Recommendation 48

HM Government Acknowledged

The government recognises the need for increased spending to tackle economic crime. That is why we have legislated for a new Economic Crime (Anti-Money Laundering) Levy which will raise around £100 million per year to help fund anti-money laundering measures.7 In line with the principle of transparency set out by the Levy consultation document, the government intends to remain accountable for the spending of the money raised by publishing an annual report on the levy, in addition to a more wide-ranging review of the levy by the end of 2027. These mechanisms will provide transparency to industry and levy payers on how the policy is performing, including how the money is being spent. The Levy, combined with funding announced at last year’s Spending Review, collectively represents a package of around £400 million to tackle economic crime until 2025. For example, the government is delivering reforms set out in the Economic Crime Plan with approximately £100m to be spent on tackling fraud specifically. Among other measures, this investment is intended to deliver Suspicious Activity Reports (SARs) reform and support efforts to tackle illicit finance. This investment will increase intelligence capabilities in the National Crime Agency (NCA) and the national security community to identify and disrupt the most harmful criminals and serious organised criminal gangs. It will also establish a new fraud investigative function in the NCA. We are also increasing law enforcement investigative capacity in the City of London Police, as national lead force for fraud, and in Regional Organised Crime Units across England and Wales. The government also recognises the importance of delivering Companies House reform. HM Treasury has therefore provided BEIS with £63 million over the Spending Review period to facilitate reforms. This funding will ensure that the Economic Crime (Transparency and Enforcement) Act, and the legislation being introduced in the Third 7 Economic Crime (Anti-Money Laundering) Levy - GOV.UK (www.gov.uk) 6 Economic Crime: responses to the Committee’s Eleventh Report Session, can be operationalised as quickly as possible. In addition, £5.4 million of Official Development Assistance (ODA) funding has been allocated across the Spending Review period to support the work of HM Treasury’s Illicit Finance Technical Assistance Unit. It will also provide additional support to the work of the FATF and FATF-Style Regional Bodies. This funding will help to tackle international illicit finance by strengthening the implementation of the FATF Standards in ODA-eligible countries, in concert with partners. We recommend that the Government provides a breakdown of how the additional funding allocated to the Home Office in the Spending Review for fighting economic crime will be spent, and how much of that funding will reach crime-fighting agencies. The financial resources being brought to bear on the problem are fragmented and modest when compared to the losses attributed to fraudulent activity. Given the scale of the problem and the speed at which it is growing, we remain to be convinced that this extra resource will enable a sufficient response in the absence of a substantial reform of the anti-fraud infrastructure.