Income and expenditure

Overview

The CLC is a pure regulator; we do not have a representative function. All our income is generated from the regulated community and is utilised in the performance of our regulatory obligations.

At 31 December 2021, the CLC regulated 223 practices (2020: 223). These practices have a combined turnover of £276m (2020: £268m).

At the end of December, the CLC had 1,499 (2020: 1,414) active CLC lawyers (Licensed Conveyancers and Licensed Probate Practitioners) on the register.

Budget and billing arrangements

The CLC’s financial year runs from 1 January to 31 December. The budget for 2022 was approved by Council on 10 February 2022, a summary of which is included below. The CLC has operated a deficit budget since 2019 to release excess cash reserves.

In 2021 the LSB approved a revised billing arrangement which included a new fee called the OLC levy which will be ring fenced for the collection of the cost recharged to the CLC by the Legal Ombudsman. In previous years the CLC collected a Practice Fee (levied on regulated practices based on a % of turnover) and Individual licence fee (a fixed fee levied on regulated individuals). These two revenue streams were used fund the CLC operating cost and the Legal Ombudsman costs. From 2022 the practice fee and Individual licence fee will only be used to fund the CLC operating costs and not the Legal Ombudsman cost which will be recovered through the new OLC Levy.

Income in 2022 and 2021

Regulated practices pay an annual fee to fund the work of the CLC and make a contribution to the Compensation Fund. Both are based on the firm’s turnover. Individuals also pay a fixed licence fee.  In 2022 a new OLC levy was introduced to recover the OLC costs allocated to the CLC.

The pie chart below illustrates the budgeted revenue sources for 2022. Total revenue for 2022 has been budgeted at £3,15m.

The revenue received or accrued for 2021 (provisional and unaudited) is included below. The Compensation Fund income includes aged balance receipts from practices which are not included in the budget due to uncertainty in the amount and timing of receipts. Total revenue received for 2021 was £3m.

Operational expenditure 2022 and 2021

The CLC only undertakes the regulation of specialist conveyancing and probate lawyers. We are not engaged in any other activity. Accordingly, all our expenditure arises from our regulatory responsibilities, as overseen by the Legal Services Board. Our budgeted and actual Operating expenditure for 2022 and 2021 is set out in the charts below.

Compensation Fund expenditure 2022 and 2021

The Compensation Fund revenue and expenditure are ring fenced from the operational income and expenditure. Expenditure for the compensation fund is restricted to cost for the running of the fund and paying grants.

The chart below summarises the budgeted expenditure for the Compensation Fund for 2022. We do not budget for Compensation grants because of the uncertainty of timing and value of claims.

The Actual expenditure on the Compensation Fund for 2021 is summarised below.