The National Audit Office (NAO) has criticised the Government’s implementation of its policy to deny criminals the proceeds of their crimes by confiscating their assets.
According to an NAO report to Parliament, government has no overall coherent strategy for confiscation orders and this fundamentally undermines the process for confiscating assets. Decision-makers across the criminal justice system, such as senior police officers, are often not prioritising confiscation. In 2012-13, 673,000 offenders were convicted of a crime, many of which had a financial element, yet only 6,400 confiscation orders were set.
The annual amount of fraud perpetrated by criminals in England and Wales has been estimated by the National Fraud Authority as some £52 billion. On this basis, it has been further estimated that, out of every £100 generated by the criminal economy, £99.65 was kept by the perpetrators.
Without the government knowing what constitutes the overall success of its policy, the bodies involved have no way of knowing which criminals or court cases should be prioritized for confiscation activity. Today’s report also found that appropriate action was not taken early enough in many cases and this, together with out-of-date ICT systems, data errors and poor joint working, hampers the efficiency and effectiveness of enforcing confiscation orders. Forty-five hours a week are taken by HM Courts and Tribunals Service’s regional confiscation units just to enter information manually into multiple systems. There are also numerous data errors, particularly in inputting information after court hearings.
The NAO found that, throughout the criminal justice system, there is not enough awareness of the proceeds of crime and its potential impact. Confiscation orders have a low profile within law enforcement agencies, with low awareness of financial legislation outside specialist teams. This results in many cases not being considered for confiscation.
HM Courts and Tribunals Service, supported by the Crown Prosecution Service and the Serious Fraud Office, works hard to enforce confiscation orders. But, owing to a lack of data and agreed success criteria, it is impossible to make meaningful cost-benefit assessments of the enforcement of different orders. The Courts and Tribunals Service successfully collects 90 per cent of its orders under £1,000, but it is not clear whether this activity on lower-value orders is cost-effective, or whether resources should be redirected towards enforcing higher-value orders.
Where confiscation orders are made and not paid, the main sanctions do not work. Sanctions include default prison sentences of up to 10 years and additional eight per cent interest on the amount owed. The Courts and Tribunals Service found, however, that in 2012, only two per cent of offenders paid in full once the sentence was imposed.
Amyas Morse, head of the National Audit Office, said: “The use of confiscation orders to deny criminals the proceeds of their crimes is not proving to be value for money. The government has not specified a target but only about 26p in every £100 of criminal proceeds was actually confiscated in 2012-13. The fundamental problem is a lack of strategic direction and agreement on what level of confiscation would constitute success. This is compounded by poor information, lack of knowledge, outdated IT systems, data errors and ineffective sanctions. There is a sharp need for a coherent and joined-up cross-government strategy. At the moment this activity cannot be seen as value for money nor as a credible deterrent to crime.”
About the 26p figure
It’s calculated by dividing the £133m collected through confiscation orders in 2012-13 by the National Fraud Authority’s 2012-13 estimate of total fraud of £52 billion, which we use as a proxy for the criminal economy. If all other asset recovery amounts are included, such as cash forfeited, civil recovery, and criminal taxation, covering a further £48m, the amount confiscated increases to 35p in every £100 of criminal proceeds. Visit www.nao.org.uk
