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Serious Organised Crime Agency

Volume 712: debated on Monday 20 July 2009

Statement

My honourable friend the Parliamentary Under-Secretary of State for Crime Reduction (Alan Campbell) has made the following Written Ministerial Statement.

I am pleased to be able to provide a schedule of costs, which has been prepared exceptionally for 2008-09, following the merger of the Serious Organised Crime Agency (SOCA) and the Assets Recovery Agency (ARA) on 1 April 2008.

The figures in the schedule show the sum of assets recovered by SOCA in 2008-09 to be in the region of £3.9 million more than the cost of their recovery activities using the powers inherited from ARA. SOCA is tasked with reducing the harm caused to the UK by organised crime, and numbers alone do not tell the full story, but in the first year of SOCA’s use of these new powers it exceeded the Government’s target for civil recovery on its own. The Government believe that SOCA’s performance in this area of activity fully vindicates their decision to merge both agencies.

The figures provide, as far as it is possible to do, an assessment of the costs incurred by the Serious Organised Crime Agency in recovering assets using powers inherited from ARA during the first year following the merger. Assessing the costs associated to a single work stream within SOCA has proved challenging and significantly more complex than the calculations that could be made for ARA, which was focused on a single area of activity. Given that former ARA work is now only part of a larger organisation with much wider aims and objectives and significantly larger and more varied overhead costs, a like-for-like comparison is difficult.

SOCA’s remit is to reduce the harm caused to the UK by serious organised crime. To achieve this SOCA deploys a range of tools. These include: criminal justice interventions (arrests and prosecutions); action to deny criminals access to assets through the use of proceeds of crime legislation and other measures; the disruption of criminal markets and organisations; and the use of ancillary orders such as Serious Crime Prevention Orders. The use of these tools is mainstreamed into the operational activity of the agency. Most operations deploy a number of these tools. It is not possible to identify, in a manner which could be audited, the costs associated with the use of specific tools within any given operation. The identification of costs for powers inherited from ARA is less problematic as civil recovery operations were run as a discrete area of the business in 08-09.

The receipts from SOCA’s asset recovery work are not intended to cover the operating costs of SOCA as a whole.

Summary Analysis of ARA/SOCA Expenditure on Asset Recovery—2003-04 to 2008-09

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

ARA Actual

ARA Actual

ARA Actual

ARA Actual

ARA Actual

Actuals

£'000

£'000

£'000

£'000

£'000

1

Total Reported ARA Expenditure

10,889

14,085

23,617

24,927

24,598

2

Less

i)

Centre of Excellence Direct Costs

-759

-1,231

-1,625

-1,731

-2,034

ii)

Overheads on C of E Costs (2)

-637

-1,033

-1,363

-1,379

-1,779

3

SOCA Costs

i)

Direct Costs

Staff

6,374

Other Including Receivership Fees

5,910

ii)

Overhead Recharges (Notes 3 & 4)

4,885

4

= Cost of Asset Recovery Activities

9,493

11,821

20,629

21,817

20,785

17,169

5

Adj for Change of VAT Status (Note 5)

-853

6

Comparable Annual Cost Levels

9,493

11,821

20,629

21,817

20,785

16,316

7

Cash Value of Assets Recovered

-2

-4,384

-4,119

-15,912

-9,225

-20,175

8

Net Cost (Surplus) In Year

9,491

7,437

16,510

5,905

11,560

-3,859

9

Cumulative Cost (Surplus)

9,491

16,929

33,439

39,344

50,904

47,044

Notes

1 Overview—This statement compares costs in SOCA of taking forward proceeds of crime activities previously undertaken by ARA. It includes an accumulated cost at the request of NAO as the original remit for ARA was that this work would in the longer term be self-funding. The 2008-09 outturn shows a surplus for the first time, mainly because overhead costs in SOCA are much lower than those in ARA.

2 Centre of Excellence Overheads for 2003-04 to 2005-06 are calculated @ 84 per cent of direct costs based on the average of the 2006-07 and 2007-08 actual costs reported by ARA.

3 Overhead costs in SOCA are c 40 per cent based on full recovery of all SOCA's infrastructure costs (that is, accommodation; security; IT systems etc) across operational activity areas including former ARA services.

4 The overhead savings are represented in practice by the fact that SOCA has been able to reduce accommodation costs in London and also by the ability to release c 50 FTE staff into other SOCA operational activities following the merger.

5 SOCA costs include VAT which ARA was able to recover—VAT is cost neutral in total public purse terms and deducted from SOCA costs to facilitate direct comparison with ARA costs. Even without this adjustment, a surplus would be shown in 2008-09.

SOCA, July 2009