Source · Select Committees · Foreign Affairs Committee
Recommendation 5
5
Accepted in Part
Paragraph: 15
The Government cannot afford to rely on rhetoric if it is to deliver on its...
Recommendation
The Government cannot afford to rely on rhetoric if it is to deliver on its commitment to tackle illicit finance. Without the necessary means and resources, enforcement agencies are toothless. If the UK is to protect its reputation as a global financial centre, it is essential that legitimate businesses can have trust in the integrity of our institutions. The threat illicit finance poses to our national security demands a response that is seen to be serious. To that end, we repeat the call for a substantial increase in funding and expert resourcing for the National Crime Agency, Serious Fraud Office and other responsible agencies.
Government Response Summary
The government cites the Economic Crime Levy and Spending Review 21 settlement, representing £400 million over three years, including £100 million per year through the Economic Crime Levy. The allocation round will take place this financial year and will include funding for the Suspicious Activity Reports (SARs) reform program, which will increase intelligence capabilities in the National Crime Agency (NCA).
Paragraph Reference:
15
Government Response
Accepted in Part
HM Government
Accepted in Part
The Government notes this conclusion. As mentioned in response to recommendations 3 and 4, the new Economic Crime Levy combined with the Spending Review 21 settlement, represents an overall package of circa £400 million to tackle economic crime over the next three years. This includes around £100 million per year raised through the Economic Crime Levy. The allocation round for the first three years of the Economic Crime Levy will take place during this financial year. The Economic Crime Levy consultation process in 2020 set out that, among other measures, one relevant capability for investment would be the Suspicious Activity Reports (SARs) reform programme. This programme will increase intelligence capabilities in the National Crime Agency (NCA) and the national security community more widely to identify and disrupt the most harmful criminals and serious organised criminal gangs. We are continuing to ensure that agencies including the NCA are adequately resourced to tackle the growing threat of serious and organised crime, including economic crime. The NCA have received a year-on-year increase to their overall budget delegations between 2019/20 and 2022/23, amounting to c.30% by FY22/23. Funding for the Serious Fraud Office (SFO) includes a mechanism that ensures it is supplemented as necessary from the Treasury Reserve for investigative costs. If the costs of a case exceed a certain proportion of the SFO’s annual budget, then additional funding cover is provided. This ensures that the SFO is incentivised to pursue very large and complex investigations. 6 The cost of complacency: illicit finance and the war in Ukraine: Government Response At the 2020 Spending Review, the Government lowered this threshold from 5% to 4% of the SFO’s budget to strengthen this incentive. Between 2020/21 and 2024/25 the SFO will receive around a 10% cash uplift to its core resource budget, building on a 2% increase in 2019/20. The Government’s funding for economic crime also includes £63 million for Companies House to ensure that the Economic Crime (Transparency and Enforcement) Act, and the legislation being introduced in the Third Session, can be operationalised as quickly as possible. Overall, the investment which the Government is making will support the second iteration of the Economic Crime Plan, which will set out the outcomes the private and public sector are working towards and how we intend to measure the impact of our investment.