Professional bodies and consumer groups split over a proposed double-digit rise in LeO funding
The legal profession has delivered a mixed response to plans for a significant budget increase for the Legal Ombudsman, with representative bodies and consumer groups divided over whether the proposed rise is justified by current performance.
The Office for Legal Complaints, which oversees the Legal Ombudsman, has proposed a 12.1% increase in funding for the 2026/27 financial year. If approved, this would take its annual budget to £22.4 million. The OLC says the additional funding is required to address sharply rising complaint volumes and to support plans for future reform of the scheme.
Several early responses to the consultation have accepted the need for additional funding, but many have stressed that this should not be interpreted as approval of the ombudsman’s current effectiveness.
Tom Hayhoe, chair of the Legal Services Consumer Panel, said the service was failing to operate as it should for consumers. He described waiting times as “unacceptably long” and warned that interventions often came too late to deliver meaningful outcomes.
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Despite these concerns, Mr Hayhoe said the panel supported the proposed 12.1% increase. He explained that this was not an endorsement of higher costs in themselves, but a recognition that the proposal was the only realistic option capable of preventing further deterioration in service levels. Without additional investment, he said, delays would increase and consumer outcomes would worsen.
According to figures published by the OLC, average waiting times for a decision fell by 22% in 2025, but still stood at 275 days by the end of the second quarter. During the same period, new complaints increased by 26%, with more than 1,300 additional complaints received in the first two quarters alone. Based on demand levels in the first half of 2025/26, almost 9,000 cases are expected to require early resolution or full investigation.
The Law Society acknowledged that some progress had been made but rejected the proposed budget increase. Its president, Mark Evans, said the backlog of unopened cases was projected to reach 3,754 by March 2026, far exceeding the original target of between 500 and 1,000.
Mr Evans said the ombudsman was failing to meet its own targets and criticised plans to undertake additional work, including a Scheme Transformation Review, while struggling to deliver its core statutory function of resolving complaints promptly.
The Council for Licensed Conveyancers said it accepted the proposed increase with “great reluctance and significant reservations”. While raising concerns about operational efficiency and value for money, it accepted that the additional funding was necessary to avoid further declines in service quality.
A final budget proposal will be brought forward in the new year and will require approval from the Legal Services Board.