SRA business plan and budget 2024/25 consultation – Law Society response

We’ve responded to the Solicitors Regulation Authority’s (SRA) consultation on its business plan and budget for 2024/25. Our response is in two parts, focusing on the SRA workstreams and budget proposals for the practising certificate fee and Compensation Fund levy.

The SRA’s business plan sets out its planned work for November 2024 to October 2025.

The plan builds on the long-term objectives set out in the SRA’s 2023/26 corporate strategy.

These objectives focus on:

  • setting and maintaining high professional standards
  • supporting the development of legal technology and innovation
  • adopting a risk-based and proactive approach to regulation
  • meeting the needs and challenges of users of legal services and the wider sector
We responded to this consultation in two parts:
  • SRA workstreams (questions 1 to 4 and part of question 8)
  • practising certificate fee and Compensation Fund levy (questions 5 to 8)

Skip to download our full response

The proposals

The business plan 2024/25 reflects the SRA’s four strategic priorities:

  • delivering high professional standards
  • strengthening risk-based, proactive regulation
  • supporting innovation and technology
  • being an authoritative and inclusive organisation, meeting the needs of the public, consumers, regulated professionals, and SRA staff

The SRA’s workstreams for 2024/25 include:

  • deliver the year-three evaluation of the Solicitors Qualifying Examination (SQE)
  • make the SQE available in the Welsh language from January 2025
  • deliver commitments from the SRA’s annual assessment of continuing competence process, including undertaking training record reviews and a thematic review to understand whether and how solicitors meet their professional obligations to maintain competence
  • respond to the Legal Services Board’s guidance around the new regulatory objective to promote the prevention and detection of economic crime, and to changes in money laundering regulations
  • consider the outcome of HM Treasury’s consultation on the future of anti-money laundering (AML) supervision
  • progress the SRA’s work on equality, diversity and inclusion (EDI), including progressing action plans arising from its research findings and continuing to encourage diversity at senior levels in law firms
  • take forward the SRA’s plans to introduce an EDI evaluation framework
  • progress outcomes from the SRA’s consumer protection review, and evaluate key areas of frontline regulation to drive further improvements in quality and timeliness across its operational functions
  • continue to implement and embed improvements to the SRA’s casework processes

The SRA also sought views on its budget, practising certificate (PC) fees and the Compensation Fund.

The SRA proposes that its portion of the practising certificate fee would remain at £162, unchanged from 2023/24.

Our view

The SRA’s priorities

We’re pleased the SRA will continue work on policy areas that align with our priorities, including:

  • the SQE
  • the effective use of the Welsh language in serving law and justice in Wales
  • continuing competence
  • AML
  • EDI
  • consumer protection
  • quality, timely regulation
  • support for small firms with engaging with artificial intelligence (AI) and technology

Work proposed under the SRA’s strategic priorities

As a general principle, we strongly encourage the SRA to renew its focus on core activities and only undertake additional workstreams based on evidence of regulatory need, or specific gaps in responding to consumer needs.

We welcome the continuation of work on the SQE, AML, EDI and technology and innovation – policy areas which align with our own strategic priorities and the regulatory objectives.

We are keen to continue to work with the SRA in these areas, providing insight through our members’ views and experiences.

We encourage the SRA to make sure work is appropriately coordinated to ensure that efforts are maximised and duplication of work is minimised.

This will benefit stakeholders’ budgets, which must be considered in the context of the continuing cost-of-living crisis and financial burdens faced by many sections of the profession, as well as the acute financial issues for criminal and civil legal aid practitioners.

Practising certificate fee and Compensation Fund contribution

We welcome the restraint shown by the SRA in not raising the PC fee, particularly given the substantial rise in the cost of Compensation Fund contributions.

On the Compensation Fund levy, we maintain our position, being supportive of a flat fee for all firms, rather than levy based on turnover, risk profile or some other metric.

The SRA may want to reconsider how it balances the apportionment of the levy between individual solicitors and firms, to satisfy itself that the calculation is as fair as possible, taking into account the interests of various segments of the profession.

We expressed our concerns about the effect the substantial increase in the Compensation Fund contribution could have on small firms in particular, setting out how smaller firms are paying substantially more in contributions than 14 years ago, and larger firms are – relative to small firms, at least – paying proportionally less.

We do not suggest the SRA makes any precipitous changes, but a review of the current arrangements could be useful as part of a broader consultation on consumer protections.

Next steps

The consultation closed on 2 July.

Read the consultation on the SRA website

We look forward to working with the SRA on the issues affecting our members now and in the future.

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