Proceeds of Crime Act (POCA)

Report: 9
Date: 11 December 2007
By: by Assistant Commissioner Specialist Crime on behalf of the Commissioner

Summary

This report is the fifth quarterly report of the Payback Programme Board (PPB). The PPB aims to reduce crime by mainstreaming the use of powers under the Proceeds of Crime Act 2002 (POCA). PPB is funding and supporting operational Payback teams on every Operational Command Unit (OCU) using the Home Office Asset Recovery Incentive Scheme (ARIS). Funds have been allocated for new posts across Business Groups against a five-year plan. This report includes:· an update on progress of the POCA plan· proposals for a Payback scheme for communities· a proposal to lobby the Asset Recovery Board to change the ARIS rules.

A. Recommendations

That

1. members note the report;

2. approve a proposed ‘payback’ scheme for communities:

• to use the Safer London Foundation (SLF) as the conduit for community funding from ARIS
• to provide £500,000 yearly from ARIS funding to the SLF
• to maximise the publicity opportunities that this recycling of criminals assets provides
• where ARIS income is above that forecast to satisfy the 5-year plan. An additional 20% of that extra income to be provided to SLF at year-end to a maximum of £500,000 (which would be £1 million including the yearly amount)
• the remaining 80% of income above forecast is to be used to continue to build the MPS infrastructure and to fund MPS led community initiatives
• to publicise the bidding process and outcomes; and

3. note the MPS position on the January 2008 review of ARIS:

• to lobby through the Asset Recovery Board to change the current three-way split of ARIS funding of confiscation money to 28% Police, 14% Crown Prosecution Service (CPS), 8% Her Majesty’s Court Service (HMCS) to more accurately reflect cost.

B. Supporting information

Update on Progress of the POCA Plan

1. Investment Board in August 2006 requested a review of Payback spending on a quarterly basis. This report is the fifth financial review of Payback performance.

2. The purpose of the Payback budget is to reduce crime through mainstreaming the use of powers under the Proceeds of Crime Act 2002. The past performance (i.e. final court results) of Business Groups in asset recovery is shown below. The sums shown are the court orders for confiscation and forfeiture. The 2006/7 targets of £25 million were achieved.

3. An ambitious target of £35m has been set for 2007/8. Analysis of the ‘pipeline’ indicates that the second half of the year should increase the amount of  to meet the 2007/8 targets. It must be stressed that this is based on an examination of cases likely to be concluded in 2007/8 and is not an exact science. The work being conducted will significantly help future analysis of the process. The MPS receives 17% of enforced confiscation orders and 50% of forfeiture orders in ARIS funding.

Table 1: Confiscation/forfeiture figures

Source: JARD
Specific windfalls have been excluded. These are RART orders in 2004/5 for £14.1m and 2005/6 for £10.3m and one TP order for £1.8m in 2004/5. These are one off results that are unlikely to be repeated and distort underlying performance.

POCA Implementation Team (POCIT) update

4. The MPS POCA Implementation Team has now delivered: a properly briefed Payback Superintendent on every Borough, 255 trained Detective Inspectors and Detective Chief Inspectors across the MPS and a performance regime that measures current POCA activities. By this measure, MPS performance has risen by 96% (the half-year ending 30 September 2007 against the same period last year). This is likely to be reflected in ARIS return to the MPS in 2009/10.

5. All POCA performance is simply an output of police investigations into acquisitive criminals, it follows that the SCD is already a high performer in asset recovery terms. Recent capacity building expenditure under Payback has reached Met Intelligence Bureau and other intelligence providers for the first time. POCA is a key part of tackling Organised Criminal Networks (OCNs), particularly the obtaining of restraint orders against the heads and treasurers of OCNs. This is formally assessed by the OCN disruption Panel.

6. There is still a shortfall in POCA infrastructure across the MPS. POCIT estimate that we have achieved just over 62% coverage. To build this to 100% a further £2.4 million would need to be invested in the infrastructure. This would bring the minimum standard of effective FIU staff to all MPS Boroughs with significant specialist coverage.

Proposals for a Payback Scheme for communities

7. The primary function of the POCA legislation is to reduce crime. It provides the side benefit of ARIS funding. This provides an opportunity to increase our infrastructure to maximise the use of POCA as a crime reduction tool. There is also an opportunity to put something back into London communities using this funding. The use of the money to fund community projects presents difficulties in relation to administration. It is necessary to have a fair bidding process, governance, audit and transparency as to how the money has been used. It is not appropriate for the MPS to be involved in this. The SLF offers an auditable process with recognised governance structure. This is the preferred method of providing ARIS funding for community projects.

8. There has been initial consultation with Reshard Auladin at the MPA and with Lee Jasper and Ron Belgrave at the Greater London Authority and there is support for this proposal.

9. In 2006/7 £500,000 from the Payback budget was given to the Safer London Foundation. The SLF has disbursed £225,000 to eleven projects designed to reduce gun and gang crime in London. The remaining funds will be allocated in 2008/9. The PPB is content that the SLF is a properly accountable, independent custodian of Payback money. There is an opportunity for the SLF and POCIT to send the message that money removed from criminals is funding community projects under the Payback banner. The key advantage of using the SLF is that it will conduct an auditable bidding process, manage the disbursement of funds and capture outcomes.

10. Following on from the consultation the following is proposed:

• to use the SLF as the conduit for community funding from ARIS
• to provide £500,000 yearly from ARIS funding to the SLF
• to maximize the publicity opportunities that this recycling of criminals assets provides
• where ARIS income is above that forecast to satisfy the 5-year plan. An additional 20% of that extra income to be provided to SLF at year-end to a maximum of £500,000 (which would be £1 million including the yearly amount)
• the remaining 80% of income above forecast to be used to continue to build the MPS infrastructure and to fund MPS led community initiatives
• to publicise the bidding process and outcomes.

11. The additional funding is dependent on the MPS income exceeding the current estimates. The proposal guarantees the SLF £500,000 each year for the duration of the ARIS funding. This enables the Foundation to plan ahead. The SLF decisions on disbursement will be transparent and can be periodically reviewed. BOCUs in receipt of reward funding from ARIS through PPB, can already use this funding for local community projects. Any such use will be captured so that a comprehensive report of how ARIS has been used to fund community projects can be reported at year-end.

12. This proposal was agreed at Investment Board on 26 November 2007.

The January 2008 review of ARIS

13. The position regarding ARIS is that the scheme is to run until 2010 as part of the plan to achieve the £250 million ‘tin box’ target. In January 2008, the 17% three-way split between Police/CPS and HMCS is to be reviewed. The ACPO position is that Police costs relating to POCA are higher than the other partners and that Police have invested their ARIS return in POCA activity to reduce harm, which also increases income opportunity.

14. The whole MPS Programme is dependent on income from the ARIS. In 2006/7, this was composed of cash forfeiture income (45.1%), confiscation income (41.8%) and civil recovery income (3.1%). The confiscation income is our share of an equal split between the MPS, CPS and HMCS. This is despite the Home Office estimate that the cost to the three partner agencies of obtaining the orders is 56% (police), 28% (prosecution) and 16% (court enforcement). The PPB view is that the Home Office should adjust the three-way split to reflect actual cost. The PPB is content with the original Home Office estimate.

15. It is proposed that the MPS lobby through the Asset Recovery Board to change the current three-way split of ARIS funding of confiscation money to 28% Police, 14% CPS, 8% HMCS to more accurately reflect cost.

Abbreviations

ACPO

Association of Chief Police Officers

ARIS

(Home Office) Asset Recovery Incentive Scheme

CPS

Crown Prosecution Service

HMCS

Her Majesty’s Court Service

OCNs

Organised Criminal Networks

OCU

Operational Command Unit

POCA

Proceeds of Crime Act

POCIT

Proceeds of Crime Implementation Team

PPB

Payback Programme Board

SLF

Safer London Foundation

C. Race and equality impact

A Race and Community Impact Assessment has been conducted by the Implementation Team and concerns about disproportionate targeting of specific elements of the community have been the subject of detailed review. PPB is satisfied that no discernible impact has been registered. The crime reduction impact of making payments to communities from this fund will be assessed and a timetable for making future payments will be agreed in conjunction with the MPA.

D. Financial implications

1. A financial spreadsheet is attached at Appendix 1 – Revised cash flow based receipts and actual expenditure on Payback Teams. Previous cash flow sheets have been based on ‘best-guess’ based on estimated enforcement rates and estimated likely orders made. The new cash flows are based on the receipts from the Home Office. There is a significant slowdown in the pipeline of cash seizure cases through the court system. This means that there are a large number of cases still to conclude as forfeitures. This is a stockpile of potential future income (currently estimated at £10.4m in Forfeiture alone, excluding the Confiscation regime).

2. The disbursement of funding to the SLF will be the subject of three-monthly review by Investment Board.

3. Improving the income stream from asset recovery depends on:

• ensuring that the Payback budget is spent on asset recovery
• the development of dedicated ring-fenced teams across Business Groups
• the effective enforcement of confiscation orders, through a dedicated Emerald team
• minimising abstractions from this budget that do not directly improve asset recovery performance. There are a number of budget items that fall into this category. These are: charitable donations, baseline support and any bids that do not pay for new asset recovery personnel.

4. The funding will be dependant on POCA performance. Where any funded area is not performing against the agreed measures the funding will be withdrawn.

5. The income from incentivisation will be monitored by the Programme Board and, if it falls below projection, remedial action can and will be taken to reduce the expenditure. A plan to descale the project is being prepared to identify what will cease first. The Director of Human Resources has agreed that up to 100 created posts could be managed in the MPS staff turnover. Any such falloff in income will be reported to Investment Board. There is always the risk that the Home Office will remove this funding, but there are very tight performance targets that the Home Office need to meet. The ‘tin box’ target set for this year is £155 million where a target of £125 million was just achieved for 2006/7. The Home Office are aware that without the ARIS funding this target is unlikely to be met.

E. Background papers

None

F. Contact details

Report author: A/Commander Nigel Mawer. MPS

For more information contact:

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

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