Proceeds of Crime Act (POCA)

Report: 06
Date: 17 July 2008
By: Assistant Commissioner Specialist Crime on behalf of the Commissioner

Summary

This report is the latest quarterly report of the Payback Programme Board (PPB).

A. Recommendations

That

1. members note the update.

2. That members agree a budget variation of £3,548m in 2008/09, £1.412m in 2009/10, £1.168m in 2010/11 and £0.674m in 2011/12, to be funded from POCA receipts.

B. Supporting information

1. The Finance Committee requested a review of Payback spending on a quarterly basis. This report is the latest quarterly update 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. To best illustrate this performance the Implementation Team have developed a single ‘index’ that equates to the number of cases with a weighting for their value. This is now on the monthly Scorecard for Borough Commanders.

Overall Operational Performance summary
3. POCA starts with current activity, primarily ‘arrests’ of cash or assets, and finishes with the forfeiture or sale of those assets. This process can take three years or longer. The Payback Index is an amalgam of the two elements and gives a single number that equates to the number of offenders affected by POCA powers with a small weighting for monetary value. The idea is that the greater the number of people affected by POCA the greater the deterrent effect of this legislation.
Graph 1

4. In 2007/8 a target of £35 million was set by the MPA for the value of assets identified by the court for seizure. In other words confiscation and forfeiture orders. This target was achieved; this was a 40% increase on 2006/7. This year’s target is £42 million, a 20% increase. There is significant difficulty in predicting the performance outturn at year-end. This is due to the lack of accurate management information within the National Joint Asset Recovery Database (JARD). As a result of their being no national fix in sight, PPB is considering proposals to develop an MPS management information solution. This is intended to allow the MPS to predict in-year operational outcomes and financial income.

5. The confiscation/forfeiture measure of £35 million is an end of process measure. From 1 April 2008, the APACS measures include this figure, the number of orders and measures of current activity, i.e. the number of cash seizures and restraint orders. All figures will be per thousand population. APACS is the Assessment of Policing and Community Safety and is the new performance assessment framework for the police working alone or in partnership, from national and local perspectives. APACS has been developed by the Home Office and succeeds the previous performance framework known as Policing Performance Assessment Framework (PPAF).
The new APACS indicator set came into force from 1st April 2008 and will be used to monitor and assess performance during 2008-09.

6. The past performance (i.e. final court results) of Business Groups in asset recovery is shown below. The sums shown are confiscation and forfeiture court orders imposed, not MPS income.

MPS 04/05 05/06 06/07 07/08
Confiscation & Forfeiture orders (not yet enforced)
Total £16.6m £20.3m £25.2m £35.12m

Source: Joint Asset Recovery Database (JARD)
Specific windfalls have been excluded. These are Regional Asset Recovery Team 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.

7. The MPS exceeded its target relating to number of asset cases (1,000 for 2007/8). There were 227 restraint orders and 2061 cash seizures, making a total of 2288. A target of 2500 for 2008/9 has been set. This reflects the strategic effort to deliver POCA powers locally to maximize impact on volume crime.

8. The Home Office set a national all-agency target of £155 million in the 'tin box' for 2007/8. This target relates to forfeiture and confiscation amounts actually remitted to the Home Office, not the MPS measure of court orders. This target was not achieved and £137 million was received. The Home Office has attributed the shortfall to the detention of cash at borders and the Asset Recovery Agency targets not being achieved. There has been an increase in police performance. The government is concerned that it may not reach its ministerial target of £250m by 2009/10.

Payback to London communities
9. The MPA Finance Committee ratified the proposal for providing funding for community projects through the Safer London Foundation (SLF). The SLF will conduct an auditable bidding process and manage the disbursement of the £0.5m in 2008/9. The Finance Committee will review their use of the funding twice a year.

The Asset Recovery Incentivisation Scheme (ARIS) Funding
10. The target of £35m above is largely composed of orders to pay that have not yet been enforced by the HM Courts Service. The amount deprived from criminals and remitted to the Home Office in 2007/8 is a lower sum, about £18.7m. Half of this (£9.3m) is retained by the Home Office and the remainder is shared with the CPS and HM Courts Service. The MPS share under the ARIS is paid quarterly in arrears and totalled £5,078,184 in 2007/8. The quarterly income in 2007/8 is shown in the table below.

Table 1

Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total 2007/8
£943,914 £1,055,486 £1,432,554 £1,646,230 £5,078,184

11. The MPS income via the ARIS mostly derives from police activity between three and four years ago, i.e. 2003/2005. This is because the Criminal Justice system takes this long to process the relevant criminal cases. This is longer than average because it seems that criminal cases involving criminal assets take longer to resolve than normal cases. Increasing income in 2007/8 reflects investment in POCA in the period 2003/5. This investment was the direct funding of 12 financial investigators by the Home Office (2003) and the establishment of the Home Office funded Regional Asset Recovery Team (2004).

12. The Asset Recovery Incentivisation Scheme will run until 2010. How the money is apportioned was reviewed in January 2008 and the final result of the review is awaited.

13. A reminder of the Home Office proposal being considered is: “a revised split of the 50% going to frontline agencies, with 20% going to investigators, 20% to prosecutors and 10% to HMCS. We (The Home Office) would however topslice all asset recovery receipts (from the 50% share) to protect total enforcement spend; guaranteeing up to £2m to meet the shortfall should HMCS incentivisation receipts fall below £13.5m. In addition, they proposed a £3m/£5m/£7m topslice over the three years to meet some of the costs of the FIU, JARD administration and the SARs transformation regime, recognising that these are central services, and that SOCA is already facing a deficit as an investigating agency and on top of that that is faces a considerably tougher settlement over the CSR period than the police”.

14. This proposal was strongly objected to by the MPS and ACPO. It is wholly inappropriate to fund SOCA to deliver what is core business out of the fund due to its poor CSR settlement. CPS and HMCS would have the majority of their costs covered whereas the police, who are the major contributors, would not. As agreement could not be reached the proposal was to be put to Ministers to make the final decision. This has still not been resolved and the scheme remains unchanged until agreement can be reached.

15. The likely outcome is that the MPS share of the fund will not go down and it may well go up marginally. The original share of enforced confiscation money was 17% under this proposal it would rise to 20%, but the amount of money would be reduced due to the SOCA topslice.

Disbursement of funds
16. The bulk of the budget is still committed to funding Payback posts. In addition to the funded posts, two performance reward payments are disbursed in May and in November. Each disbursement will be of £300,000 to specialist OCUs and £300,000 to BOCUs. This is to be spent in financial year.

There has been a variation in funding for the forecast compared with the MPA record. This was initially an increase of £2.347m in 2008/9, £1.412m in 2009/10, £1.168m in 2010/11 and £0.674m in 2011/12. The 2008/9 total has risen to £3,548m as the original figure did not include the carry forward of £1.2m from 2007/8.

17. The increase in the forecast for 2008/9 relates to:
· £1.2m carry forward of budget from the last financial year.
· Funding an increase in SCD covert infrastructure
· The agreed funding for the Safer London Foundation.
· The central funding of court charges for forfeiture hearings
· The extension of the funding for the POCIT
· The payment for the provision of FI training
· The change in the OCU reward payments for POCA activity

18. In the years 2009/10 the change relates to:
· The agreed funding for the Safer London Foundation.
· The central funding of court charges for forfeiture hearings
· The extension of the funding for the POCIT
· The payment for the provision of FI training
· The change in the OCU reward payments for POCA activity

19. In the year 2010/11, the changes are as above except POCIT funding ceases (currently subject to review).

20. In the year 2011/12, the changes are as above except the Safer London Foundation funding ceases (to be reviewed in the intervening years).

Recommendation:
That members agree a budget variation of £3,548m in 2008/09, £1.412m in 2009/10, £1.168m in 2010/11 and £0.674m in 2011/12, to be funded from POCA receipts.

Abbreviations

ACPO

Association of Chief Police Officers

APACS

Assessment of Policing & Community Safety

ARIS

Asset Recovery Incentivisation Scheme

BOCUs

Borough Operational Command Units

CPS

Crown Prosecution Service

FTE

Full-time equivalents

HMCS

Her Majesty's Courts Service

JARD

Joint Asset Recovery Database

OCUs

Operational Command Units

PIB

 Payback Implementation Board

POCA

Proceeds of Crime Act

POCIT

Proceeds of Crime Implementation Team

PPAF

Policing Performance Assessment Framework

PPB

Payback Programme Board

RART

Regional Asset Recovery Team

SARs

Suspicious Activity Reports

SLF

Safer London Foundation

SOCA

Serious Organised Crime Agency

C. Race and equality impact

No discernible impact has been registered during this quarter.

D. Financial implications

1. A financial spreadsheet is attached at Appendix 1 – Revised cash flow based receipts and actual expenditure on Payback Teams.

2. 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, currently through a dedicated TP team.
• Minimising abstractions from this budget that do not directly improve asset recovery performance.

3. The incentivisation income is apportioned according to the money received at the Home Office, not against the amount ordered by the court. Therefore there is no correlation between the £35 million identified by the court for seizure in 2007/8 and likely income in-year. In other words uncollected confiscation orders do not count towards ARIS. The financial projections are estimates making the assumption that there will be an increase in return through the infrastructure building and the mainstreaming of POCA activity. As it is impossible to estimate the amount of confiscation orders that are collected this is a very inexact science and is being regularly reviewed against actual income. FTE in the forecast is ‘full-time equivalents’. This reflects the actual spend against budget

4. The financial risk is that the income receipts fall below that predicted in the five-year plan. Project governance consists of a monthly cross Business Group Implementation board and quarterly cross Business Group Project Board, chaired by AC SC, with quarterly update reports to Investment Board and MPA Finance Committee. A reduction plan is being prepared starting with the least productive OCUs as assessed by the Payback Index. If this proves to be necessary, there is capacity in the MPS staff turnover to redeploy staff affected.

5. There are some changes to the forecast. These are outlined in paragraphs 17 – 20 above. This is being regularly reviewed against receipts.

E. Background papers

• none

F. Contact details

Report author(s): DCS Nigel Mawer, MPS

For more information contact:

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

Send an e-mail linking to this page

Feedback