Memorandum submitted by the Institute
of Chartered Accountants in England and Wales
INTRODUCTION
1. The Institute of Chartered Accountants
in England and Wales (the "Institute") is pleased to
submit evidence to the Home Affairs Committee, on the issue of
police funding.
2. The Institute operates under a Royal
Charter, working in the public interest and has been a leading
contributor in the policy debate over the fight against financial
and economic crime over the last decade or longer. As an accounting
professional body, we are particularly aware of the damaging social
and economic effects that are caused by money laundering and other
financial crime. As the largest accountancy body in Europe, the
Institute's 128,000 members run and advise businesses of all sizes
across virtually every economic sector.
POLICE FUNDING
AND TARGETS
FOR COMMUNITY
SAFETY AND
JUSTICE
3. We support the increase of appropriately
targeted investment in policing, and are concerned over the implications
of a possible tighter funding settlement for the years 2008-11.
We are not convinced that the current effort put into the fight
against economic and other very remunerative crime is sufficient
to provide an appropriate disincentive to the growth of both organised
and opportunistic crime. UK citizens are the victims of economic
crime directly (as for example with identity theft) or indirectly,
through increased costs, a damaged economic and social environment
and in some cases through the bankrupting of their employer.
4. The Institute has been heartened by some
recent initiatives taken by the Government in the fields of financial
and economic crime. These include the continuing reform of the
money laundering reporting system (including the improvements
following the Lander Review); the reform of the law on fraud and
the conclusions of the Fraud Review; and the recent Government
initiatives on foreign corruption. These reforms have our full
support and we commend their continuation and implementation.
But they will not be fully effective, if they do not have sufficient
funding or the undivided support of the rest of the criminal justice
community.
5. In the criminal justice system it is
vital, in our view, that there are no areas where it is believed
that profitable crimes can be committed at low risk of detection;
no areas of crime which if they are detected are at low risk of
prosecution: and no areas of crime which if prosecuted are at
low risk of a level of sentencing which matches the measure of
the scale or profitability of the crime. To provide funding, or
set targets, which are insufficient to cover large areas of profitable
crime will inevitably tend to produce just such an effect. This
will lead to persons who would not otherwise be tempted to commit
crimes doing so, in the belief that the risks to themselves are
insignificant. Organised criminals will build and grow their enterprises
where there are highest returns for the lowest risk of punishment.
The long term effects of inadequate funding or targets for the
criminal justice system will therefore be likely to be cumulative
and very serious.
6. We believe that the current targets for
the criminal justice system are inadequate, in that:
— they lead to neglect of crimes
against business, which are not measured by the British Crime
Survey, and have no specific targets against which their crimes
are recorded;
— they lead to neglect of financial
and economic crimes, since these tend to cause less fear than
more physical crimes, though they still cause untold distress
and hardship, besides the economic and social damage caused locally
and nationally. Nor do they address the injustice of the fact
that reparations for loss are rarely made; and
— they lead to neglect of complex
crimes, by setting the targets without allowance for the fact
that some crimes are inevitably more costly than others to investigate
and prosecute, but should still not be able to be committed with
apparent impunity.
PRIORITIES IN
POLICE AND
OTHER FUNDING
OF DETECTION
AND INVESTIGATION
7. We understand the key importance in police
funding of giving the highest priority to community safety. However,
though economic and business crime is sometimes perceived as being
of relatively low political importance, it has a very damaging
effect, both socially and economically.
8. Our preference would be for a proportionate
increase in the funding available to the police for the fight
against economic crime, including through the use of the confiscated
proceeds of crime. Indeed, we are strong supporters of the rigorous
use of confiscation, together with the restitution of the proceeds
of crime to its legitimate owners (where these exist) to help
negate adverse economic effects, as well as for its punitive effect.
9. Government funding is not the only way
in which the fight against economic crime can be effectively financed.
Innovative means of furthering police commitment to the fight
against all crime should be constantly under consideration and
best practice should be disseminated generally. One such way is
the use of a partnership approach. Effective partnerships have
been set up between the Metropolitan Police and private sector
trade bodies, in the fields of credit card fraud and insurance
fraud, which enables private sector funds validly used in minimising
commercial losses, to also be effective in reducing the potential
funding of organised crime and terrorism. The City of London Police
effectively harness private sector cooperation, in balancing the
needs of commercial organisations in recovering the proceeds of
fraud with the public sector priorities for its prosecution. The
lessons learned from these approaches need to be better disseminated
and followed.
10. The criminal justice system might also
be targeted with working in partnership with other Government
agencies. This might include, for example, with the DTI in instances
of business closure where illegality is a factor or with the FSA
or OFT in cases of illegal sales practices. More generally, however,
the DTI (or its successors) should be better involved in working
with the police, in the achievement of their general objectives
of the creation of conditions for business success and helping
the UK respond to the challenge of globalisation.
9 May 2007
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