In a welcome move for the UK’s aid-funded enforcement efforts, in December last year the Foreign Secretary announced that the Foreign, Commonwealth and Development Office (FCDO) will extend its funding to support the National Crime Agency’s International Corruption Unit (ICU) by up to £36 million over five years.
The ICU is tasked with tackling corruption involving developing countries, and this funding announcement is a promising sign that the UK is making enhanced enforcement a key plank of its efforts to show a global leadership role in the fight against dirty money.
If this investment is to be as effective as possible, it is crucial that the ICU uses the money to prioritise cases that can make a real difference for developing countries, such as enforcement against UK enablers of corruption.
It is also critical that the Home Office tackles the NCA’s recruitment and retention challenges by fully supporting pay reform, and ensures the NCA itself puts more ring-fenced funding into the unit to tackle international corruption not linked to developing countries, to ensure this injection of aid money provides full value for money.
Why is aid-funded enforcement so important?
The UK is a major destination for corrupt money from around the world, not least from developing countries, with our professional enablers ready to help those looking to hide ill-gotten wealth. Meanwhile UK-based companies have paid bribes to secure business and resources in developing countries, fueling corruption and inequality.
The ICU is at the heart of the UK’s response to this problem. This specialist unit tackles international bribery and the theft of public assets by senior foreign officials, and works to combat the laundering of those assets into the UK.
In one of its biggest successes of 2024, the ICU secured the first conviction of a foreign official for requesting a bribe from a UK company. In another high profile case, the unit brought charges against a former Nigerian oil minister suspected of accepting bribes in exchange for awarding multi-million pound contracts.
To deliver this mandate, the ICU relies on aid funding from the FCDO to ring-fence resources for cases affecting developing countries. Without this, the NCA simply wouldn’t be able to prioritise effort on what are often complex and long-running investigations. Existing aid funding was due to run out this year, so the commitment to further funding is vital.
A prime example of the unique role the ICU can play is in urgently tracking down and freezing any assets in the UK that have been stolen from the people of Bangladesh, so that these can then be returned. A recent investigation by the Guardian and Transparency International UK, found that associates of the former Bangladeshi PM Sheikh Hasina have amassed UK property worth nearly £400 million. But this kind of wide-ranging and detailed investigation would only be possible thanks to the funding the ICU receives from the FCDO.
How significant is the new funding?
We estimate the annual aid funding for the ICU could increase by up to 44% compared to recent years. Given that the ICU’s budget was significantly reduced following aid budget cuts in 2020/21, the new round of funding brings it back to the level it was previously on track for.
In 2020, the business case (pre-cuts) for the ICU was projected to be £35.9 million over five years (or £7.2 million a year) – very close to the amount now announced. However, its budget shrunk to an average of £5 million a year over 2019/2020-2022/2023. The ICU will have had to scale back its ambitions on fighting corruption in light of these cuts, and will be able to look at ramping its ambition up again with new funding.
A significant factor in ensuring this new funding increases capacity in the unit, is whether the current balance with non-aid funding is maintained. We estimate that around 24% of ICU staff are funded by other non-aid related grants to work on cases affecting higher income countries.
We do not yet know if that funding will be maintained or increased, particularly in light of the NCA’s overall pivot to working on the new government priority of Organised Immigration Crime (OIC). If that priority diverts existing ICU resources, the new funding will not be quite as big as it looks.
And whilst this is a very important boost, there is still a huge hill to climb given the scale of the problem. Our recent research found that despite the ICU, working with the Crown Prosecution Service (CPS), delivering some extremely welcome enforcement outcomes in recent years, its capabilities still fall far short of what is needed. For example, existing funding only allows it to investigate around 20 cases at any one time, despite receiving 600 intelligence packages in 2021/2022 alone.
How to ensure aid-funded enforcement supports development
It is crucial that future work prioritises enforcement against the UK professional enablers (such as bankers, solicitors and estate agents) that facilitate the looting of developing countries; and against the UK companies and individuals who bribe their way into business in developing countries.
These are two aims of the FCDO’s aid funding, and yet our research found that ICU investigations had not led to any convictions in these areas since it was established in 2015.
Whilst the ICU’s work has led to an increasing number of other convictions, it is not always clear how far these translate into progress on the FCDO’s development aims, with a risk that the ICU gets skewed towards NCA and Home Office priorities on serious and organised crime. For example, at least 12 convictions out of 21 convictions altogether between 2020/21 and 2023/24 related to laundering the proceeds of (UK) crime overseas, including through developing countries, rather than to the FCDO’s aim of tackling corrupt money from developing countries being laundered through the UK.
To ensure greater accountability going forward, the FCDO and NCA will need to provide more consistent and transparent information about the impact of aid-funded work. Publishing the FCDO’s business plan for how the new money will be spent would be a first and important step towards doing this.
What else needs to happen
Our August 2024 report on aid-funded enforcement made several other recommendations to strengthen this work. These included more funding for the CPS to provide enhanced support to the ICU at an early stage on criminal cases, to ensure speedier and more effective prosecutions.
The NCA also needs to ensure that the rest of the ICU’s huge remit – dealing with corruption relating to higher income countries that are ineligible for aid spending – receives ring-fenced funding and that fighting international corruption is made a clear organisational priority.
Finally, it is essential that the Home Office gets on with tackling the NCA’s acute recruitment and retention challenges so that the ICU can build up and keep the specialist expertise needed to deliver on its mission. A crucial element is pay reform and so we will watch with interest how the Government’s recent recommitment to developing and implementing proposals for reform of the NCA’s pay structure – which is long overdue – develops.
If the UK is to truly be a hostile environment for the proceeds of kleptocracy and grand corruption, this very welcome new funding initiative must be backed by support from other government departments to ensure it is successful.
