legal aid was 5% lower than in 2016-17.

There were nearly 8,000 fewer applications received for criminal legal assistance last year compared with the previous 12 months. In the report SLAB observes that this "reflects a very significant and long term fall in reported crime and the increasing availability and use of alternatives to court prosecution", rather than reduced funding or the level of fees.

Commenting on the implications for solicitors, the report continues: "We note that the scale of the changes we are observing in the criminal justice system do not appear to have resulted in significant changes in the size or structure of the supply base. In other words, we see similar numbers of solicitors, structured in broadly the same way (predominantly in very small firms) handling substantially reduced business volumes. As a result, per firm earnings from legal aid have reduced significantly, with this reduction affecting both large and small firms.

"It is likely that many firms will have tried to reduce costs in order to maintain profitability in the face of such large reductions in income. However, our understanding of the cost base of the large number of very small firms suggests that there will be increasingly few options for cost reduction. We are therefore concerned that, without some more significant shifts within the market, some practices that are financially dependent on criminal legal assistance may start to struggle. If the impact of this challenge is spread across the whole market, and the market does not adapt to enable it to face the challenge, there may be a risk to future provision."

It urges firms "to consider and plan for their future in an environment of lower business volumes and lower overall expenditure".

Fee increases, it states, may help stem falling incomes for criminal legal aid practitioners, but should not be seen as the only response to the financial challenges facing many solicitors.

The Scottish Government recently announced an accross-the-board rise of 3% from next April, as an interim measure pending the setting up of a new "evidence based" process to keep fees under review, in its response to the report of the independent review of legal aid under Martyn Evans.

A package of future reforms to the legal aid system will also be considered and consulted on.

Welcoming these announcements, SLAB chief executive Colin Lancaster said that they "should be seen against sustained shifts in the criminal justice system which had led to a continued significant reduction in spending". Even with fee increases, falling cases numbers would continue to impact on firms’ incomes.

On the controversy surrounding the new rights to advice for people held at police stations, which led to a number of bar associations withdrawing from the police station duty scheme on the ground that it would impose excessive demands for inadequate fees, SLAB records that a new package was put in place and reports that private sector solicitors are participating in 31 of the 40 duty plans across the country, and its own solicitors from the Public Defence Solicitors’ Office and Solicitor Contact Line "stepped up to this challenge to ensure that the new rights of those in police custody would be practical and effective in those areas without duty solicitors".

Mr Lancaster said he recognised that some solicitors might take a diminution in their own financial position as some sort of reflection on the value accorded to the work they do.

“Understandable though this may be, it is absolutely not the case. The profession plays a crucial role in assisting those in need, ensuring the smooth operation of the criminal justice system and upholding the rule of law.”

Along with the report, SLAB has published details of fees paid to individual solicitor firms and advocates in 2017-18.

Click here to access all the documents.