Her Majesty’s Courts and Tribunals Service (HMCTS) has prepared a trust statement providing an account of the collection of revenues which are due to be paid to HM Treasury. The statement includes the value of fines and confiscation orders imposed by the judiciary; fixed penalties imposed by the police; the value of collections; the balances paid over to third parties including victims of crime, the Home Office and HM Treasury; and the balance of outstanding impositions.
We welcome the Comptroller and Auditor General’s (C&AG) report on the trust statement which recognises the improvements in financial reporting made by HMCTS. The C&AG has, for the first time and subject to two specific exceptions, given an opinion that the trust statement presents a true and fair view of the transactions and balances reported.
The statement shows that we have continued the year-on-year improvement in the levels of collection. During 2012-13 more than £495 million has been collected from offenders, an increase of £11 million compared to 2011-12. Almost £59 million in compensation was paid to victims of crime—of which £25 million was funded by criminals’ cash and assets recovered through confiscation orders. In addition, following a change to the victim surcharge HMCTS is able to report increased receipts for victim support with £11 million being collected and paid in the year to support this work.
Confiscation orders are one of the key mechanisms available to the Government to deprive criminals of the proceeds of their crimes. The value of the order imposed, which is often very high, is based on the criminal benefit attributed to the crime and may, therefore, exceed the value of realisable assets that are known to the court at the time of imposition. Crucially, an outstanding order stops the criminal benefiting from the proceeds of crime and ensures that, if the assets are discovered in the future, they can be seized.
Confiscation orders comprise 70% (£1.4 billion including interest) of total outstanding impositions. All available actions and sanctions are taken to recover this debt and bring it to account as expeditiously as possible. However, around one half of this amount—excluding interest—cannot be collected as it includes £109 million (8%) relating to individuals who are deceased, deported or who cannot be located, £84 million (6%) relating to orders which are being appealed and cannot be enforced while under appeal; and £136 million (10%) relating to orders where all the assets have been assessed as hidden following the conclusion of financial forensic investigations. In addition there is a further £339 million (24%) of interest accrued on confiscation orders which are outside agreed payment terms.
Cracking down on those who do not pay is an absolute priority. The agencies involved in the enforcement of confiscation orders, including the Ministry of Justice, the Home Office, the Serious Fraud Office and the Crown Prosecution Service take every step to tackle outstanding debt including the addition of interest and imprisonment for those who do not pay. In relation to the outstanding fine debt the sanctions include taking deductions from offenders’ benefits or their earnings and seizing and selling their property and goods. Those who do not pay can also be imprisoned.
Criminals go to extraordinary lengths to hide the proceeds of their crimes by transferring funds abroad and concealing them with friends and family, but we are succeeding in recovering more money every year. The agencies responsible for enforcement are building better relationships with overseas authorities and engage specialist forensic teams to track down hidden assets. The 2012-13 trust statement analyses the confiscation order debt value by lead agency to assist the users’ comprehension of the contribution made by agencies involved in the enforcement of confiscation orders.
HMCTS recognises the importance of the recommendations made by the National Audit Office value-for-money study on confiscation orders and will work with our partner enforcement agencies to address those recommendations and ensure that criminals continue to be deprived of the proceeds of crime.
Legislation to allow HMCTS to obtain data from HMRC and DWP to be used for the purposes of setting fines and enforcing outstanding payment amounts came into force on 11 December 2013 and will allow HMCTS to increase the use of the attachment of earnings sanction. HMCTS has also rolled out a programme to implement the use of direct debit payments which can be used where outstanding fines are paid in instalments. The direct debit payment process will be easier for enforcement staff to administer than standing orders and should help to improve collection rates.
HMCTS has recently published an OJEU notice seeking a commercial partner to help increase collections, reduce enforcement costs and, importantly, ensure more criminals pay. A new national system has been implemented to manage the collection of fixed penalty notices, with all of the police forces having transferred to the new platform by June 2013.The continuing improvement the agencies are making combined with our future plans will ensure that more criminals pay and that taxpayers get better value for money.