Skip to main content

Serious Fraud Office

Volume 486: debated on Thursday 15 January 2009

Once again, this is about the Serious Fraud Office and our efforts to combat fraud. Since publication of the de Grazia report, to which I have referred, the director of the SFO, Richard Alderman, has made many changes to the leadership team, improved staff training, and introduced measures to shorten the time taken to get SFO cases to court. He has reorganised the operational divisions and introduced a case management reform programme. The hon. Gentleman has probably read that a new general counsel, Vivian Robinson QC, with whom I am acquainted from my practice and who is an excellent choice, was recently appointed to sharpen up that end of the SFO’s work.

That is a more detailed explanation, but is the Attorney-General confident that the recent number of failed cases will be turned round by that?

I am sure that my noble and learned Friend the Attorney-General will be as confident as I am of what I am about to say. There have been early successes, bearing in mind that Mr. Alderman has been in post less than a year. In October, the SFO obtained its first ever civil recovery order under the Proceeds of Crime Act 2002 in a case in which Balfour Beatty was required to return £2.25 million of resources that it had progressed with. There are currently six specific mortgage fraud cases on the SFO’s stocks, and much has been done to sharpen its procedures up front so that it spots and evaluates more quickly which cases it should pursue and which it should leave. I hope that its conviction rate will follow that of the American models that the de Grazia review used.

Will the Solicitor-General agree to meet me and the former director of Excel Engineering, which was involved in one of those cases and had the largest number of people prosecuted for fraud? The company, which was the main victim of that fraud, has not been properly compensated, although other complainants who were involved in the fraud have been.

My hon. Friend has previously raised that matter with me in general. I am not sufficiently apprised of the details to comment, but I will gladly meet her as soon as practicable.

May I suggest that the Government are too complacent in their approach? We have correctly identified that the de Grazia report showed a significantly poor SFO performance, relative to US prosecutors, in cost per case, staffing per case and conviction rates. One third of the SFO’s management then left the service, and on top of that, only two days ago, the Solicitor-General made a written statement requesting an extra £15 million, but giving no reason whatever. Is it not increasingly looking as though the SFO is an organisation in crisis? The Solicitor-General needs to explain urgently what is going on with the SFO’s management.

The hon. Gentleman could not be wronger—[Interruption.] Well, he tries hard, but he could not be wronger. It is not unexpected that when reports such as de Grazia’s are produced and a new head comes into the SFO with different ideas about how it should be run, there is movement in the senior management. Richard Alderman seems to me from his presentations to be confident that the new people in post are likely to improve matters enormously. There is absolutely nothing odd, strange or overly demanding about the funding that has recently been given to the SFO. The hon. Gentleman should not be led astray by a Liberal Democrat piece of nonsense that was fed to the press. The Daily Mail reported that a spokesman for the SFO had said:

“This additional funding is the anticipated and agreed amount for this financial year.”

May I explain, in case the hon. Gentleman does not know, that funding for the SFO is based on blockbuster cases, which need the replenishment of funds as they are inquired into? The procedure that has taken place just recently is a very normal one.

I am glad that the Solicitor-General has come to that topic. Last year, the SFO came to Parliament to ask for £17 million extra, and Parliament was told that nearly £7 million of that was purely to cover administrative costs. This year, the SFO is coming to Parliament to ask for £20 million, which is more than half of its base budget, but we are not being told how much of that will be spent on purely administrative costs. In fact, the format of the estimates has been changed so that it is now impossible to tell how much the SFO is spending on administrative costs. Will the Solicitor-General tell the House what the £20 million is being spent on? How much is being spent on administrative costs and how much on cases? Will she also explain why the format of the estimates was changed?

I know of no important change in the format of the estimates. There is no figure of £20 million of which I am aware—I think there has been a little bit of exaggeration. The SFO has an additional £18.81 million, made up of £15.45 million and £3.36 million. That money is largely for the normal accrual of blockbuster cases. In addition, of course, the transformation programme to which I have alluded also requires replenishment. They are perfectly normal bits of funding. A contingency payment has been made and formal parliamentary approval will come in the spring supplementary estimates. If the hon. Gentleman wants any more detail, I invite him to write to me rather than simply getting it wrong and assuming something sinister when there is nothing sinister at all.