- Organisations supported by the Community Justice Fund help 483,000 clients a year
- The average net benefit to Treasury for each client helped is £8,000, while the average cost of advice provision is just £510 per person.
- This equates to a net benefit to the public purse of £4billion per year
- In addition to government savings, the provision of free specialist legal advice by these organisations means each year 235,000 people who would otherwise have been unemployed remain in or gain employment.
The detailed report, ‘Defending the public purse: The economic value of the free legal advice sector’, was compiled by Pragmatix Advisory working with the Centre for Economic and Business Research (CEBR) on behalf of the Community Justice Fund.
It comes as the Treasury is considering how to reduce public expenditure ahead of next month’s Spending Review (SR21) and at a time of deep economic uncertainty for millions of people as the Government’s furlough scheme finishes and it ends the £20 weekly uplift in Universal Credit.
Pragmatix Advisory findings suggest that when people present for free legal advice, they are at a point where things cannot continue as they are. Whatever happens to them past that point incurs a cost to government, with or without the funding for free legal advice.
The research shows that there is a saving to the public purse of £8,000 for every client in receipt of free specialist legal advice. On average, the cost to Treasury of an individual experiencing a legal problem was £14,000 if specialist legal advice was not available, compared to just £6,000 per person in receipt of free specialist legal advice. With around 500,000 people benefiting from free legal advice delivered by organisations supported by Community Justice Fund alone, the total saving to the taxpayer amounts to £4bn
In addition to calculating the fiscal benefits of free legal advice, Pragmatix Advisory estimated the impact that advice will have on an individual’s employability. Data suggests for every client assisted, there will be 0.47 more people employable in their household. Provision of advice for half a million clients will result in 235,000 people remaining in or entering the workforce who would otherwise have been unemployed, with additional income tax and National Insurance contributions of at least £588 million a year.