Good regulation is key to delivering public trust and confidence in solicitors and law firms. This report shows we have made good progress against our four corporate strategy objectives, although 2023/24 has been a challenging year. We have had to respond to new pressures, with significant shifts in the risks in the legal sector – most notably dealing with the impacts of the increasing number and size of interventions we have had to carry out into larger firms.

In response, we launched our Consumer Protection Review at the start of 2024 – a large programme of work to make sure we can continue to protect consumers, focused on safeguarding client money. Changes in the market have also driven us to move more quickly on work to improve how we manage our data and join up intelligence, so we can better spot risks in the market.

The scale of our Consumer Protection Review means that we have had to look at our plans and reprioritise. This resulted in some projects being delayed, and this has been a significant factor in SRA Limited’s £5.6m surplus for the 2023/24 year (2022/23: £1.4m), with our free reserves within the range set by our Board.

We are in a good financial position underpinned by better performance of our investments. Our consolidated expenditure has increased, but that has nearly all been driven by a large increase in candidates taking the Solicitors Qualifying Examination, which has been funded through their fees.

We will use this year’s surplus to fund deferred programmes of work in the 2024/25 financial year. In addition to expecting to see expenditure exceed income during 2024/25, we anticipate the need for additional investment in our work to better manage data and identify and respond to new and emerging risks. This will be a transformational piece of work that will enable us to regulate more effectively. It will, however, require significant long-term investment – both in people and technology.

If trust and confidence is to be maintained, it is critical that the legal sector is backed by modern and fit-for-purpose regulation, and that we are an open, transparent, efficient and effective regulator. Good governance and financial management are central to that.

We hope you find the contents of this report helpful. More information is available on the SRA website, including regular reporting on decision making and performance. We are always open to hearing your views and your feedback.