The director of the Serious Fraud Office (SFO) and I are today publishing a report from Jessica de Grazia, a former senior prosecutor in the USA, of her review of the working practices of the SFO. The review was commissioned in March 2007 by the former Attorney-General, Lord Goldsmith, and the former director of the Serious Fraud Office, Robert Wardle.

To support her review Ms de Grazia compared the SFO with two prosecutor’s offices in the USA. Her analysis and recommendations cover the internal workings of the SFO in some detail, and she has also covered a number of external factors which she sees as having an impact on the SFO’s effectiveness. We are very grateful to Ms de Grazia for the extensive work she has put into preparing this detailed report.

Tackling fraud effectively is a matter of the highest priority. The new director of the SFO, Richard Alderman, is taking forward a programme of significant reforms to the SFO, addressing issues of leadership, skills, structures and working practices. He is grateful to have Ms de Grazia’s detailed analysis of the internal workings of the SFO as background to his change programme.

Ms de Grazia’s recommendations about external factors affecting the prosecution of fraud go wider than the SFO, and provide an interesting perspective for the development of policy in this area, based on US experience.

Some of her recommendations can be accepted or are already in hand; for example, the Crown Prosecution Service has now adopted the practice of speaking to witnesses in limited circumstances to clarify or assess the reliability of their evidence. The Government intend to extend means testing for legal aid to the Crown Court and agree that legal aid payments should be for outcomes not time spent.

Not all of Ms de Grazia’s recommendations can be accepted. In particular, the prosecutors do not share Ms de Grazia’s conclusion that the way to address concerns about the disclosure regime is to return to the position prior to the Criminal Procedures and Investigation Act 1996. We keep the disclosure regime under active review and will work with practitioners and stakeholders to identify and implement improvements.

The Government are committed to ensuring that the legal framework as a whole allows fraudsters to be brought to justice, and have a number of relevant reforms in hand as part of the national fraud programme, implementing the recommendations of 2006’s fraud review. For example we are consulting on proposals for a framework for plea negotiation in fraud cases. A working group is examining Crown Court powers to see whether they are sufficient in relation to fraud; and a separate working group is examining whether there should be a specialist financial court.

These initiatives are part of a wider programme, financed by an additional £29 million from the Comprehensive Spending Review 2007, including the establishment of a national fraud strategic authority; a national fraud reporting centre; and a lead force for fraud.

Under Richard Alderman’s leadership the Solicitor-General and I expect the SFO to play a full part in tackling fraud effectively as part of this wider programme.

Copies of the report will be placed in the Libraries of both Houses.