It's no more or less reasonable than applying means-testing for assistance with any other welfare benefits advice and assistance carried out under an LSC contract. Completion of forms generally does not qualify as "legal advice" under an LSC contract - a DLA form, due to its complexity and the fact that a claimant's statements go directly to the legal issue of entitlement, is an exception.
Many agencies have seen their local authority funding cut - or the local authority requiring that they hold an LSC specialist contract before they will consider funding, so for many LSC funding is the only game in town. Without that funding (such as it is) many agencies would be advising far fewer clients or would have shut altogether. Most agencies with LSC funding would currently need each worker to be taking on 6 - 8 new cases each week to meet the contract - when you factor in no-shows and clients who say they are eligible for Legal Help but then turn out not to be, I'd imagine there are very few that can take on additional clients/cases for which they know they will receive no funding at all.
That said, I'm no defender of the LSC or of means-testing, but that particular battle was fought and lost without a fight long ago - i.e. back in '98/'99 when the advice sector generally accepted LSC funding as the answer to local authority budget cuts. There was always going to be a price but very few recognised that - and "pragmatism" when it came to funding, at least amongst management and management committees always won the day even where advisers themselves raised concerns.
But then there's much that has been compromised or lost throughout the advice sector - the Welfare Rights Unit in my own local authority has succesfully bid (against other agencies and, to look at it one way, thereby reducing their funding) for contracts from the local health authority to provide outreach advice in GPs surgeries. Other than through that work (funded by the health authority, remember, not the council) the only clients it will now take on are those who may qualify for DLA/AA. And the reason for that decision is that those clients can then be charged for care services provided by the LA (needless to say, they also charge the maximum allowed under the fairer charging regime). I'm aware that my own local authority is far from being the exception in having such policies.......
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