Proceeds of Crime Act (POCA)

Report: 7
Date: 21 September 2006
By: Commissioner

Summary

Disbursement of Proceeds of Crime Act Incentivisation Scheme monies.

A. Recommendations

That members

1. Note the report;
2. Agree the budget allocations as outlined at Appendix 1 and the associated budget virements.
3. Agree the transfer of unspent POCA receipts at the end of the financial year to balance sheet reserves

B. Supporting information

Background information

MPS performance

1. The POCA (2002) presents a major opportunity for the MPS to be more effective against acquisitive criminals, particularly volume criminals dealt with by BOCUs but also more serious and organised criminals dealt with by SCD and other specialist units.

2. The strategy to ‘mainstream’ the use of POCA powers is being taken forward by the Payback Programme Board, chaired by AC House. Commander Wilkinson chairs the Payback Implementation Board and the Payback Disbursement Panel. All of these groups have pan MPS membership where all the business groups are represented with MPA oversight. These strategic meetings are supported by a dedicated Proceeds of Crime Implementation Team (PoCIT). A number of sub groups have been set up by the PoCIT involving practitioners to look at training, awareness, innovation, partnership and performance. Key issues identified include the need for an effective communication strategy and identified POCA Champions on every B/OCU.

3. Financial Investigation Management (FIM) training courses have been established in conjunction with the Asset Recovery Agency (ARA). Since May 2006 seventy-two MPS managers, mainly DCI rank, have received training with further monthly courses fully booked for the foreseeable future. The MPS has 110 staff working in asset recovery with a further five hundred accredited investigators qualified to obtain information from the financial sector to further criminal enquiries.

4. The performance of the MPS in asset recovery has been improving year on year since 2001. In 2004/5 the number of people from whom assets were recovered by the MPS has increased from 347 in 2005/6 to 590 in 2006/7, an increase of over 70%. In terms of confiscation and forfeiture orders made by the Court the MPS has increased the value of asset recoveries from an average of £7m prior to POCA (2002) to a record £35.2m in 2005/6. It is important to remember that these orders are still pending enforcement by HM Courts Service (see ‘Confiscation enforcement’ below).

Disbursement of POCA incentivisation funds

5. In order to encourage the police to tackle crime using POCA, the Government has recycled half of the resulting receipts into a ‘ Police Incentivisation Scheme’. The MPS earned a 30% share of this national scheme in 2006/7, based on our POCA performance in 2005/6. This equates to £7.9m available for MPS incentivisation in 2006/7. Other agencies are also now included in the scheme. The scheme runs until March 2008 and is currently being reviewed by the Home Office, as recommended by a recent review of UK asset recovery by the Prime Minister’s Delivery Unit.

Funds available

6. The scheme changed on 1 April 2006 to permit immediate recycling of half of current receipts, this means an income stream of between £450,000 and £1m per quarter in addition to the lump sum of £7.9m already received. In effect this gives the MPS a one-off bumper year for incentivisation funding.

Spending guidance

7. The Home Office recommends that Incentivisation income be spent on the following:

• Additional Financial Investigators
• Training
• Specialist team budgets
• Internal incentivisation schemes
• Community projects

Business group bids

8. In order to make most effective use of these funds, each Business Group within the MPS was invited to submit a bid, with supporting rationale, to POCA Programme Board. Due to the large sums involved the bids were referred to the MPS Investment Board (IB), sitting on 22 August, for a decision.

9. The Business Group bids are shown in the shaded area of the attached spreadsheet. In summary they area as follows:

• CO £1.4m
• SCD £3.6m (including SCD10 Interception bid)
• DPS £280k
• SO £364k
• TP £3.2m

10. It is proposed to donate £500k in year 2006/7 to the Safer London Foundation charity for disbursement to community groups and initiatives.

11. £835k pa is designated for reward and incentivisation funding.

12. The POCIT is funded £837k for two and a half years to end March 2009.

13. £3m is allocated to SCD baseline budget 2006/7 reducing to zero thereafter.

Total: in excess £13m.

Investment Board decision

14. The decision of Investment Board was that the received bids be funded to 80%, with the proviso that Assistant Commissioner House reviews the bids to ensure they meet Home Office guidelines and that the Home Office limit of 50% is challenged. Also, that Investment Board will review and monitor the Incentivisation cash flows each quarter and take corrective measures as appropriate and finally, that AC Specialist Crime should retain the POCA policy lead and chair the POCA Programme Board.

15. The spreadsheet attached indicates the forecast cash flows resulting from the Investment Board decision, though the quarterly review by Investment Board will address emerging anomalies.

Health warning

16. The cash flow projections, whilst based on current information, represent an informed guess at what the future might hold. As ever, there are any number of unforeseen events that could conspire to render the best projections redundant. In addition to changing policing priorities the Government could, if so inclined, halt or re-design the incentivisation payment scheme. However, should funding be withdrawn Martin Tiplady has indicated that up to 100 staff funded by POCA could be accommodated in the organisational ‘churn factor’. In order to manage the cash flow process it is suggested that Investment Board review the position on a three monthly basis.

Proposal

17. There is only one proposal, which is to fund the Business group bids to eighty percent with a view to working towards full funding via regular reviews of the financial position. The current forecast shows a credit of £3.2m in five years time.

• Appendix 1. represents maximum income from enforcement, funding an enforcement team and payment of all Business Group Bids to 80%. This option includes the MPS funding the London RART from 2008/9. Resulting in forecast ending with a credit of £3.2m.

POCA infrastructure

18. The aim of the POCA project is to reduce crime by ‘mainstreaming’ the use of POCA as laid out in the HMIC report ‘Payback Time’. In particular the aspiration is to build ‘Payback’ units on every B/OCU so that acquisitive criminals are routinely deprived of their assets in the course of local police activities.

Confiscation enforcement

19. There remains a major challenge in collecting confiscation money as part of enforcing court orders. In November 2005 there was £21 million in uncollected confiscation orders. It is likely that this figure has grown since that date. The level of uncollected or un-enforced confiscation orders is currently running at about fifty percent or, put another way, we could, potentially, double confiscation incentivisation by improving enforcement. Bid 78 on the attached spreadsheet relates to the police part of a multi-agency collection force that could add several million pounds to the MPS incentivisation pot.

Freedom of Information Act (FoIA)

20. There is currently an FoIA request from a prominent local newspaper requesting details of POCA activity by BOCUs and details of how any incentivisation has been spent. This type of request can be expected to increase as the profile of POCA grows. It is therefore essential that robust auditing and ethical expenditure is both mainstreamed and maintained through the POCIT team and dedicated lead accountant.

Abbreviations

AC

Assistant Commissioner

ARA

Asset Recovery Agency

BOCU

Borough Operational Command Unit

CO

Central Operations

DCI

Detective Chief Inspector

DPS

Directorate of Professional Standards

FIM

Financial Investigation Management

FOIA

Freedom of Information Act

HMIC

Her Majesty’s Inspectorate of Constabulary

IB

Investment Board

MPA

Metropolitan Police Authority

MPS

Metropolitan Police Service

POCA

Proceeds of Crime Act

PoCIT

Proceeds of Crime Implementation Team

PMDU

Prime Minister's Delivery Unit

RART

Regional Asset Recovery Team

SCD

Specialist Crime Directorate

SO

Specialist Operations

TP

Territorial Policing

C. Race and equality impact

There are no direct race and equality impacts arising from this paper however, the Home Office lay out clear rules as to disbursal of funds and that the MPS Investment Board and the POCA Programme Board oversees the allocation of funds.

D. Financial implications

The financial implications are outlined within the paper and associated Appendix 1. It will be necessary to approve formal budget virements for the budget expenditure for new schemes as shown in Appendix 1. At the financial year end and it will be necessary to transfer any unspent POCA receipts to balance sheet reserves in order that the income is not subsumed into the revenue account.

E. Background papers

None

F. Contact details

Report author: Trevor Shepherd, Detective Superintendent, SCD 6, MPS

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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