The number of family law cases involving children in which neither party has legal representation has nearly doubled in the last year.
The National Audit Office found that cases without lawyers can take 50% longer which has the knock-on effect of increasing costs to the taxpayer.
The findings come weeks after a senior judge accused the government of washing its hands of the problem it had created by failing to provide legal aid for parents in child custody cases.
The report says over 17,000 cases involving contact with children where both parties represented themselves started in the family courts in 2013-14, an increase of 8,110, or 89%, on the previous year.
The Legal Aid, Sentencing and Punishment of Offenders Act 2012 reduced the range of issues for which civil legal aid was available and changed financial eligibility criteria for receiving assistance.
The auditors’ report said the MoJ had failed to think through the impact the changes would have on the wider system.
Margaret Hodge, who chairs the Commons public accounts committee, said: “[The Ministry of Justice] is meeting its objective of cutting spending on civil legal aid, but it is doing this without knowing what the knock-on effects might be for other organisations and people needing advice. It is out of touch with reality and has shown no understanding of the wider cost of its reforms.”