ASSETS RECOVERY AGENCY
Publication of 50th Report of Session 2006-07
Edward Leigh MP, Chairman of the Committee of Public Accounts, today said:
“The Assets Recovery Agency has done a good job in testing through the Courts new powers for recovering the proceeds of crime. The new Serious Organised Crime Agency will be able to use those powers in the future.
“But the Assets Recovery Agency has been successful in little else. It was ill-planned and recovered only about a third of its expenditure. Far too few cases were ever referred to it, its management information systems were in a mess, it prioritised cases badly and it underestimated the time it would take to pursue them.
“The Serious Organised Crime Agency will have to learn from these mistakes. Otherwise few criminals will suffer sleepless nights worrying about losing the proceeds of their crimes.”
Mr Leigh was speaking as the Committee published its 50th Report of this Session which, on the basis of evidence from the Assets Recovery Agency, examined the process of setting up the Agency and using the new powers; how management of cases and monitoring of Financial Investigators might be improved and how performance might be enhanced for the future.
The Assets Recovery Agency was set up in 2003 under the Proceeds of Crime Act 2002 specifically to recover assets from criminals using new and unique powers of civil recovery as well as criminal confiscation and taxation. It was tasked also with promoting financial investigation through the training, accreditation and monitoring of Financial Investigators. After five years in existence the Agency is to be disbanded, from April 2008 at the earliest, with its powers and ongoing cases transferring to the Serious Organised Crime Agency and its training functions to the National Policing Improvement Agency.
The new powers of civil recovery allowed the Agency to recover assets that were the proceeds of crime, even where the owner of the assets had not been convicted of a crime. These powers had to be tested through the courts and the Agency was successful in establishing case law in support of the new powers. Amendments have been made subsequently to the legislation to enable the Agency to recover assets more effectively and efficiently.
The Agency was set up, however, with insufficient preparatory work. There was no business case setting out the expectations for the Agency, resulting in unachievable delivery aims. The Agency is reliant on cases being referred to it by other authorities, as it has no power to instigate investigations. Out of a possible 696 potential referral partners only 129 organisations had referred cases (707 cases in total). Two police forces had failed to refer any cases. The Agency did not develop effective work processes: it failed to keep a comprehensive database of cases referred to it; it did not invest in a time-recording system to manage and monitor staff time and the cost of cases; and it failed to put in place formal and consistent case management processes to enable management to monitor the progression of cases effectively. Receivers’ fees accounted for almost a quarter of the Agency’s budget but the Agency did not introduce fixed price contracts until April 2006. The Agency’s office is in central London, making it heavily reliant on temporary staff, and resulting in high levels of staff turnover.
The Agency had recovered assets amounting to only £23 million by December 2006 against expenditure of £65 million, and it has been unable to meet its target of becoming self-financing by 2005-06. Asset recovery has been slow because in most cases the Agency pursued the full value of the assets through the courts rather than negotiate a settlement for a proportion of the assets. It did not prioritise the higher value cases and those that were more likely to realise receipts. In setting its targets the Agency also under-estimated the time it would take to pursue cases through the courts.
The Agency has not been adequately monitoring the accreditation of trained Financial Investigators, despite its obligation under the Proceeds of Crime Act 2002. It did not know, for example, how many active Financial Investigators should have been completing Continuing Professional Development activities in order to retain their accreditation, and it was not monitoring completion of those activities. The Agency has trained some 4,500 Financial Investigators at almost £700 per place, but by summer 2006 only 1,400 of those Financial Investigators were active in the role.