Reducing Modern Slavery inquiry

The Home Office has no means of monitoring progress or knowing if its Modern Slavery Strategy is working and achieving value for money. When it introduced the Modern Slavery Strategy in 2014, the Home Office’s (the Department’s) objective was to reduce significantly the prevalence of modern slavery. Yet its only estimate of the prevalence of modern slavery dates back to 2013 and it has not attempted to estimate prevalence since then. The Department did not set up its modern slavery activities as a coherent programme with an all-encompassing governance structure. It has not set measures or targets for what success looks like for the strategy across the system, or identified clear roles and responsibilities for all organisations involved. Nor does the Department know how much money is spent across government on tackling modern slavery, so it cannot prioritise where funding is spent or assess how effective different elements of its strategy are. It needs to learn from other programmes such as tackling domestic violence where improved referral processes have led to increased instances of reporting and police intervention. Recommendation: In order to effectively track whether its Modern Slavery Strategy is working and prioritise funding and activities, the Department should set targets, actions, a means of tracking resources, and clear roles and responsibilities within the programme and report back to us by December 2018.

There are gaps in Department’s understanding of modern slavery in the UK which could impact on prevention work. Progress in understanding the crime has been slow since the introduction of the Modern Slavery Strategy. However, modern slavery has been a priority for intelligence-gathering since November 2016. Government has established the Joint Slavery and Trafficking Analysis Centre (JSTAC), a multi- agency strategic intelligence centre, and published a typology of modern slavery report. The National Crime Agency’s understanding of victims and their countries of origin is improving as a result but the landscape continues to evolve and all the agencies involved must make certain they understand the changing make up of victims to aid them in prevention work. Recommendation: The Deparment should continue its work to gain a better understanding of the crime, the victims and the perpetrators, in order to target its prevention work effectively. It must take account of the potential impact of other factors such as the exit from the EU.

The Department’s hands-off approach to businesses’ compliance with its transparency in supply chains legislation is not working. The Department introduced a requirement as part of the Modern Slavery Act 2015 for businesses with an annual turnover of more than £36 million to publish a statement setting out the steps they have taken to ensure that modern slavery is not taking place in their businesses or supply chains. The Department does not have a list of the businesses that the requirement applies to or know how many have produced a statement. It does not monitor whether statements comply with the legislation and has never used its powers to penalise companies that do not comply. This is important to develop prevention mechanisms within supply chains before someone is trafficked. Instead, the Department relies on NGOs, investors and consumers to monitor compliance, including two NGO managed registries of statements. This approach is clearly not 6 Reducing modern slavery working, as compliance with the legislation is low, with only an estimated 30% of businesses required to publish a statement having done so. Even for those companies that have produced a statement there is a risk that it is merely a tick-box exercise. Recommendation: The Department should take immediate action to ensure that its Transparency in Supply Chains legislation is more effective. It needs to drive up compliance, by actively administering and monitoring compliance and should write to us by April 2019 setting out what progress it has made and its latest estimate of compliance and demonstrating how this is improving transparency. The Department should consider publishing itself a list of companies who have complied and not complied with the legislation, rather than relying on NGOs to police the system.

Reform of the National Referral Mechanism has taken too long and the current system does not allow government to understand and deal with modern slavery effectively. The Department reviewed the National Referral Mechanism (NRM) in 2014 and found it was inefficient and needed to be redesigned. However, over three years later it has not yet implemented any changes to improve the process. The NRM process is inefficient, which leads to long waits for the victims. The system does not enable the Department to analyse the data it contains to better understand modern slavery as a crime; for example, it is not able to undertake analysis to understand the businesses and sectors where prevalence of modern slavery is highest in order to identify where to focus its attention and develop prevention strategies. The NRM does not capture what happens to victims after they leave the NRM, and so the Department does not know whether victims have been re-trafficked. The Department is currently digitising the NRM and expects the new system to be fully functional by January 2019. Recommendation: By January 2019 the Department should ensure that the reformed NRM system enables it to collect and analyse data to understand the crime, the businesses and the sectors where prevalence is highest, and, where victims consent, to understand what happens to victims after they leave the NRM.

We are very concerned that victims are waiting far too long to receive National Referral Mechanism decisions, causing distress and anxiety to vulnerable people, and increasing the costs of the victim care contract. The Department does not have a target for when it will make a final (conclusive grounds) decision on NRM referrals, although it states that a decision will be made as soon as possible after the 45-day period in which victims are entitled to receive support after they have received an initial (reasonable grounds) decision. The average length of time for adult conclusive grounds decisions was 134 days in 2016. Potential victims are therefore waiting far too long to receive a decision, causing distress and anxiety to vulnerable people. As the Department cannot enact a negative asylum decision until it has made an NRM decision, this also causes delays for potential victims who have made asylum applications. Delays in NRM decision making have also increased the cost of the Department’s victim care contract with the Salvation Army, because support is being provided for much longer than the Department assumed would be necessary when letting the contract. The Department now estimates that the cost of the five year contract to 2020 will be around £90 million, more than double its Reducing modern slavery 7 early estimates. The Department acknowledges that the lack of targets for conclusive decisions is “deeply unhelpful and damaging”, and intends to establish targets as part of its NRM reforms. Recommendation: Within six months, the Department should write to us setting out what actions the competent authorities are taking to reduce the time potential victims wait for a decision, and how the reformed NRM will reduce decision making times further, including what the target time for a conclusive decision will be.

In the absence of clear care standards and an inspection regime, the Department has no way of knowing that victims are receiving adequate care. Adult potential victims of modern slavery who have been referred to the NRM are entitled to receive support through the victim care contract, which is currently delivered by the Salvation Army and its twelve subcontractors. The Department has not put in place any care standards or a robust inspection regime to check the quality of care and support provided in safe houses. In October 2017 the Department announced it would adopt the Human Trafficking Foundation care standards which were developed in 2014, but these will not be in place until the new care contract is let in

The extreme variation between police forces’ referral rates suggests that some forces are not treating modern slavery as seriously as others. The three police forces with the highest number of adult referrals of potential victims have made more than 900 referrals since the NRM began in 2009, while six police forces have made fewer than 10 referrals each in the same period. The variation in police reporting of modern slavery crimes is more acute than for other types of crime. Only 6% of the crimes recorded in the year to March 2017 led to summonses or charges, and while prosecution rates have increased in the last year they are still low. Improving police forces’ response to modern slavery requires better management and awareness amongst forces and other stakeholders. The Department is currently spending £8.5 million from the Police Transformation Fund to improve police forces’ response to modern slavery, but there is a risk of a ‘cliff edge’ effect when this funding comes to an end in April 2019. It is not yet clear how Brexit will affect the law enforcement response to tackling modern slavery. Recommendation: The Department needs to work with the National Crime Agency, the Crown Prosecution Service, the Independent Anti-Slavery Commissioner, Police and Crime Commissioners, local police forces and local authorities to urgently develop a set of clear, practical steps and good practice guidance to understand why there are regional variations in tackling the issue and how these can be reduced. 8 Reducing modern slavery 1 Measuring success of the strategy and new legislation

The Department has not calculated the total amount it spends on tackling modern slavery each year or brought together all the budgets for tackling modern slavery across government.14 The Department told us that it is “very difficult” and “almost impossible” to identify all public spending on modern slavery from individual departments.15 It said that while the Department held the overall responsibility for policy in this area, the Accounting Officer of each government department and agency had responsibility for its spending on tackling modern slavery. In response to our concern that the Department was therefore not able identify any overlaps or ways that money could be used more effectively, the Department acknowledged that it could pull together more of a picture on the programmes that are specifically related to modern slavery across government.16 It undertook to look at cross-government finance under the ‘coherence plan’ of the senior responsible officer in the Cabinet Office who had recently been appointed by the National Security Adviser. The Department agreed to explore other models that might help it look at the totality of funding across government on tackling modern slavery.17 7 C&AG’s Report, para 8–9 8 Q 5 9 Q 13 10 Q 37; C&AG’s Report, para 1.5 11 Q 14 12 Qq 37–38; Home Office, A Typology of Modern Slavery Offences in the UK, October 2017 13 Q 9 14 C&AG’s Report, para 1.7 15 Q 41 16 Q 46 17 Qq 51, 52 10 Reducing modern slavery

Accountability for delivering the modern slavery strategy is unclear, with no all- encompassing governance structure, and tackling modern slavery was not set up as a coherent programme.18 We asked the Department why it had not mapped out the roles and responsibilities of organisations involved. The Department acknowledged that it needs better coherence in the whole programme of modern slavery. It told us that the newly appointed senior responsible officer in the Cabinet Office will co-ordinate and ensure coherence across the modern slavery programme, including mapping the roles and responsibilities across government.19 Businesses’ compliance with its transparency in supply chains legislation

The Modern Slavery Act 2015 requires companies with a turnover of more than £36 million to produce a statement on slavery and human trafficking each year setting out the steps the organisation has taken to ensure that modern slavery is not taking place in their business or supply chain, including if the organisation has taken no steps. The UK was among the first in the world to introduce legislation of this kind.20 However, as at October 2017, the Modern Slavery Registry (produced by the Business and Human Rights Resource Centre) held around 3,000 statements out of an estimated 9,000–11,000 businesses that the Department estimates the legislation applies to.21 We also received written evidence pointing to the ineffective implementation of the Transparency in Supply Chains clause of the legislation, including from the Corporate Responsibility Coalition (CORE) and the Co-op Group. CORE described, for example, research showing that, even when businesses have produced a statement, they often fail to comply even with the minimum requirements of the Modern Slavery Act 2015.22

We were interested in the Department’s assessment of how many organisations this legislation applied to and how many had published a statement. The Department told us that it does not have a list of all the eligible organisations but it has written to 10,000 that it thinks may be eligible. It explained that it does not monitor the publication of the statements; instead, it relies on two NGO run registries which collate statements.23 The Department could not say what figure of compliance it would expect in the future.24

The Department’s approach has been to work in partnership with businesses, to share best practice and to raise awareness of the requirement. The Department told us that it has the ability to issue an injunction to companies who do not comply with the legislation, but it had not yet used these powers.25 It said that it was “open to the conversation” about government’s role in monitoring and enforcing compliance and that its preference for encouragement rather than punishment was “not a static position from the Home Office”.26 18 C&AG’s Report, para 11 19 Qq 19–20 20 C&AG’s Report, para 1.13 21 Qq 63, 88; C&AG’s Report, para 1.14 22 Q 68; Corporate Responsibility Coalition (CORE) (RMS0009); Co-op Group (RMS0002) 23 Qq 56–60, Q 69 24 Q 87 25 Q 68 26 Qq 68, 84 Reducing modern slavery 11 The independent anti-slavery commissioner and the Department told us that gender pay gap publications were an example of practice elsewhere in government from which they were looking to learn.27 Brexit

We were interested in what impact the Department anticipated Brexit would have on its systems for tackling modern slavery. The Department confirmed that it would have no impact in terms of government’s legal duty to care for victims and it undertook to write to us on the specific Brexit impacts it anticipated.28 The Department has identified that one potential impact will be its ability to arrange time for parliament to consider any new modern slavery legislation. The National Crime Agency told us that, on behalf of law enforcement, it has been running an operational group that considers the consequences of Brexit. It identified that there is a risk in relation to intelligence sharing, including how quickly the UK could share intelligence within or outside of Europol.29 27 Qq 67, Q77 28 Qq 112–113 29 Qq 114–115 12 Reducing modern slavery 2 Supporting victims and prosecuting offenders Digitisation of the National Referral Mechanism

The National Referral Mechanism (NRM) is the framework for identifying victims of human trafficking and modern slavery and ensuring that they receive the appropriate support. The Department introduced the NRM in 2009 to meet the UK’s obligations under the Council of Europe Convention on Action against Trafficking in Human Beings.30 The NRM is administered by the National Crime Agency, which processes the identification of victims that are European Economic Area (EEA) nationals and refers nationals from outside the EEA and EEA nationals subject to immigration control to UK Visas and Immigration (UKVI).31 In 2014 the Department reviewed the NRM and found that it was inefficient and needed to be overhauled. Two key problems are that the NRM system does not allow government to use the data it collects in a sophisticated way and that the process is inefficient and takes too long. The Government announced reforms to the NRM in October 2017, including the digitisation of the system. However, it had not yet implemented any changes to improve the NRM process.32

The Department acknowledged that the current NRM system can “kindly be described as clunky” and that digitisation of the NRM had been “a long time in the making”.33 The National Crime Agency described the system as “antiquated and in need of modernisation”.34 The Department told us that it has identified a supplier to build the new digitised system and expects to sign the contract imminently. It expects the system to be built by the end of summer 2018 and the data to be migrated in the autumn, with the new system fully functional by 2019. The Department confirmed that the new system will enable those referring potential victims to be able directly to input information which will go straight to the casework team, in contrast to the current paper-based system. In response to our concern on how the Department will ensure that the existing data is cleansed before migration, the Department told us that it would need to check the exact process for validating the information to ensure that only meaningful data is migrated.35

The Department told us that it has not been able to analyse NRM data in detail, for example on numbers referred by type of business they were working in, because the system it is stored in does not enable data to be analysed in a meaningful way.36 However, the National Crime Agency said that the newly established Joint Statistical Analysis Centre (JSTAC) has been undertaking this analysis in the last 12 months.37

The Department does not collect information on outcomes for victims once they leave the NRM. After confirmed victims receive an NRM decision, they have two weeks to leave the support provided by the Salvation Army, and receive no specific support from 30 C&AG’s Report, para 2.2 31 C&AG’s Report, para 4 32 Q 15; C&AG’s Report, paras 2.5, 2.13, 2.14 33 Qq 15, 30 34 Qq 94 35 Qq 30–32 36 Q 73 37 Q 76 Reducing modern slavery 13 that point. The Department has no assurance that victims are not trafficked again.38 The Department stated that the new digitised system, where possible, would capture whether someone has been re-trafficked, and that this will be an important way of measuring the Department’s success in supporting victims. The Department and the National Crime Agency both acknowledged the challenges involved in identifying whether someone had been trafficked before, with successful identification being dependent on what victims would be willing to declare.39 Making decisions more quickly

The NRM process is inefficient and potential victims are caught up in the system for a long time, while waiting for a decision. For two-thirds of those referred in 2016–17, the government took longer than 90 days to make a conclusive grounds decision.40 The Department acknowledged that the decision-making process “is too long at the moment, particularly in relation to non-EEA nationals”. It explained that this is because cases are complex, often refer to offences which took place overseas and that the process of gathering evidence can take a long time. The Department told us that it has invested to clear a current backlog of cases by increasing staff numbers, and with further staff to follow.41 The National Crime Agency told us that it has also doubled its resources in this area.42

The Department does not have a target for the time taken to make a final (conclusive grounds) decision, although it states it will make a decision as soon as possible after the 45 day period of support to which potential victims are entitled.43 The average length of time for an adult conclusive grounds decision was 134 days in 2016.44 The Department said it had not set targets because the focus had been on making sure decisions were robust, with decision-makers given however long they needed to gather evidence and make the correct judgement. However, it added that, from listening to stakeholders and victims, it had learned that the uncertainty is “deeply unhelpful and damaging.”45 In addition, many victims make asylum claims and, as the Department cannot take a negative decision on an asylum claim while a person is being considered under the NRM, delays in the NRM risk slowing down asylum claims.46 The Department told us that it plans to put in place a target through the reformed NRM, but it could not yet say what the target would be.47 The Department said that the new digital NRM system will enable it to handle casework in a much more sophisticated way as it will be able to flag when cases go over a target. It told us that, as a result of the digitisation process, “There will be a much better system to enable those cases to be processed quickly.”48

The increased time that victims are waiting has also increased the costs of the support provided to adult victims while they are waiting for a decision. For adult victims of modern slavery in England and Wales the Department manages a contract to provide the support, 38 C&AG’s Report, para 19 39 Q 83 40 C&AG’s Report, para 2.13 41 Q 92 42 Q 94 43 Q 92; C&AG’s Report, para 2.4 44 C&AG’s Report; para 2.12 45 Q 93 46 C&AG’s Report, para 16 47 Qq 92, 97 48 Q 93 14 Reducing modern slavery which is currently delivered by the Salvation Army and its 12 subcontractors. When the Department let the contract in 2015, it assumed that on average potential victims would be supported for 79 days, but for those exiting the service in the year to June 2017 it was on average 251 days.49 The Department told us that the number of people receiving support was in line with its forecasts, but as cases are taking much longer than anticipated the costs for support, including subsistence, accommodation and specialist bespoke support, have increased.50 The victim support contract is demand-led, reimbursing the Salvation Army for the services it provides, so if it has to provide more support for longer then the overspend falls to the Department.51 The Department now estimates that the contract will cost £90 million over the five years to 2020, compared to early estimates of around £40 million, and a revised estimate as part of the 2016 Spending Review to £53 million. The Department undertook to write to us with the estimate of the cost of the next contract and its estimates for the length of time potential victims will receive support.52 Quality of care provided to potential victims

Potential victims of modern slavery who are referred to the NRM and receive an initial (reasonable grounds) decision that they are a victim of modern slavery, are entitled to receive support for 45 days, and then for as long as it takes to reach a final (conclusive grounds) decision. However, the Salvation Army and its subcontractors, who provide the support, are not subject to independent inspections or standards of care.53 The Department told us that there were standards in place as part of the current contract, and that inspections are conducted by the Salvation Army who would escalate any serious issues to the Department.54 But the Department does not have effective oversight of the victim care contract and has not itself put in place a robust inspection regime to check the quality of care and support provided in safe houses.55 The anti-slavery commissioner told us that “there has been a void” in relation to ensuring care standards are in place and are met. He also commented that “the independent quality inspectorate for the Salvation Army has not really been utilised in this area as it would be about other services.”56

The contract with the Salvation Army was set up with a key performance indicator requiring safe houses to be inspected by the Care Quality Commission (CQC) but this indicator was not valid as safe houses do not ordinarily fall within the CQC’s remit. The team managing the contract at the Department was unaware of this.57 The Department told us that, for the next victim care contract, which is due to start in 2020, it will be adopting the survivor care standards created by the Human Trafficking Foundation in

Police forces’ approach to tackling modern slavery and the number of NRM referrals made varies significantly by region. The three police forces with the highest number of adult referrals have made more than 900 referrals since the NRM began in 2009, while six police forces have referred fewer than ten adult potential victims each in the same period. The ratio between the forces with the highest number of referrals and the lowest number is much higher than for other types of crime.60 In October 2016 the Home Secretary announced £8.5 million of funding for the Police Transformation Fund to help law enforcement agencies tackle modern slavery.61

We asked whether the National Crime Agency was confident that all forces are taking tackling modern slavery seriously. The National Crime Agency told us that the investments of the Police Transformation Fund have made police forces more aware and helped put more focus on modern slavery. The National Crime Agency said that it had raised its concerns about the differences between forces. It was monitoring individual police forces’ response and if it was not satisfied that there was a coherent response across every police force, it may use its “operational tasking powers” in the future to task police forces. The Agency mentioned that the last time it had seen a real and unexpected difference in performance across police forces was around the issue of child abuse and that it had then used the tasking powers at its disposal.62 The National Crime Agency also said it was concerned about the approaching “cliff edge” when the Police Transformation Fund expenditure comes to an end in 2019.63

In 2016 only 80 defendants were prosecuted under the Modern Slavery Act for 155 modern slavery offences, rising from 26 in the previous year for 27 offences.64 The National Crime Agency told us that it had been monitoring prosecutions closely and that in the year to June 2017 there had been 231 prosecutions under the Act. The Agency, while pointing to recent increased effort and results, acknowledged that there is more to do.65 While conviction rates have been comparable with other crimes once charges are brought, only a small proportion of the of the modern slavery crimes recorded by police result in a charge. In the year to March 2017 only 6% of crimes recorded were summonsed or charged.66

We asked each of the witnesses what one thing they would do to increase the number of crimes recorded resulting in a charge. The independent anti-slavery commissioner told us that better management, supervision and accountability were required for modern slavery crime, comparable to what is already in place for domestic violence or sexual assault. The National Crime Agency told us that better, systemised use of intelligence was 59 Qq 107–108 60 C&AG’s Report, para 20 61 Qq 125–126; C&AG Report, para 4.4 62 Q 119 63 Qq 116–117; Q 120 64 C&AG’s Report, para 21 65 Q 116 66 C&AG’s Report, paras 21, 4.9 16 Reducing modern slavery required,67 and the Department suggested that the most important thing was improving police officers’ understanding of the systems, legislation, paperwork and powers available to them.68 67 Qq 124, 125 68 Q 125 Reducing modern slavery 17