Cree: Bar Council needs to replenish reserves
Barristers are facing a 9.5% increase in the cost of their practising certificates next year, reduced from 13.5% with the Bar Council again planning to use its reserves to mitigate the increase.
A consultation with the profession said this was driven largely by the Bar Standards Board (BSB), which was responsible for 71% of the increase.
The regulator is in the second year of a five-year plan to level up the pay of regulatory staff to the median of other regulators, to counter staff retention and recruitment problems which have in turn affected its performance.
“Since 2021 the GCB [General Council of the Bar] has used its reserves to help mitigate the effect of PCF increases on the profession,” Bar Council chief executive Malcolm Cree wrote.
“The strategy was instigated to try and shield the profession from the recent extreme economic events: Covid, the impact of war in Europe, and cost of living pressures, with the return of high inflation.
“The strategy led to there being no increase in 2021, a 4.5% increase in 2022 and a 5% increase last year. In the same period to this autumn, inflation rose by 21%.
“In the face of the sustained increase in costs, the GCB must maintain and replenish its reserves to provide financial stability. Therefore, mitigation of the required increase will not be as great as in previous years but will still amount to over £1m support from the GCB reserves to mitigate the proposed increase from 13.5% down to 9.5%.”
Practising fees are estimated to generate £21.4m in 2024/25, £2.5m more than in the current year. Just over 70% of this will go to the BSB, with the rest going to the Bar Council for so-called ‘permitted purposes’ – non-regulatory activities which the Legal Services Act 2007 allows it to levy on the profession.
The Bar’s share of the separate profession-wide levy which pays for the Legal Services Board and Legal Ombudsman will be £1.2m.
The BSB began its pay reforms last year in the light of independent advice which showed that it was paying nearly 20% less than the median benchmark for equivalent roles in other regulators.
The “severe difficulty” this was causing was “particularly acute in the investigations team and contributed to the low performance in completing investigations in a timely manner”, the consultation said.
The first year has had an impact. In the year to 31 July 2022, 52% of all external recruitment campaigns failed, but a year on that figure dropped to around 20%. Resignation rates have reduced from 19% to 13%.
“Nevertheless, it is essential to continue with the pay reforms to ensure that we do not lose the ground gained and can continue to recruit and retain people who are competent to deliver our regulatory functions.
“The board believes that the BSB must take pay off the table as a positive disincentive to joining or staying at the BSB if it is to be effective and judges that, to do so, pay at the BSB should be pitched for the medium-term at around the median for comparable regulatory roles.”
Other extra costs highlighted included £74,000 due to an uplift in the daily rate for non-executives “and various other increases across departments”, £46,000 for a new Legal Choices website contribution – after the BSB recently rejoined it – and £49,000 due to switching back to paper exams for Bar students in the wake of evidence of cheating in online exams.
City law firm Fieldfisher is carrying out an end-to-end review of the BSB’s enforcement system and the regulator has allocated £225,000 to implement its recommendations.
An increase of £132,000 in the budget for the BSB’s legal and enforcement department is primarily to meet “anticipated legal defence costs and the increased costs of prosecution of disciplinary tribunals as a direct consequence of our efforts to clear cases under investigation over the past year (which has created a peak in the number of matters referred to tribunal)”.
Another extra cost was £111,000 allocated to the BSB to meet historic liabilities for holiday pay for contractors who are deemed to be workers.
This is likely to refer to a case brought by a barrister, Robin Somerville, who sat as a tribunal chair for the Nursing and Midwifery Council and successfully argued that he was a ‘worker’ and entitled to sickness and holiday pay.
The consultation closes on 5 January.
Leave a Comment