Magistrates are angry that they are being made to carry the brunt of cuts because their workload is being diverted away from the courts.

They say that increasing numbers offenders are being dealt with by “on-the-spot” fines and cautions — almost half of all offences are now dealt with in this way.

Meanwhile, lawyers report crimes being undercharged or simply cautioned, allowing serious offenders to walk away. The workload of magistrates has dropped by an average of eight per cent, while that in the Crown Courts has risen.

John Thornhill, chairman of the Magistrates’ Association, said: “Magistrates are reporting to us cancelled sittings across the country, either because of no work, or disposing of the case out of court.”

But costs were not saved in the long term, he said, because nearly half of such fines went unpaid. “Many of these cases come back to the courts in the end, because the offender has failed to pay,” he said The use of out-of-court penalties has mushroomed. Across England and Wales in the 12 months to last March, only 724,179 of the 1.4 million offenders “brought to justice” actually came before the courts.

The budget for the Courts Service has already been cut from £799 million in 2008/09 to £755 million in 2009/10. The Courts Service will have to make savings in the current three-year spending round of £1.85 million.

So far ministers have succeeded in protecting areas where the crime workload is biggest. But there are concerns about cuts next year. Mr Thornill said: “Cost is affecting the courts’ ability to dispense justice. This cannot be right.”

Ministers are pursuing a policy of making the civil courts pay for themselves by hefty rises in fees charged to people who use them, but magistrates and judges oppose this. Mr Thornhill said: “We do not accept that the court budget should be dependent on income from fines and fees.” Henry Bellingham, Shadow Justice Minister, said: “We have been told that there are to be no cuts in frontline services. Yet the backroom staff are the blood in the arteries of the system. They make the whole thing flow.”

He added that the MoJ was struggling with the problem of “bad settlements with the Treasury”, resulting from the “appalling, fractious relationships between Gordon Brown, when Chancellor, and the then Lord Chancellor, Lord Falconer” .

Ministers and the Courts Service however insist that the savings programme has been a success. Chris Mayer, chief executive of the Courts Service, told The Times: “We are doing everything we can to protect front-line services.”

The target for savings, she said, was procurement, overheads, contractor costs, reviews of projects and programmes. Where staff posts fell vacant they would not be filled automatically.

She added that court sitting days were being increased, both in total number and length.

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