THE body responsible for the UK’s £2bn legal aid fund has “poor oversight” of its spending and “lax” financial controls, MPs concluded.

In a critical report, the Commons Public Accounts Committee said the Legal Services Commission (LSC) did not have the ability to gauge if it was getting value for money.

It said a lack of clarity in the respective roles of the Ministry of Justice and the LSC was leading to “uncertainty and duplication”.

The committee’s report also calls for a salary cap for lawyers, highlighting the fact that some top barristers were earning more than £1m a year in legal aid fees.

It also pointed to the potentially detrimental impact of the increasing numbers of solicitors working in the Crown Courts.

This development was “threatening the long-term future of the junior criminal bar and may be affecting the quality of advocacy being provided”.

In a report published today, the committee said: “The Commission has successfully arrested the increase in legal aid spending in the last five years, but we found it is an organisation with poor financial management and internal controls and deficient management information.”

These weaknesses resulted in the LSC having its accounts qualified by the National Audit Office when they were found to have overpaid lawyers £25m.

The LSC was responsible for implementing “significant reforms” to legal aid, which were recommended by Lord Carter of Coles in 2006.

But the report added: “However, constant changes in staff at senior level – which have been costly and disruptive – and poor planning of the changes has meant that reforms have often been delayed, have not always kept to their timetable and have not been properly evaluated to assess their impact.”

Committee chairman Edward Leigh said: “The LSC has been doing a far from competent job of buying legal aid from lawyers.

“It spends large amounts of money – more than £2bn in 2008-09 – but its financial controls and management information have been lax.

“The commission’s plans, recently abandoned, to introduce price competition in the legal services market, were hamstrung by its lack of knowledge of that market.

“It must now gather much better information on the costs and profits of firms providing legal aid.”

An LSC spokesman said: “We will consider the Public Accounts Committee report carefully and submit a formal response in due course.”