Imposing austerity through nationalisation

Richard Garside
Monday, 6 July 2015

Faced with a barristers' boycott last year in a dispute over legal aid fees, the then Justice Secretary, Chris Grayling, underwent what appeared to be an unlikely political conversion.

A pro-free market Conservative in the middle of a highly controversial privatisation of the public sector probation service, Mr Grayling decided that, when it came to legal aid work, the public sector had much to offer.

You can read more about the dispute in the fourth volume of UK Justice Policy Review. In essence, it revolved around the fees paid to barristers to represent defendants in so called 'Very High Cost Cases'.

The Ministry of Justice wanted to cut their fees. The barristers said they couldn't represent clients on the fees being offered and boycotted cases. Mr Grayling's response was to announce the expansion of the Public Defender Service (PDS) - in essence, public sector laywers - to undertake the work the self-employed bar refused to do.

Critics argued that this made a nonsense of the cuts: PDS lawyers typically cost more than self-employed lawyers, they claimed. They also argued that it sat uncomfortably with a government supposedly committed to privatisation and rolling back the frontiers of the state. As Jenny McCartney observed in a post on the Telegraph website:

Mr Grayling is seemingly now bent upon nationalising the criminal bar at greater cost to the taxpayer. This is a curious position for a Conservative minister to find himself in.

Fast forward a year and the new Justice Secretary, Michael Gove, faces a growing revolt by solicitors and barristers over legal aid cuts. According to The Law Society Gazette the Ministry of Justice is again using PDS lawyers to pick up cases.

In a world where privatisation and austerity so commonly go hand-in-hand, the thought that ministers might turn to the public sector to 'discipline' the private sector may seem odd. But playing off public and private sector interests can prove an effective tactic for ministers intent on cutting budgets.

A couple of years ago the Ministry of Justice's attempt to privatise a slew of prisons was something of a flop. Of the nine prisons put out to competition, eight were under public sector management. One was managed by the private sector. After a process that lasted over two years the position was unchanged: one prison under private sector control and eight prisons under the public sector. This time-consuming and costly exercise found that the private sector could not always offer the cost-reductions the Ministry was looking for.

In place of privatisation came 'benchmarking', a public sector-driven exercise that, in the future, will create fresh opportunities to privatise. As I explained in the The coalition years, the Centre's review of the coalition government's criminal justice policies:

benchmarking public sector prison costs against the lowest costs prevailing in the private prison sector has introduced new competitive pressures into public sector prisons that, in the longer-term, have the potential to create new market opportunities.

The game of poker the Ministry is currently engaged in with the legal profession is difficult to predict. Resisting further cuts to legal aid fees has become an important matter of principle for legal aid lawyers. But the threat to their livelihoods by an growing PDS is something of an existential threat.

The resort to PDS is more than a mere pragmatic move to keep the courts moving. The implied threat that a growing PDS represents to private firms and self-employed barristers is a canny move by ministers intent on imposing their vision of a restructured legal aid market.