The 2026/27 Business Plan and Budget consultation ran for six weeks from 4 November to 16 December, supported by a programme of engagement with external stakeholders throughout that period.
We received a total of 9 responses to the consultation:
As in previous years, responses reflected diverse perspectives on LeO’s performance, its strategic ambitions and the challenges facing the wider legal services sector.
Demand and complaint trajectories for 2026/27 Responses broadly recognised the external pressures shaping demand, though views varied on the scale and certainty of LeO’s projections for new complaints in 2026/27. Several respondents, including consumer groups and some regulators, agreed the projected growth was reasonable given recent rises in contacts and investigations. LSCP considered the projections potentially conservative, citing emerging high-volume consumer issues and the role of AI in lowering barriers to complaining.
Others were more cautious. CILEx Regulation questioned whether increased contacts would translate into eligible complaints, while the CLC warned that pessimistic assumptions risked overbudgeting or masking efficiency opportunities. Professional bodies such as the Law Society and Bar Council did not indicate whether they considered the projections appropriate, noting uncertainty about whether current rises represent a sustained trend or short-term spikes linked to market or regulatory developments.
Feedback also highlighted crosscutting factors likely to influence complaint volumes next year. Regulatory changes – including strengthened first tier complaint handling requirements and the implications of the Mazur judgment – were seen as sources of uncertainty. Delays caused by external bodies, particularly the Land Registry, continue to drive dissatisfaction that is often directed at legal providers. AI featured prominently, with stakeholders noting both its potential to increase access to justice and complaint volumes, and the risks of poorly managed automation. Broader demographic and economic pressures, especially in conveyancing and probate, were also expected to affect volumes.
Scheme Transformation Review Stakeholders generally supported undertaking a review of the Scheme, though views differed on the desired scale and scope. Organisations including the CLC, LSCP, SLC and CILEx Regulation recognised the value of assessing whether LeO’s operating model and legal framework remain fit for purpose given evolving consumer expectations and market changes.
However, expectations for reform varied. CLC and SLC favoured a wide-ranging, forward-looking review capable of significant change, while others preferred a more limited exercise. CILEx Regulation emphasised the importance of a proportionate, tightly scoped review to avoid distracting from LeO’s statutory functions. The Law Society supported only a narrow review focused on operational efficiency, and the Bar Council did not support the proposal as set out, raising concerns about cost and likely value.
Views also differed on whether legislative change should be explored. Some respondents pointed to existing statutory constraints, while the Law Society sought clarity on what limitations currently apply before considering Legal Services Act reform. Opinions on revisiting case fees and transparency were similarly mixed: some noted that recent consultations had already addressed aspects of case fee reform, while consumer groups stressed the importance of transparency in improving sector accountability.
LeO’s strategic objectives Stakeholders broadly supported the proposed activities set out for 2026/27 under LeO’s service and impact objectives, though with varying expectations for delivery.
Service objective There was strong consensus that improving timeliness and quality of complaint handling remained LeO’s core priority. The Law Society, Bar Council and CILEx Regulation highlighted the need to reduce waiting times, improve investigation performance and address the backlog of cases awaiting investigation. Several respondents welcomed progress through early resolution, digital transformation and triage, though some stressed the need for greater efficiency and proportionality in resource allocation.
Consumer representatives supported the proposals but emphasised the importance of transparency, including publication of full ombudsman decisions. While recognising recent improvements, many noted that consumers still face long waits and expect meaningful progress in 2026/27.
Impact objective There was broad support for work aimed at reducing demand at source through learning, insight and collaboration with regulators.
The CLC, CILEx Regulation and SLC particularly emphasised using insight to strengthen first tier complaint handling, improve communication and identify emerging risks. LeO will also use the horizon scanning insight provided through the consultation on potential drivers of demand to shape and prioritise its 2026/27 learning and insight deliverables, ensuring they are targeted to prevent complaints arising or support effective early resolution.
As with previous years, a small number of concerns were raised about the scale and cost of this activity. The Bar Council questioned whether the proposed range of publications represented the best use of resources and sought clearer evidence of impact. Respondents agreed that insight should be targeted and actionable, with a focus on specific practice areas.
Feedback on the budget proposals Views on LeO’s recommended budget option for 2026/27 (11.1% - Option 3 in the consultation) were mixed.
The table below summarises the responses we received, and the support received for each budget option:
Notably, organisations including the LSCP, ACSO, and SLC were broadly supportive of Option 3, with some responses noting that without additional investment LeO could not maintain service standards amid rising demand.
Others were more wary. The CLC accepted Option 3 but raised concerns about sustainability and value for money. Professional bodies including the Law Society, Bar Council and CILEx Regulation did not support the proposal, citing recent above inflation increases and the need for clearer evidence of performance improvements linked to previous uplifts. Some queried expenditure on what they saw as noncore activities and sought clarity on the balance of discretionary and nondiscretionary costs.
Opinions on alternative budget options also varied. Supporters of Option 3 viewed Options 1 and 2 as insufficient to maintain service levels under current pressures, though CILEx Regulation considered Option 2 more proportionate. Option 4 generated the most caution due to its scale and perceived risk unless tied to significant reform through the Scheme Transformation Review.
Views on funding for the Scheme Transformation Review aligned broadly with overall budget positions: supporters emphasised independent oversight and clear scope to ensure value for money, while those opposing Option 3 raised similar concerns about expanding funding for a full-scale review.
Draft Budget and Business Plan 2026/27
