Corporate report

Annual Report and Accounts 2023-24: Accountability Report (HTML)

Published 25 July 2024

Applies to England and Wales

Accountability Report

Corporate governance report

Introduction

The LAA Framework Document sets out the arrangements for governance, accountability, financing, staffing and operations. This was revised to align to current Cabinet Office standards in 2023-24 and the new version can be viewed in full at: www.gov.uk/government/organisations/legal-aid-agency/about/our-governance

As Chief Executive and Accounting Officer for the LAA, I am responsible for the LAA’s use of resources in carrying out its functions as set out in the LAA Framework Document. Managing Public Money as issued by HM Treasury also sets out the responsibilities of an Accounting Officer.

As Accounting Officer, I am personally responsible for safeguarding the public funds for which I have charge, for ensuring propriety and regularity in the handling of public funds and for day‑to‑day operations and management of the LAA. In addition, I must ensure that the LAA as a whole is run in accordance with standards in terms of governance, decision-making and financial management.

My report outlines the governance arrangements in place to manage risks to the achievement of the LAA’s agreed objectives and targets and to provide effective oversight and control over its resources and assets. It includes:

• Directors’ report
• Statement of the Accounting Officer’s responsibilities
• Governance statement

Directors’ report

The composition of the LAA Board, the Audit and Risk Assurance Committee (ARAC) and the ELT are detailed on pages 45-48. Together they are responsible for setting the LAA’s strategic direction and monitoring performance against agreed objectives.

Statement of directors’ interests

Non-Executive Board Members (NEBM) conflicts of interest are considered as part of the appointment process and members are required to declare any directorships and conflicts of interest on appointment. Declarations of interest are requested before all meetings of board members. All board members are also required to declare any previously undisclosed conflicts of interest. There have been no conflicts of interest identified during 2023-24.

Personal data incidents

Consideration was given to whether any incident involving personal data was so serious it should be reported to the Information Commissioner’s Office (ICO). In 2023‑24 no breaches were considered to meet the criteria and were reported to the ICO.

The governance statement on pages 42-44 considers further information assurance and data security practices in the LAA.

Statement of Accounting Officer’s responsibilities

Under the Government Resources and Accounts Act 2000, HM Treasury has directed the LAA to prepare for each financial year a statement of accounts in the form and on the basis set out in the Accounts Direction. The accounts are prepared on an accruals basis and must give a true and fair view of the state of affairs of the LAA and of its income and expenditure, Statement of Financial Position and cash flows for the financial year. In preparing the accounts, the Accounting Officer is required to comply with the requirements of the Government Financial Reporting Manual (FReM) and in particular to:

• observe the Accounts Direction issued by HM Treasury, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis;
• make judgements and estimates on a reasonable basis
• state whether applicable accounting standards as set out in the FReM have been followed, and disclose and explain any material departures in the accounts
• prepare the accounts on a going concern basis
• confirm that the Annual Report and Accounts as a whole is fair, balanced and understandable and take personal responsibility for the Annual Report and Accounts and the judgements required for determining that it is fair, balanced and understandable

The Principal Accounting Officer of the MOJ has designated the Chief Executive as Accounting Officer of the LAA. The responsibilities of an Accounting Officer, including responsibility for the propriety and regularity of the public finances for which the Accounting Officer is answerable, for keeping proper records and for safeguarding the LAA’s assets, are set out in Managing Public Money published by HM Treasury.

As the Accounting Officer, I have taken all the steps that I ought to have taken to make myself aware of any relevant audit information and to establish that the LAA’s auditors are aware of that information. So far as I am aware, there is no relevant audit information of which the auditors are unaware.

Governance statement

Introduction

This statement is my fourth, as both the Accounting Officer and Chief Executive for the LAA. I remain responsible for maintaining a robust system of internal control that supports the successful delivery of the LAA’s policies, aims and objectives, while safeguarding public funds and departmental assets. This is in accordance with the responsibilities assigned to me in HM Treasury’s publication Managing Public Money. As Accounting Officer, I have taken all appropriate steps to make myself aware of any relevant audit information and to establish that the National Audit Office (NAO) are aware of that information. To the best of my knowledge there is no relevant audit information of which the auditors are unaware. Additionally, I continue to perform the role of Director of Legal Aid Casework (DLAC), which is designated to me by the Lord Chancellor. I undertake the DLAC role in practice by delegating decision-making to LAA caseworkers and providers. As DLAC, I am supported by the LAA’s Board in ensuring that robust practices are in place to maintain an independent decision-making process for granting legal aid. My DLAC Annual Report provides a summary.

Relationship with Parliament

The LAA is subject to scrutiny from Parliament. This includes the Public Accounts Committee, the Justice Select Committee and the Parliamentary and Health Service Ombudsman (PHSO). The MOJ, and the LAA as an integral part of the department, have continued to work across the justice system to share best practice and identify and implement efficiencies that improve the service we provide to our users. On 25 March 2024 the value for money from Legal Aid was scrutinised by the Public Accounts Committee. The Committee published a report on 24 May 2024.

Parliamentary and Health Service Ombudsman

The LAA has in place a two-tier complaints procedure providing a process for complaints to be reviewed objectively before a complainant decides whether to refer their matter to the PHSO through their local MP. Where suitable the LAA will engage directly with the PHSO liaison officer to:

• discuss progress on individual cases
• provide updates on changes: for example, policy changes and potential impacts for the PHSO
• ensure two-way sharing of best practice and constructive feedback
• deliver training to PHSO staff on various LAA topics and issues

The LAA has regular meetings with an MOJ-wide complaints forum as the themes and working relationships are similar. This provides an opportunity to work collaboratively to continually improve the complaints handling service. During 2023-24, the LAA was notified of 11 referrals to the PHSO, which is consistent with the volume received in 2022-23.

Of the referrals, zero cases were accepted for a formal investigation. The PHSO discontinued six of the 11 complaint referrals at the pre-investigation stage. Formal outcomes are pending in respect of the remaining five cases. On conclusion of an investigation the LAA takes any necessary action to carry out the recommendations made by the PHSO. This can inform changes to processes and ways of working, which will have a positive impact on the provision of public services in the future.

Governance framework

The governance structure reflects the principles of HM Treasury best practice guide ‘Corporate Governance in Central Government Departments: Code of Good Practice’, to the extent it applies to an executive agency. The governance structure has continued to work effectively and as intended, providing strong support to me as Accounting Officer and the wider ELT in discharging our responsibilities. I have introduced improvements to better integrate digital-related activity into the LAA governance structure by bringing these closer to the LAA Board and ELT. In summer 2024, the Joint Prioritisation Board moved to become one of the ELT committees and was renamed as Transformation and Change Committee.

Governance structure

Committee membership and attendance

This table details board members and standing invitees who have responsibility for the LAA throughout 2023-24, their role and their attendance at ELT and ARAC meetings.

Name and role	Sex	LAA Board	ELT	ARAC
Board members
Chief Executive, LAA
Jane Harbottle	F	Chair	Chair	Invitee
Number eligible to attend		2	12	4
Number attended		2	12	4
		Member
Number eligible to attend		4
Number attended		4
Director of Finance (Attended by Deputy Director of Finance as official representative of the Director of Finance, see Invitees to Board below)
Lorna Maden to 8 May 2023	F	Member	Member	Invitee
Number eligible to attend		1	2	1
Number attended		0	0	0
Adrian Hannell from 9 May 2023 to 17 September 2023	M	Member	Member	Invitee
Number eligible to attend		3	6	2
Number attended		4	1	2
Caroline Patterson from 18 September 2023	F	Member	Member	Invitee
Number eligible to attend		3	7	2
Number attended		2	0	1
Principal Legal Advisor to LAA
Rachel Aaron to 8 May 2023	F	Member	Member
Number eligible to attend		0	1
Number attended		0	1
Charlotte Hackett from 9 May 2023	F	Member	Member
Number eligible to attend		2	11
Number attended		2	10
		Invitee
Number eligible to attend		4
Number attended		3
LAA Operations Committee Co‑Chair
Alistair Adan – Deputy Director, Head of Civil and Crime Case Management	M	Member	Member
Number eligible to attend		2	12
Number attended		2	11
		Invitee
Number eligible to attend		4
Number attended		4
LAA Operations Committee Co‑Chair
Samantha Milton – Deputy Director, Head of Exceptional and Complex Cases to 1 January 2024	F	Member	Member
Number eligible to attend		2	9
Number attended		2	7
		Invitee
Number eligible to attend		2
Number attended		0
LAA Finance and Risk Committee Chair
David Thomas – Deputy Director, Head of Contract Management and Assurance	M	Member	Member	Invitee
Number eligible to attend		2	12	4
Number attended		2	11	3
		Invitee
Number eligible to attend		4
Number attended		4
Deputy Director, Head of Transformation
Hannah Payne	F	Member	Member
Number eligible to attend		2	12
Number attended		0	10
		Invitee
Number eligible to attend		4
Number attended		1
Joanna Fiddian	F	Member	Member
Number eligible to attend		2	12
Number attended		2	10
		Invitee
Number eligible to attend		4
Number attended		3
LAA People Committee Chair
Lucy Jones – Deputy Director, Head of Corporate Services to 23 June 2023	F	Member	Member
Number eligible to attend		1	2
Number attended		1	2
Martha Blom-Cooper – Deputy Director, Head of Corporate Services from 10 July 2023	F	Member	Member
Number eligible to attend		0	9
Number attended		0	8
		Invitee
Number eligible to attend		4
Number attended		4
Non-Executive Board Member – LAA Board Chair
Nick Campsie from 22 June 2023	M	Chair		Member
Number eligible to attend		5		2
Number attended		5		2
Non-Executive Board Member – Financial
Kenneth Gill from 12 June 2023	M	Member		Chair
Number eligible to attend		5		3
Number attended		5		3
Non-Executive Board Member – Legal
Professor Suzanne Rab	F	Member		Member
Number eligible to attend		6		4
Number attended		6		4
Non-Executive Board Member – Commercial
Deep Sagar to 31 May 2023	M	Member		Member
Number eligible to attend		1		1
Number attended		1		1
Invitees to Board
Deputy Director of Finance
1: to 16 June 2023	F	Invitee	Member	Invitee
Number eligible to attend		1	2	1
Number attended		1	1	1
2: from 16 June 2023 to 19 September 2023	M	Invitee	Member	Invitee
Number eligible to attend		1	3	1
Number attended		1	3	1
3: from 16 June 2023	M	Invitee	Member	Invitee
Number eligible to attend		3	10	3
Number attended		3	9	3
Head of LAA Digital
1: to 24 March 2024	M	Invitee	Member
Number eligible to attend		6	12
Number attended		3	8
2: from 25 March 2024	F	Invitee	Member
Number eligible to attend		0	1
Number attended		0	1
MOJ HR Director for LAA (Attended by MOJ Senior HR Business Partner for LAA)
1: to 22 April 2022	F	Invitee	Member
Number eligible to attend		5	10
Number attended		3	8
2: from 5 May to 31 August 2022	F	Invitee	Member
Number eligible to attend		1	2
Number attended		0	2

Committee roles and responsibilities

Legal Aid Agency Board

Name of committee	Legal Aid Agency Board
Chair	Chair of LAA Board and Lead Non-Executive Board member
Frequency	Bi-monthly There were six meetings of the Board and an Extraordinary Board meeting to approve the Annual Report and Accounts during 2023-24.
Role	The LAA Board supports the Accounting Officer and other senior officials in directing the business of the LAA. The Board is ultimately responsible for providing advice on the governance and strategic direction of the LAA. Some responsibilities of the Board are delegated to its committees, which are set out in the following tables.
Responsibilities	• Chief Executive • Non-Executive Board Members (NEBMs) • Principal Legal Adviser • Director of Finance • Chairs of the three committees: – Operations Committee: Deputy Director for Case Management and Deputy Director for Exceptional and Complex Cases – Finance and Risk Committee: Deputy Director for Contract Management and Assurance – People Committee: Deputy Director for Corporate Services • Deputy Director Transformation • Deputy Director for Finance There have been changes to the individual board members.
Key activities this year	During the year the Board has reviewed key aspects of LAA’s operational performance focusing on operational performance, digital and service transformation, finances and risks. The Board has taken assurance from the work of internal audit that effective controls are in operation. The Board focused heavily on strategic priorities and the programme of strategic options to simplify legal aid and make the system more sustainable; monitoring progress against plans. The Shadow Board continues to be a successful forum for colleagues to learn about decision-making at Board level and to understand the rationale and work behind decisions and provides an extra layer of challenge and support to the Board. New Shadow Board members have been recruited to expand the opportunity and experience for more staff.

Audit and Risk Assurance Committee

Name of committee	Audit and Risk Assurance Committee
Chair	Finance Non-Executive Board Member
Frequency	Quarterly There were four meetings of ARAC and an Extraordinary ARAC meeting to approve the Annual Report and Accounts during 2023-24.
Role	The ARAC advises the Board collectively on issues of risk, control and governance, using its professional expertise in financial, legal and commercial matters to challenge and support the LAA.
Responsibilities	The committee is made up of NEBMs, who are also members of the LAA Board. They do not have any executive responsibilities.
Key activities this year	During 2023-24 the ARAC has continued to maintain strong oversight and challenge of the LAA’s financial statements, error rate, data security and business continuity arrangements, receiving assurance reports from management and internal and external audit. In exercising their duties and accountabilities both the Board and ARAC have provided significant support, challenge and guidance throughout the financial year.

Executive Leadership Team

Name of committee	Executive Leadership Team
Chair	Chief Executive
Frequency	Monthly There were 12 meetings of ELT during 2023-24.
Role	The ELT is the senior committee and has overall management responsibility for the LAA. The ELT take decisions on the strategy for, and management of, the LAA, including the future capability and capacity of the LAA to meet departmental and government reform plans and the strategic management of corporate level risks.
Responsibilities	The ELT maintains high-level oversight of the operational running of the LAA and is supported in its responsibilities by three committees and one shared committee with the Digital team (hosted in MOJ). That shared committee moved to become one of the three ELT committees in Summer 2023, making a total of four committees. These committees were created to facilitate deeper, focused discussions on specific issues as well as the completion of tasks delegated from the ELT. • Operations Committee: To take decisions on implementing policy proposals and on the optimisation of business processes to deliver legal aid efficiently and effectively, including the interface with providers. It will review and challenge performance not limited to external KPIs and oversee the management of operational risks. • Finance and Risk Committee: In 2023-24, the Finance and Risk Committee has continued to support the ELT and ARAC, particularly through scrutinising risk management and corporate assurance matters. This scrutiny has primarily been through a rolling programme by our Risk Working Group of reviews of departmental risk management a review of corporate assurance activity and progress on audit recommendations and deep dives on topics such as provider risk management, the organisational budgeting cycle, cyber risk assessment of LAA systems and of the approach to ensuring proactive error risk assessment within the organisation’s transformation programme. • People Committee: The People Committee provides business focused assurance to the Board and ELT that LAA is delivering on its People Strategy, identifying and addressing risks on behalf of ELT and ensuring the LAA meets its Public Sector Equality Duty responsibilities. The committee monitors the implementation and effectiveness of the People Strategy and annual People Plan. It facilitates effective implementation of MOJ people policies, ensuring the agency is making transparent and fair decisions regarding its people. • Joint Prioritisation Board (JPB) / Transformation and Change Committee (TCC): In summer 2023, our forum for oversight, prioritisation and implementation of digital change moved to be wholly integrated into LAA governance, and was renamed from JPB to TCC. This improved governance provides clearer lines of accountability and escalation to the ELT. The TCC is chaired by the LAA Head of Transformation and includes membership from LAA Digital, Transformation and Operational teams to improve collaboration, prioritisation and delivery.
Key activities this year	• Operations Committee: The committee continued its work on how best to carry out policies, operate digital changes and improve business processes to deliver legal aid efficiently. This included a keen focus on the effect of any changes on legal aid stakeholders. Operations Committee reviewed and challenged performance, holding business areas to account to deliver improvements. • Finance and Risk Committee: This year the committee has continued its emphasis on improving risk insight and challenge through the Risk Working Group and continued to proactively review and advise operational teams on further strengthening risk management and escalation. • People Committee: The 2023 People Survey saw the LAA engagement index increase by two percentage points to 70%. The LAA remains one of the highest scoring departments in MOJ. The committee focused on the learning and development offer to staff, tailored to individual needs and business need. • Joint Prioritisation Board (JPB) / Transformation and Change Committee (TCC): A particular achievement for 2023-24 was the change from JPB to TCC and the move to be wholly integrated into LAA Governance structure. This has provided clearer lines of accountability and escalation to ELT, a more focused membership and improved collaboration, prioritisation and delivery of transformation and change across the agency.

Internal control framework

The system of internal control is designed to manage risk to an acceptable level, rather than to eliminate all risk in relation to achieving its policies, aims and objectives. Based on the LAA’s assurance framework I am reasonably assured of the effectiveness of the system of internal control.

As explained in our operating model above, I am assisted in the stewardship of the LAA’s resources and management of its risks by the Board, ELT and committee chairs. I receive written assurance from my deputy directors on the effectiveness of risk management and control in the form of annual assurance declarations.

In addition, the MOJ as part of a functional leadership framework, provides us with a suite of digital, financial and HR systems, policies and expertise that are applied where relevant. Each function provides an MOJ-wide assessment against the relevant standard and frameworks. There are formal governance and assurance mechanisms in place across MOJ and between functions and the LAA.

I also receive an internal audit service from the Government Internal Audit Agency, which provides me with independent assurance over the effectiveness of my organisation’s governance, risk management and control environment.

Head of internal audit opinion

During the course of the audit programme in 2023-24 eight audits were rated as Moderate or Substantial (one Substantial and seven Moderate) and two were rated as Limited. There was one further advisory audit. Of the 51 audit recommendations agreed with management, none was high priority. The trend towards Substantial and Moderate opinions is consistent with previous years.

Based on the work completed throughout the course of the year, his knowledge of the LAA and attendance at the ARAC, the Head of Internal Audit has provided a ‘Moderate’ opinion with some improvements required to enhance the adequacy and effectiveness of the agency’s framework of governance, risk management and control. Management action continues to be monitored by LAA Corporate Assurance and reported on to the ARAC.

Risk management framework

Risk management is key to good governance; it aids the development and achievement of our strategy, our performance and our decision-making. As an executive agency of MOJ, we continue to align with the ‘Orange Book: Management of Risk – Principles and Concepts’, as well as the MOJ’s risk management framework, which underpins how we manage risk across the department. During 2023-24 we have made significant progress against our commitment to increase our overall levels of risk maturity within the agency.

Risk management process

Risk and Resilience

Organisation

Each local senior management team has a risk log or register in place. Risks are identified, analysed and managed at team level, with links to our core operational objectives. Risks are escalated to the Agency’s Corporate Risk Report and assigned a Senior Risk Owner where they are assessed as requiring executive-level management.

Process

Our Risk Working Group meets each month, comprising representatives from across the LAA. Their analysis of risk for their areas alongside horizon-scanning is considered in the context of the Corporate Risk Report. Outputs help inform the thinking and recommendations of our executive committees and ultimately our ELT on emerging and established corporate level risks. Continuous

Improvement

Considering best practice and seeking opportunities to improve our overall risk maturity is a continuing priority. We have engaged with our ARAC to seek feedback on existing processes and endorsement of proposed changes. During 2023-24, we have refreshed our Risk Appetite Statement and have begun work on a thorough review of risk appetite and tolerance during Q4 that will continue into 2024-25. We have engaged with ARAC to seek feedback on existing processes and endorsement of proposed priorities for the year ahead.

Reporting

We have continued to strengthen our reporting this year, building on existing processes of capturing and escalating risk to ensure effective and regular oversight at suitable levels within the LAA, as well as inputting to MOJ’s Executive Committee quarterly. We have improved the format of our Corporate Risk Reporting, allowing greater focus on controls and risk management assessments, undertaken by Senior Risk Owners.

Significant risks and issues in 2023-24

As an organisation we have continued to manage ongoing and inherent risks to the delivery of our Strategic Objectives, building on our existing risk management framework to strengthen processes and allow for the identification of emerging risks as well as the effective and thorough assessment and interrogation of existing risks and issues. The ARAC, ELT and Board have continued to review and challenge the progress made to manage the risks documented in the LAA’s Corporate Risk Report, which focuses on the key internal, external and strategic risks to the delivery of our objectives. Our headline corporate level risks across the year have included: General Data Protection Regulation (GDPR) governance and compliance, legacy technology (including system failure and security), net error rate, recruitment and retention and the sustainability of the legal aid market.

The table on the following pages sets out further detail on risks that have been managed at a corporate level over the last year, with accompanying narrative on key actions and links to our Strategic Objectives.

Our strategic objectives:

SO1 Deliver access to justice through legal aid services that meet the needs of our users

SO2 Modernise our services, delivering value for money for taxpayers

SO3 Become a truly diverse and inclusive employer of choice

Description	Key activities and headlines	Risk severity and direction of trend
Digital Reducing the level of technical debt and improving resilience and flexibility of digital services. SO1, SO2, SO3	The migration of the CCMS Oracle application ‘CCMS E-Business Suite’ to Amazon Web Services cloud improved System stability, prompting a slight decrease in the likelihood of both the Legacy Technology and System Failure risks. Additional investment funding requested for 2024-25 to implement further stabilisation initiatives, following the recommendations made by an independent review of legacy systems by a professional services consulting firm. Progress on developing Crime and Civil Apply, allowing more types of applications to be submitted through the services. Two professional services contracts implemented successfully to supplement existing digital delivery teams, these services will be expanded next year to further increase developer and technical architecture capacity and capabilities. The management of Risk in LAA Digital has matured this year due to improvements in cross‑departmental engagement and consultation, analysis and control planning maturity, and deeper collaboration.	No change High risk
Security and Information Reducing the likelihood of a cyber security attack, together with keeping our information secure and enabling better information practice. Improving compliance with GDPR and other legislation. SO1, SO2, SO3	Throughout 2023-24, our understanding of the nature and extent of our data protection and cyber security risks has improved. This is in the context of heightened levels of risk from external threats of exposure to loss of personal or sensitive data. Our legacy services have many different support models and commercial arrangements and rely on different underlying technology. The complexity of our digital estate, together with the large volumes of sensitive information, makes reducing risk in this area challenging. We strengthened corporate governance and engagement with MOJ Security and Justice Digital to inform resourcing decisions, prioritisation of remedial work, and escalation of risks to MOJ Finance, Performance and Risk Committee where appropriate. Overall, the management of risks in this area remained challenging but improving.	No change High risk
Finance LAA Fund spend falling outside budget by year‑end SO2	Legal Aid Fund expenditure is, by its demand‑led nature, volatile and therefore difficult to forecast. Increased uncertainty in the Crown, Civil and Family courts due to ongoing recovery from issues introduced during the pandemic has increased this difficulty in recent years. We have continued to use established governance processes to monitor spend, identify, and analyse uncertainties as well as manage anticipated fund variances. We have a strong risk management process embedded in our governance, and this continues to provide an effective control to our management of Fund expenditure.	Increase Medium risk
Provider Capacity Maintaining sufficient provision capacity to meet an uncertain demand. SO1	The LAA actively manages the provider-base taking action within its control to address actual or potential gaps in provision. For example, the LAA put in place arrangements for providers outside the South West to advise clients who do not have access to a local provider. The provider capacity risk has received corporate‑level oversight throughout the year. The LAA has engaged with MOJ Policy colleagues and ministers to outline challenges and agree options to maintain service provision. At a systemic level, there is sufficient coverage in place. However, there are areas where it is more difficult to access services. Maintaining supply using operational levers alone is challenging.	No change Medium risk
Regularity Error The complexity of legal aid means there is an inherent risk of error because of incorrect eligibility assessments or inaccurate payments. SO2	The level of error is continually scrutinised and managed as part of our stewardship arrangements. Our application and payment processes are subject to ongoing policy and administrative changes. In response to these changes we continue to focus on reducing error in a stable and sustainable way by working closely with our providers and collaborating across our contract management, case management, finance and digital teams, to identify and address root causes and strengthen both internal controls and provider compliance. The effectiveness of this work is demonstrated through our net regularity error rate, which we are maintaining at a low rate.	No change Medium Risk
People and Capability Recruiting and retaining sufficient capable individuals to ensure continually effective service delivery. SO1, SO3	During 2023-24 we have implemented new strategies in our recruitment process which have improved our success rate, including streamlining entry level roles, increasing visibility of management roles, and improving language and accessibility of job advertisements. A Workforce Plan has been introduced within the operational directorate, which enables them to review resourcing, forecast requirements and understand future resource needs ensuring we can deliver policy changes and core services. An audit of retention identified data as the priority to understanding and mitigating our risks. Early progress had been made on this ahead of a Retention Risk deep dive planned for April 2024. Overall, the recruitment risks are well managed and controlled and management of our retention risk is improving.	Decrease Medium risk
Property Failure to maintain an estate that is compliant, operational, environmentally sensitive and efficient. SO1, SO3	We now share space at the majority of our sites with other government departments. We have seen reduced risks in terms of health and safety, security, and service level agreement compliance. These reductions, driven by improved control effectiveness and risk management, culminated in the de-escalation of our Facilities Management risk from corporate-level oversight in October 2023 to be managed at local level. The LAA works closely with the MOJ Property Team and the Government Property Agency to highlight key risks, gaps in Service Level Agreement performance and to emphasise key improvements required in preparation for the next contract review.	Decrease Low risk

Risk horizon

Looking ahead to 2024-25 we anticipate pressures with LAA Digital resource to continue and we will need to ensure GDPR remediation work, issues relating to our legacy technology, and the safety of our data and systems are appropriately prioritised, while remaining committed to the modernisation of our services. We will continue to consider risks in the context of the delivery of our core organisational objectives, and so anticipate an ongoing, though evolving, focus on recruitment and retention, the sustainability of the legal aid market and the potential for disruptive action.

Error rate

Maintaining a low level of error has remained a priority in 2023-24. Our gross error rate was 1.02% in 2023-24 compared to 1.26% in 2022-23. Addressing overpayments has helped reduce the most likely level of error to a net position of £14.7 million (0.68%) of expenditure compared to £17.8 million (0.96%) of expenditure in 2022-23. Based on the statistical sampling techniques used, we have 95% confidence that the actual level of net error in 2023-24 is between 0.44% and 0.91% of legal aid spend. As well as identifying instances where providers have been paid more than is reasonably justified, our testing reviews also identify instances where there have been underpayments. In 2023-24 our estimated underpayment was 0.15% of the total legal aid expenditure (compared to 0.13% in 2022-23).

Specific issues to highlight this year

Net error rate category

Court Assessed claims 2.32%

2023-24 saw a decrease in our net error rate for Court Assessed claims (2.57% in 2022-23), which providers can alternatively decide to be assessed by the LAA.

Legal Help claims 1.19%

This has reduced from 1.72% in 2022-23 following an emphasis on improvements for assessments, training and guidance, and our continuing work with providers to identify improvements through contract management activity. This will continue to be a focus area into 2024-25.

Fraud, bribery and corruption

Counter fraud updates are a regular item at FRC and ARAC meetings. We raise awareness of fraud, bribery and corruption for LAA employees through presentations, workshops, intranet articles, newsletters and provision of advice on specific projects and transformation programmes. The Counter Fraud and Investigations (CFI) Team run a series of counter fraud presentations across the operational delivery business areas. We also promote mandatory biannual counter fraud refresher e-learning and hold bespoke events in support of International Fraud Awareness Week.

We are part of the Public Sector Fraud Authority’s Community of Practice network and work collaboratively with them. We maintain close working relationships with the Department of Work and Pensions, Solicitors Regulation Authority and other wider stakeholders to collect intelligence and share data to prevent, detect, investigate and prosecute fraud. Where possible we engage with law enforcement agencies, prosecuting authorities and the CPS to prosecute fraud against the legal aid fund.

We continue to explore opportunities to make better use of available data and to identify new sources of data from external stakeholders. Data matching is an important area of work to highlight potential fraud risks, provide assurance, support operational decision-making and case adoption thresholds. It also supports justification for further investigation where appropriate and can signpost to evidential opportunities to support enforcement action and recover monies lost to fraud. We seek to innovate and enhance proactive fraud detection and prevention capabilities within the Agency and work with subject matter experts within the department to maximise our opportunities in this space. The LAA works closely with the MOJ Counter Fraud Centre of Expertise and our counter fraud peers within the broader MOJ and we strive to meet the requirements set out in the Government Functional Standard for Counter Fraud, Bribery and Corruption.

The LAA’s counter fraud activity during 2023-24 resulted in the recovery or preservation of £655,133 of public funds In 2023-24 the LAA continued to apply its risk based approach to preventing, detecting and investigating suspected fraud compared to £512,303 in 2022–23

Note: Annual figures for financial recoveries or preservations as a result of fraud investigations will vary from year to year. There are many variable factors with any fraud investigation, examples being the fund take of a provider, the available evidence and the identification of monies that can be attributed to fraud. The timeline for recoveries will also be influenced by a provider’s ability to repay or the outcome of civil and or criminal proceedings.

Whistleblowing

I can confirm that the MOJ policy and procedure for whistleblowing (raising a concern) applies to all LAA staff. That provides guidance on the process for raising a whistleblowing concern (including public interest disclosures) and advice on the protection afforded to an individual who raises a concern. The policy is accessible to all staff on the intranet. It provides reassurance that concerns will be investigated promptly and professionally.

The policy has been updated and steps have been taken to raise awareness and strengthen the ways that disclosures are managed.

In 2023-24 no matters were raised and at 1 April 2024 there were no open investigations.

Information assurance and data security

The LAA processes high volumes of personal data belonging to legal aid clients. We take information security very seriously and direct our people to complete mandatory training on their responsibilities for handling information and ensure data protection policies and procedures are in place. We work with Justice Digital on the protection of data held on digital systems.

All incidents are investigated to ensure that root causes are identified and strengthen our policies and systems. In addition, both MOJ Security and Information Group and the LAA ARAC challenge our performance on incident management providing direction and oversight.

In 2023-24, there were 281 personal data incidents reported. This represents a decrease of 39 (12%) on the previous year. The LAA consistently reports low numbers of incidents considering the large volume of transactions and data that the LAA processes.

There have been no high impact incidents in 2023-24 that met the threshold for reporting and was reported to the ICO.

Table 6. Data incident numbers by category between years 2021-22, 2022-23 and 2023-24

Category	Nature of incident	2021-22	2022-23	2023-24
I	Cyber security incidents	5	7	12
II	Personal or personnel security incidents	–	2	1
III	Physical security incidents	5	14	21
IVa	Information security incidents – loss or theft of an information asset	7	21	8
IVb	Information security incidents – unauthorised disclosure of an information asset	163	276	238
IVc	Information security incidents – other incidents relating to information assets	2	–	1
Total		182	320	281

Figure 2. Personal data incidents by category: five-year period

Incident volumes have decreased this year. Unauthorised disclosure of items of correspondence or documents to an incorrect recipient remain LAA’s most common incident type. Of these incidents, many have their root cause outside the LAA, for example, when the LAA is provided with an incorrect address. The LAA will continue to develop appropriate remedial actions and process improvements to reduce the impact of incidents and the likelihood of incidents occurring.

Conclusion

I am confident this statement provides a comprehensive account of the governance, risk management and control arrangements we have embedded within the LAA. I am particularly pleased that our Head of Internal Audit has provided a ‘Moderate’ opinion and recognised this as an improvement compared to last year. We have taken steps to strengthen our risk management process including the establishment of the Risk Working Group and have completed comprehensive effectiveness reviews of the ARAC and each of the ELT committees. The success of these arrangements is due to the people and processes in place, which have ensured the LAA has met its business objectives and continues to be a supportive and innovative place to work as reflected in our Civil Service People Survey results.

Signed for and on behalf of the Legal Aid Agency

Jane Harbottle

Chief Executive and Accounting Officer

Legal Aid Agency

22 July 2024

Remuneration and staff report

This section summarises the LAA’s policy on remuneration of Executive Board Members, NEBMs and staff. It also provides detail of actual costs and contractual arrangements.

The remuneration and staff report has been prepared in accordance with the requirements of the FReM as issued by HM Treasury.

The Prime Minister sets the remuneration policy of Senior Civil Servants (SCS) following independent advice from the Senior Salaries Review Body. The salaries of LAA Executive Board members were set following discussions between the Permanent Secretary of the MOJ and directors general in accordance with the rules of the Civil Service management code.

The LAA does not have a Remuneration Committee. The key functions of a Remuneration Committee are dealt with through the MOJ Workforce Committee. The MOJ Workforce Committee is chaired by the Permanent Secretary and attended by all directors general and chief executives of His Majesty’s Prison and Probation Service (HMPPS), HMCTS and the LAA. The committee meets on a monthly basis to manage talent, capability and people resources. In addition, the committee is responsible for ensuring the LAA has a workforce that is the right size, has the right skills, is well managed, properly motivated and correctly deployed.

The tables in this report have been subject to audit by the external auditor, the Comptroller and Auditor General (C&AG), appointed under the Government Resources and Accounts Act 2000.

Remuneration policy

Executive Board Members

Service contracts

The Constitutional Reform and Governance Act 2010 requires civil servant appointments to be made on merit on the basis of fair and open competition. The Recruitment Principles published by the Civil Service Commission specify the circumstances where appointments may be made otherwise. The Executive Board Members covered by this report hold appointments that are open ended. Early termination, other than for misconduct, would result in the individual receiving compensation as set out in the Civil Service Compensation Scheme. Further information about the work of the Civil Service Commission can be found at: www.civilservicecommission.independent.gov.uk

Performance process

SCS follow the Cabinet Office guidelines that incorporate the SCS Performance Management Framework. There were two ‘formal’ Performance Management Review (PMR) discussions in the year and then regular one-to-one meetings to monitor progress and ensure that all objectives were still relevant. The performance measures for each member of the Executive Board have been met.

Total amount of salary and fees

Salary and allowances cover both pensionable and non-pensionable amounts and include: gross salaries; overtime; reserved rights to London weighting or London allowances; recruitment and retention allowances; private office allowances; or other allowances to the extent that they are subject to UK taxation and any ex-gratia payments. It does not include amounts that are a reimbursement of expenses directly incurred in the performance of an individual’s duties.

All taxable benefits

Taxable benefits include all benefits in kind and taxable cash benefits. The monetary value of benefits in kind covers any benefits provided by the employer and treated by His Majesty’s Revenue and Customs (HMRC) as a taxable emolument. Benefits recognised relate to travel and subsistence. The benefits in kind stated for Executive Board Members and NEBMs are estimates, the final values are to be agreed between the LAA and HMRC and are paid using a Pay As You Earn Settlement Agreement.

Bonus payments

Bonuses are based on performance levels attained and are made as part of the appraisal process. Bonuses relate to the performance in the year in which they become payable to the individual. The bonuses reported in 2023-24 relate to the performance in 2022-23 and the bonuses reported in 2022-23 relate to the performance in 2021-22.

All pension related benefits

Section 229 of the Finance Act 2004 determines the maximum annual level of pension savings that can be accrued under a defined benefit arrangement before any taxation is charged. The amount of savings shown in Table 7 is the increase in the value of the individual’s promised benefits over the pension input period (which is the financial year for the LAA). Any increase is the difference between the value of the individual’s benefits at the start of the pension input period (1 April 2023) and the value of the individual’s benefits at the end of the pension input period (31 March 2024), this also incorporates any increase to pensionable pay. Regulations specify a modification to the HMRC rules for this purpose, in order to value the benefits HM Treasury has advised pension schemes to use a multiplier of 20.

Non-Executive Board Members

All NEBMs remained in post for 2022-23 as part of their fixed period appointments. One NEBM stepped down from their post on 28 February 2023 and one NEBM left on 31 May 2023 at the end of their fixed term. Recruitment is currently in progress for new NEBMs.

NEBMs are not members of the Principal Civil Service Pension Scheme (PCSPS) and were not entitled to any other benefits or remuneration.

If a NEBM appointment was terminated for reasons other than the expiry of their term, the Secretary of State for Justice could determine that compensation was payable based on the nature of the termination and the length of the term remaining.

Details in relation to NEBMs’ service terms, benefits or remuneration are included in Tables 13 and 14 on page 75.

Table 7. Senior employees in post during 2023-24 – employment costs (subject to audit)

Executive Board Members	Total amount of salary and fees	All taxable benefits (to nearest £100)	Bonus payments	Pensions related benefits (to nearest £1000)	Total (to nearest £1000)	Total amount of salary and fees	All taxable benefits (to nearest £100)	Bonus payments	Pensions related benefits (to nearest £1000)	Total (to nearest £1000)
Jane Harbottle[footnote 1] Chief Executive	115-120	15.8	10-15	n/a	140-145	105‑110	15.2	10-15	9	140-145
Caroline Patterson[footnote 2] Director of Finance from 18 September 2023	60-65 (FYE 115-120)	–	–	n/a	60-65 (FYE 115-120)	–	–	–	–	–
Rachel Aaron[footnote 3] Principal Legal Advisor to the LAA to 8 May 2023	5-10 (FYE 75-80)	–	0-5	n/a	5-10 (FYE 75-80)	–	–	–	–	–
Alistair Adan[footnote 4] Deputy Director, Head of Civil and Crime Case Management to 31 July 2023	25-30 (FYE 80-85)	–	0-5	n/a	30-35 (FYE 85-90)	75-85	3.5	0-5	20	100-105
Joanna Fiddian Deputy Director, Head of Transformation (job share) to 31 July 2023	15-20 (FYE 55-60)	–	0-5	n/a	15-20 (FYE 55-60)	55-60	–	0-5	17	75-80
Charlotte Hackett[footnote 5] Principal Legal Advisor to the LAA from 9 May 2023 to 31 July 2023	15-20 (FYE 80-85)	–	0-5	n/a	20-25 (FYE 85-90)	–	–	–	–	–
Adrian Hannell[footnote 6]  Director of Finance from 9 May 2023 to 17 September 2023	45-50 (FYE 120-125)	–	0-5	n/a	50-55 (FYE 120-125)	–	–	–	–	–
Lucy Jones Deputy Director, Head of Corporate Services to 23 June 2023	15-20 (FYE 75-80)	–	5-10	n/a	25-30 (FYE 90-95)	75-80	–	5-10	11	95-100
Lorna Maden[footnote 7] Director of Finance to 8 May 2023	10-15 (FYE 115-120)	–	–	n/a	10-15 (FYE 115-120)	115‑120	–	–	(22)	90-95
Samantha Milton Deputy Director, Head of Exceptional and Complex Cases to 31 July 2023	20-25 (FYE 60-65)	–	–	n/a	20-25 (FYE 60-65)	65-70	–	–	(1)	65-70
Hannah Payne Deputy Director, Head of Transformation (job share) to 31 July 2023	15-20 (FYE 50-55)	–	0-5	n/a	15-20 (FYE 55-60)	50-55	–	0.5	–	50-55
David Thomas Deputy Director, Head of Contract Management and Assurance to 31 July 2023	25-30 (FYE 80-85)	–	5-10	n/a	35-40 (FYE 90-95)	75-80	–	–	14	90-95

Accrued pension benefits for directors are not included in this table for 2023-24 due to an exceptional delay in the calculation of these figures following the application of the public service pensions remedy. ^{[footnote 8]}

Fair pay disclosure (subject to audit)

Reporting bodies are required to disclose the relationship between the salary of the highest paid Executive Board Members in their organisation and the median earnings of the organisation’s workforce.

Table 8. Annual percentage change from the previous year in total salary and bonus of highest paid director and employees

	Total amount of salary and fees	Bonus Payments	Total amount of salary and fees	Bonus Payments
	%	%	%	%
Employees[footnote 9]	5.7	46.7	3.8	-3.3
Highest paid director[footnote 10]	9.3	0.0	3.0	266.7

Table 9. Ratio between highest paid director’s total remuneration and employees in the lower quartile, median and upper quartile

Financial Year	Lower Quartile	Median	Upper Quartile
2023-24[footnote 11]	6.2:1	5.1:1	3.9:1
2022-23	6.0:1	5.1:1	3.7:1

Table 10. Lower quartile, median and upper quartile for total staff remuneration

Salary	2024	2023	2024	2023	2024	2023
	Lower Quartile		Median		Upper Quartile
	£	£	£	£	£	£
Salary Component	22,940	21,775	27,250	25,827	35,040	35,420
Total staff remuneration	23,140	21,975	27,762	26,127	36,254	35,952

The banded remuneration for the highest paid Executive Board Member in the LAA in the financial year 2023-24 was £140-145,000 (2022-23: £130-135,000). This was 5.1 times (2022-23: 5.1) the median remuneration of the workforce, which was £27,250 (2022-23: £25,827). These increases in banding and ratio are mainly driven by increases in bonus payments and benefits in kind.

In 2023-24, two staff members or contractors (2022-23: five) received banded remuneration in excess of the highest paid Executive Board Member.

Staff remuneration ranged from £20-25,000 to £195-200,000 (2022-23: £15-20,000 to £185‑190,000).

Total remuneration included salary, non-consolidated performance related pay and benefits in kind. It did not include employer pension contributions and the Cash Equivalent Transfer Value of pensions.

In 2020-21, following approval from Cabinet Office and HM Treasury, a three-year pay deal was implemented for MOJ including LAA employees. The three-year pay deal runs from 1 August 2020 until 31 July 2023, years one and two were implemented in September and October 2021

respectively (and backdated), year three was implemented in August 2022.

The implementation of the pay award in 2022 increased staff remuneration against the highest paid director and reduced the ratio against all quartiles.

The LAA believes that the median pay ratio is consistent with the agency’s pay, reward and retention policies. The base salaries of all employees, including the Executive Directors, are set with reference to a range of factors including market practice, experience and performance in role.

Table 11. Executive Board Members – employment contracts

Executive Board Members	Contract start date	Term served (years)	Notice period (months)
Jane Harbottle	1 April 2016	7	3
Caroline Patterson	18 September 2023	–	3

Rachel Aaron, Alistair Adan, Joanna Fiddian, Charlotte Hackett, Adrian Hannell, Lucy Jones, Lorna Maden, Samantha Milton, Hannah Payne and David Thomas left the Board in 2023-24.

Civil Service pension benefits

Civil Service pensions

Pension benefits are provided through the Civil Service pension arrangements. From 1 April 2015 a new pension scheme for civil servants was introduced, the Civil Servants and Others Pension Scheme or Alpha, which provides benefits on a career average basis with a normal pension age equal to the member’s State Pension Age (or 65 if higher).

From that date all newly appointed civil servants and the majority of those already in service joined Alpha. Prior to that date, civil servants participated in the Principal Civil Service Pension Scheme (PCSPS). The PCSPS has four sections: three providing benefits on a final salary basis (Classic, Premium or Classic Plus) with a normal pension age of 60; and one providing benefits on a whole career basis (Nuvos) with a normal pension age of 65.

These statutory arrangements are unfunded with the cost of benefits met by monies voted by Parliament each year. Pensions payable under Classic, Premium, Classic Plus, Nuvos and Alpha are increased annually in line with Pensions Increase legislation.

Existing members of the PCSPS who were within 10 years of their normal pension age on 1 April 2012 remained in the PCSPS after 1 April 2015. Those who were between 10 years and 13 years and 5 months from their normal pension age on 1 April 2012 switch into sometime between 1 June 2015 and 1 February 2022.

Because the government plans to remove discrimination identified by the courts in the way that the 2015 pension reforms were introduced for some members, it is expected that, in due course, eligible members with relevant service between 1 April 2015 and 31 March 2022 may be entitled to different pension benefits in relation to that period (and this may affect the Cash Equivalent Transfer Values shown in this report, see below).

All members who switch to Alpha have their PCSPS benefits ‘banked’, with those with earlier benefits in one of the final salary sections of the PCSPS having those benefits based on their final salary when they leave Alpha. (The pension figures quoted for officials show pension earned in PCSPS or Alpha as appropriate. Where the official has benefits in both the PCSPS and Alpha the figure quoted is the combined value of their benefits in the two schemes.) Members joining from October 2002 may opt for either the appropriate defined benefit arrangement or a defined contribution (money purchase) pension with an employer contribution (Partnership pension account).

Contribution rates

Employee contributions are salary-related and range between 4.6% and 8.05% for members of Classic, Premium, Classic Plus, Nuvos and Alpha.

Benefits in Classic accrue at the rate of 1/80th of final pensionable earnings for each year of service. In addition, a lump sum equivalent to three years initial pension is payable on retirement.

For Premium, benefits accrue at the rate of 1/60th of final pensionable earnings for each year of service. Unlike Classic, there is no automatic lump sum.

Classic Plus is essentially a hybrid with benefits for service before 1 October 2002 calculated broadly as per Classic and benefits for service from October 2002 worked out as in Premium.

In Nuvos a member builds up a pension based on their pensionable earnings during their period of scheme membership. At the end of the scheme year (31 March) the member’s earned pension account is credited with 2.3% of their pensionable earnings in that scheme year and the accrued pension is uprated in line with Pensions Increase legislation.

Benefits in Alpha build up in a similar way to nuvos, except that the accrual rate is 2.32%. In all cases members may opt to give up (commute) pension for a lump sum up to the limits set by the Finance Act 2004.

The Partnership pension account is an occupational defined contribution pension arrangement, which is part of the Legal & General Mastertrust. The employer makes a basic contribution of between 8% and 14.75% (depending on the age of the member). The employee does not have to contribute, but where they do make contributions, the employer will match these up to a limit of 3% of pensionable salary (in addition to the employer’s basic contribution). Employers also contribute a further 0.5% of pensionable salary to cover the cost of centrally-provided risk benefit cover (death in service and ill health retirement).

The accrued pension quoted is the pension the member is entitled to receive when they reach pension age, or immediately on ceasing to be an active member of the scheme if they are already at or over pension age. Pension age is 60 for members of Classic, Premium, Classic Plus, 65 for members of Nuvos and the higher of 65 or State Pension Age for members of Alpha. (The pension figures quoted for officials show pension earned in PCSPS or Alpha as appropriate. Where the official has benefits in both the PCSPS and Alpha the figure quoted is the combined value of their benefits in the two schemes, but note that part of that pension may be payable from different ages.)

Further details about the Civil Service pension arrangements can be found at the website www.civilservicepensionscheme.org.uk

Table 12. Executive Board Members – pension costs for the year ended 31 March 2024 (subject to audit)

	Total accrued pension and related lump sum at pension age as at 31 March 2024	Real movement in pension and related lump sum at pension age	CETV at 31 March 2024	CETV at 31 March 2023	Real increase in CETV
	£000	£000	£000	£000	£000
Rachel Aaron	n/a	n/a	n/a	n/a	n/a
Alistair Adan	n/a	n/a	n/a	n/a	n/a
Joanna Fiddian	n/a	n/a	n/a	n/a	n/a
Charlotte Hackett	n/a	n/a	n/a	n/a	n/a
Adrian Hannell	n/a	n/a	n/a	n/a	n/a
Jane Harbottle	n/a	n/a	n/a	n/a	n/a
Lucy Jones	n/a	n/a	n/a	n/a	n/a
Lorna Maden	n/a	n/a	n/a	n/a	n/a
Samantha Milton	n/a	n/a	n/a	n/a	n/a
Hannah Payne	n/a	n/a	n/a	n/a	n/a
Caroline Patterson	n/a	n/a	n/a	n/a	n/a
David Thomas	n/a	n/a	n/a	n/a	n/a

Accrued pension benefits for directors are not included in this table for 2023-24 due to an exceptional delay in the calculation of these figures following the application of the public service pensions remedy. ^{[footnote 12]}

Cash Equivalent Transfer Value

A CETV is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme.

The pension figures shown relate to the benefits that the individual has accrued because of their total membership of the pension scheme, not just their service in a senior capacity to which disclosure applies.

The figures include the value of any pension benefit in another scheme or arrangement that the member has transferred to the Civil Service pension arrangements.

They also include any additional pension benefit accrued to the member as a result of their buying additional pension benefits at their own cost. CETVs are worked out in accordance with the Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 and do not take account of any actual or potential reduction to benefits resulting from Lifetime Allowance Tax, which may be due when pension benefits are taken.

CETV figures are calculated using the guidance on discount rates for calculating unfunded public service pension contribution rates that was extant at 31 March 2024. HM Treasury published updated guidance on 27 April 2023, this guidance will be used in the calculation of 2023-24 CETV figures.

Real increase in Cash Equivalent Transfer Value

This reflects the increase in CETV that is funded by the employer. It does not include the increase in accrued pension due to inflation, contributions paid by the employee (including the value of any benefits transferred from another pension scheme or arrangement) and uses common market valuation factors for the start and end of the period.

Non-Executive Board Member

NEBMs were part-time and their role involved a commitment of 20 days per year during 2023-24. They will hold office until the end of the period for which they were appointed.

Employment costs – NEBMs

Table 13. NEBMs in post at 31 March 2024 – employment costs (subject to audit)

		2023‑24		2022‑23
Non‑Executive Board Member	Total amount Total amount of fees	All taxable benefits	Total amount Total amount of fees	All taxable benefits
	£000	£000	£000	£000
Nick Campsie	8	–	–	–
Kenneth Gill[footnote 13] ARAC Chair	8.3	2.2	–	–
Suzanne Rab	8	–	8	–

Employment contracts – NEBMs

Table 14. NEBMs – employment contracts

Non‑Executive Board Member	Contract start date	Term served (years)
Nick Campsie	22 June 2023	3
Kenneth Gill	12 June 2023	3
Suzanne Rab	1 April 2019	4

Staff report

Staff costs

Table 15. Staff costs for the year ended 31 March 2024 (subject to audit)

			2023‑24			2022‑23
	Permanently employed staff	Other	Total	Permanently employed staff	Other	Total
	£000	£000	£000	£000	£000	£000
Salaries and wages	40,961	215	41,176	35,667	336	36,003
Social security costs	4,122	–	4,122	3,714	–	3,714
Other pension costs	9,782	–	9,782	9,021	–	9,021
	54,865	215	55,080	48,402	336	48,738
Less recoveries in respect of outward secondments	–	–	–	–	–	–
Redundancy and early departures	–	–	–	–	–	–
	54,865	215	55,080	48,402	336	48,738
Fees to Non-Executive Board Members	26	–	26	27	–	27
Total	54,891	215	55,106	48,429	336	48,765

The PCSPS is an unfunded multi-employer defined benefit scheme in which the LAA is unable to identify its share of underlying assets and liabilities. A full actuarial valuation was carried out as at 31 March 2020. Details can be found in the resource accounts of the Cabinet Office: Civil Superannuation www.civilservicepensionscheme.org.uk

For 2023-24, employer’s contributions of £9,730,000 were payable to the PCSPS (2022‑23: £8,997,000) at one of four rates in the range 26.6% to 30.3% (2022-23: 26.6% to 30.3% of pensionable pay, based on salary bands. The scheme’s actuary reviews employer contributions every four years following the full scheme valuation. The contribution rates reflect benefits as they are accrued, not when costs are actually incurred, and reflect past experience of the scheme.

Employees can opt to open a partnership pension account, a stakeholder pension with an employer contribution. Employer’s contributions of £109,000 (2022-23: £89,000) were paid to one or more of a panel of appointed stakeholder pension providers.

One person (2022-23: nil) retired early on ill health grounds, the total additional accrued pension liabilities in the year amounted to £19,000 (2022-23: nil).

Staff numbers

Table 16. Average number of persons employed (subject to audit)

			2023‑24			2022‑23
	Permanently employed staff	Other	Total	Permanently employed staff	Other	Total
Directly employed	1142	–	1142	1090	–	1090
Other	–	1	1	–	3	3
Total	1142	1	1143	1090	3	1093

Table 17. Staff composition (not subject to audit)

	Male	Female
Staff composition	464	805

Figure 3. Staff composition and senior Civil Service staff by band

These numbers include the membership of the executive leadership and exclude functional leadership staff.

Diversity and Inclusion

We continue to promote an inclusive environment, to attract and retain talent and build a high-performance culture that delivers for citizens. In the 2023 Civil Service People Survey, 87% of those who took part (87% of total staff numbers) gave a positive response on the theme of Inclusion and Fair Treatment. Of the 106 Civil Service organisations that took part this was the fourth highest score achieved.

Through inclusive practices and action plans relating to race and disability we continue to build an inclusive culture. The LAA wellbeing programme promotes awareness and signposts and signposting our people to support available.

Some of our key activities during 2023-24 included:

• Delivered a number of deep dives into the Equality Act 2010 protected characteristics, including Gender, Race and Pregnancy/Maternity. Papers presented to the LAA People Committee outlined the position within the organisation for each characteristic regarding data, staff feedback, activity and issues, identifying any gaps to address.
• Delivered learning events for managers on the correct application of organisational policies linked to protected characteristics, including the use of disability leave.
• Continued to deliver against the LAA Race Action Plan, and Disability Action Plan, including commissioning a new development programme for ethnic minority staff and supporting the roll‑out of the MOJ workplace adjustment service. These are important to ensure that our diverse staff group are supported to improve the service provided to citizens and providers.
• Continued to deliver the actions in the LAA Tackling Unacceptable Behaviour Action Plan.

A key focus of the LAA People Plan was activity aimed at supporting LAA to become a truly diverse and inclusive employer of choice. This included improving the way we recruit, making improvements for candidates and the business, and ensuring fair, consistent, and transparent use of reward and recognition.

Employment of disabled persons

In line with the LAA’s Disability Confident Leaders Accreditation, which has been successfully renewed during March 2024 for a further 3 years, we have continued to deliver against our commitment, ensuring our recruitment practices are inclusive for all, being open to learning from people’s experiences and ensuring our staff have access to the right workplace adjustments when they need them. In the past year we have reviewed our job adverts, updated our candidate information pack, increased the use and availability of reasonable adjustments during the recruitment process and encouraged the use of workplace passports.

Sickness absence data (not subject to audit)

Absence is a key area of focus for both our People Committee and for the LAA Stress and Mental Health Group. A rolling wellbeing programme, regular wellbeing events and support for our people from dedicated staff ensures accessibility and clarity of the offer. A range of support is available and key events such as Stress Awareness Month are used to raise awareness and encourage discussion. We have continued to implement a revised stress risk assessment allowing our people to have focused and supportive discussions when they need them.

Figure 4. Sickness absence data (average number of sick days)

Staff turnover

The LAA continues to monitor turnover rates and support initiatives to maintain a healthy level of turnover. The annual Civil Service People Survey helps us to understand our people’s experience of working in the LAA and take appropriate action to improve effectiveness, including where turnover becomes problematic. ‘Departmental Turnover’ includes transfers of staff within the Civil Service. These are excluded from ‘Turnover’.

Table 18. Staff turnover

		2023‑24		2022‑23
	Turnover	Departmental turnover	Turnover	Departmental turnover
LAA	8.6%	6.3%	6.3%	8.3%

There were no exit packages in 2023-24 or the year before.

Redundancy and other departure costs have been agreed in accordance with the provisions of the Civil Service Compensation Scheme, a statutory scheme made under the Superannuation Act 1972. Exit costs are accounted for in full in the year of departure. Where the LAA has agreed early retirements, the additional costs are met by the LAA and not by the Civil Service Pension Scheme.

Ill health retirement costs are met by the pension scheme and are not included in the table.

Consultancy costs

Expenditure on consultancy in 2023-24 was nil (2022-23: nil).

Off-payroll engagements

During the financial year 2023-24, the LAA has reviewed off-payroll engagements where we are required to consider intermediaries, (IR35), legislation using HMRC guidance and online status indicator. We have advised our contracting body of the outcome of the status determinations so that, where appropriate, tax deductions are made at source from payments made in respect of the engagement with the LAA. Further details of off-payroll engagements in the LAA can be found in the MOJ departmental resource accounts. An MOJ-wide review of contracted-out service contracts was carried out during 2022-23 and a small number of these were identified as including elements of resource.

Contracted out service arrangements operating with resource elements may lead to a liability for employment taxes and Value Added Tax (VAT) where this has been recovered in error. No LAA contracts including elements of resource were identified as a result of this review.

Parliamentary accountability disclosures

This section has been subject to audit.

Losses and special payments

Table 19. Losses and special payments

		2023‑24		2022‑23
	Volume	£000	Volume	£000
Write-offs	8,378	14,742	4,280	8,860
Special payments	19	117	52	99
Total value of losses	8,397	14,859	4,332	8,959

In accordance with Managing Public Money, individual losses over £300,000 are separately disclosed.

There were no supplier balances written off over £300,000 (2022-23: two).

Potential loss

The LAA’s Counter Fraud and Investigations (CFI) team lead on investigations into cases of suspected fraud by provider firms and individual clients. Cases of suspected criminal fraud will be reported to the police via Action Fraud. Client cases that relate to other benefits will be referred to the Department for Work and Pensions. Some cases may lead to a subsequent criminal prosecution in the courts, supported by CFI, but in many cases the CFI team will work with other internal stakeholders to take appropriate and proportionate enforcement action to recover monies assessed as being claimed fraudulently. Any monies that cannot be recovered will be classed as a loss in future Accounts.

Remote contingent liabilities

As required by Managing Public Money, in addition to contingent liabilities disclosed in accordance with International Accounting Standard (IAS) 37 in note 16 to the Accounts, the LAA is required to disclose, for parliamentary reporting and accountability purposes, certain statutory and non‑statutory contingent liabilities where the likelihood of transfer of economic benefit is remote. As at 31 March 2024 there were no such remote contingent liabilities (31 March 2023: none).

Regularity of expenditure

We are a custodian of taxpayer funds and have a duty to Parliament to ensure the regularity and propriety of our activities and expenditure. We manage public funds in line with HM Treasury’s Managing Public Money. The importance of operating with regularity and the need for efficiency, economy, effectiveness and prudence in the administration of public resources to secure value for public money, is the responsibility of our Accounting Officer whose responsibilities are also set out in Managing Public Money. They include responsibility for the propriety and regularity of the public finances for which the Accounting Officer is answerable. As part of our stewardship arrangements, our Core Testing team assesses the level of error in Legal Aid payments and recoveries. Further details on their findings for 2023-24 are available on pages 58 and 60.

Signed for and on behalf of the Legal Aid Agency

Jane Harbottle

Chief Executive and Accounting Officer

Legal Aid Agency

22 July 2024

The certificate and report of the Comptroller and Auditor General to theHouse of Commons

Opinion on financial statements

I certify that I have audited the financial statements of the Legal Aid Agency for the year ended 31 March 2024 under the Government Resources and Accounts Act 2000.

The financial statements comprise the Legal Aid Agency’s:

• Statement of Financial Position as at 31 March 2024;
• Statement of Comprehensive Net Expenditure, Statement of Cash Flows and Statement of Changes in Taxpayers’ Equity for the year then ended; and
• the related notes including the significant accounting policies.

The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and UK adopted international accounting standards.

In my opinion, the financial statements:

• give a true and fair view of the state of the Legal Aid Agency’s affairs as at 31 March 2024 and its net operating costs for the year then ended; and
• have been properly prepared in accordance with the Government Resources and Accounts Act 2000 and HM Treasury directions issued thereunder.

Opinion on regularity

In my opinion, in all material respects, the income and expenditure recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.

Basis for opinions

I conducted my audit in accordance with International Standards on Auditing (UK) (ISAs (UK)), applicable law and Practice Note 10 Audit of Financial Statements of Public Sector Entities in the United Kingdom (2022). My responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of my certificate.

Those standards require me and my staff to comply with the Financial Reporting Council’s Revised Ethical Standard 2019. I am independent of the Legal Aid Agency in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK. My staff and I have fulfilled our other ethical responsibilities in accordance with these requirements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Conclusions relating to going concern

In auditing the financial statements, I have concluded that the Legal Aid Agency’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work I have performed, I have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Legal Aid Agency’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

My responsibilities and the responsibilities of the Accounting Officer with respect to going concern are described in the relevant sections of this certificate.

The going concern basis of accounting for the Legal Aid Agency is adopted in consideration of the requirements set out in HM Treasury’s Government Financial Reporting Manual, which requires entities to adopt the going concern basis of accounting in the preparation of the financial statements where it anticipated that the services which they provide will continue into the future.

Other Information

The other information comprises information included in the Annual Report, but does not include the financial statements and my auditor’s certificate and report thereon. The Accounting Officer is responsible for the other information.

My opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in my certificate, I do not express any form of assurance conclusion thereon.

My responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit, or otherwise appears to be materially misstated.

If I identify such material inconsistencies or apparent material misstatements, I am required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact.

I have nothing to report in this regard.

Opinion on other matters

In my opinion the part of the Remuneration and Staff Report to be audited has been properly prepared in accordance with HM Treasury directions made under the Government Resources and Accounts Act 2000.

In my opinion, based on the work undertaken in the course of the audit:

• the parts of the Accountability Report subject to audit have been properly prepared in accordance with HM Treasury directions made under the Government Resources and Accounts Act 2000;
• the information given in the Performance and Accountability Reports for the financial year for which the financial statements are prepared is consistent with the financial statements and is in accordance with the applicable legal requirements.

Matters on which I report by exception

In the light of the knowledge and understanding of the Legal Aid Agency and its environment obtained in the course of the audit, I have not identified material misstatements in the Performance and Accountability Reports.

I have nothing to report in respect of the following matters which I report to you if, in my opinion:

• adequate accounting records have not been kept by the Legal Aid Agency or returns adequate for my audit have not been received from branches not visited by my staff; or
• I have not received all of the information and explanations I require for my audit; or
• the financial statements and the parts of the Accountability Report subject to audit are not in agreement with the accounting records and returns; or
• certain disclosures of remuneration specified by HM Treasury’s Government Financial Reporting Manual have not been made or parts of the Remuneration and Staff Report to be audited is not in agreement with the accounting records and returns; or
• the Governance Statement does not reflect compliance with HM Treasury’s guidance.

Responsibilities of the Accounting Officer for the financial statements

As explained more fully in the Statement of Accounting Officer’s Responsibilities, the Chief Executive as Accounting Officer is responsible for:

• maintaining proper accounting records;
• providing the C&AG with access to all information of which management is aware that is relevant to the preparation of the financial statements such as records, documentation and other matters;
• providing the C&AG with additional information and explanations needed for his audit;
• providing the C&AG with unrestricted access to persons within the Legal Aid Agency from whom the auditor determines it necessary to obtain audit evidence;
• ensuring such internal controls are in place as deemed necessary to enable the preparation of financial statements to be free from material misstatement, whether due to fraud or error;
• preparing financial statements which give a true and fair view and are in accordance with HM Treasury directions issued under the Government Resources and Accounts Act 2000;
• preparing the annual report, which includes the Remuneration and Staff Report, in accordance with HM Treasury directions issued under the Government Resources and Accounts Act 2000; and
• assessing the Legal Aid Agency’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Chief Executive as Accounting Officer anticipates that the services provided by the Legal Aid Agency will not continue to be provided in the future.

Auditor’s responsibilities for the audit of the financial statements

My responsibility is to audit, certify and report on the financial statements in accordance with the Government Resources and Accounts Act 2000.

My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a certificate that includes my opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Extent to which the audit was considered capable of detecting non-compliance with laws and regulations, including fraud

I design procedures in line with my responsibilities, outlined above, to detect material misstatements in respect of non-compliance with laws and regulations, including fraud. The extent to which my procedures are capable of detecting non-compliance with laws and regulations, including fraud is detailed below.

Identifying and assessing potential risks related to non-compliance with laws and regulations, including fraud

In identifying and assessing risks of material misstatement in respect of non-compliance with laws and regulations, including fraud, I:

 
• considered the nature of the sector, control environment and operational performance including the design of the Legal Aid Agency’s accounting policies;
 
• inquired of management, the Legal Aid Agency’s head of internal audit and those charged with governance, including obtaining and reviewing supporting documentation relating to the Legal Aid Agency’s policies and procedures on:  
   
  • identifying, evaluating and complying with laws and regulations;
   
  • detecting and responding to the risks of fraud;
   
  • the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations including the Legal Aid Agency’s controls relating to the Legal Aid Agency's compliance with the Government Resources and Accounts Act 2000, Managing Public Money, Civil Legal Aid Regulations, Criminal Legal Aid Regulations and the Legal Aid, Sentencing and Punishment of Offenders Act 2012, and other relevant pieces of legislation stipulating legal aid fees;
 
• inquired of management, the Legal Aid Agency’s head of internal audit and those charged with governance whether:  
   
  • they were aware of any instances of non-compliance with laws and regulations;
   
  • they had knowledge of any actual, suspected, or alleged fraud;
 
• discussed with the engagement team, regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.

As a result of these procedures, I considered the opportunities and incentives that may exist within the Legal Aid Agency for fraud and identified the greatest potential for fraud in the following areas: revenue recognition, posting of unusual journals, complex transactions and bias in management estimates. In common with all audits under ISAs (UK), I am required to perform specific procedures to respond to the risk of management override.

I obtained an understanding of the Legal Aid Agency’s framework of authority and other legal and regulatory frameworks in which the Legal Aid Agency operates. I focused on those laws and regulations that had a direct effect on material amounts and disclosures in the financial statements or that had a fundamental effect on the operations of the Legal Aid Agency. The key laws and regulations I considered in this context included the Government Resources and Accounts Act 2000, Managing Public Money, employment law, tax legislation and the relevant pieces of legislation stipulating Legal Aid fees.

Audit response to identified risk

To respond to the identified risks resulting from the above procedures:

• I reviewed the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described above as having direct effect on the financial statements;
• I enquired of management, the Audit and Risk Assurance Committee concerning actual and potential litigation and claims;
• I reviewed minutes of meetings of those charged with governance and the Board; and internal audit reports; and
• I addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and other adjustments; assessing whether the judgements on estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

I communicated relevant identified laws and regulations and potential risks to all engagement team members including internal specialists and remained alert to any indications of fraud or non‑compliance with laws and regulations throughout the audit.

A further description of my responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of my certificate.

Other auditor’s responsibilities

I am required to obtain sufficient appropriate audit evidence to give reasonable assurance that the expenditure and income reported in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

Report

I have no observations to make on these financial statements.

Gareth Davies

23 July 2024

Comptroller and Auditor General

National Audit Office

157-197 Buckingham Palace Road

Victoria

London

SW1W 9SP

Footnotes

1. Jane Harbottle has a dual workplace agreement, the costs illustrate the benefit in kind for all travel to and from dual workplace locations. ↩

2. Caroline Patterson is remunerated by the MOJ Core Department and is not an LAA staff member. ↩

3. Rachel Aaron is remunerated through the Government Legal Department. ↩

4. Alistair Adan has a dual workplace agreement, the costs illustrate the benefit in kind for all travel to and from dual workplace locations. ↩

5. Charlotte Hackett is remunerated through the Government Legal Department. ↩

6. Adrian Hannell is remunerated by the MOJ Core Department and is not directly employed by the LAA. ↩

7. Lorna Maden is remunerated by the MOJ Core Department and is not directly employed by the LAA. ↩

8. For more information see: www.gov.uk/government/collections/how-the-public-service-pension-remedy-affects-your-pension ↩

9. Employees total salary and fees and bonuses is the total for all the employees of the LAA. ↩

10. Percentage changes have been calculated based on the 2023-24 employment costs in Table 7 on pages 67-69 for Executive Directors. ↩

11. The pay ratios are calculated using total remuneration costs for the Executive Directors and employees. The total salary and fees of the Executive Directors are detailed on pages 67-69 of this Report. ↩

12. For more information see: www.gov.uk/government/collections/how-the-public-service-pension-remedy-affects-your-pension ↩

13. The remuneration includes £2,400 (2022-23: £nil) as Chair of the LAA ARAC. ↩