Spotlight calls for Economic Crime Fighting Fund, after budget small change

The government should reinvest criminal assets and fines into an innovative new Economic Crime Fighting Fund to turbocharge enforcement after the Autumn budget offered minimal funding for tackling economic crime, argues a report published today by Spotlight on Corruption.

Beyond a small but welcome uplift for the Serious Fraud Office, and some resources to counter tax and benefit fraud, key bodies like the National Crime Agency tasked with fighting economic crime – ranging from the UK’s fraud epidemic to corrupt elites laundering their wealth in the UK – were overlooked by the budget. 

The report – titled Forging a virtuous circle: Reinvesting fines and criminal assets to turbocharge the fight against economic crime – recommends that as part of the next Spending Review, due in Spring 2025, new mechanisms be found to invest in the UK’s enforcement bodies to enable them to tackle the UK’s chronic economic crime enforcement issues. 

With fraud prosecutions plummeting by 64.6% between 2017/18 and 2022/23, and just 0.2% of the over £100 billion a year the National Crime Agency assesses is laundered through the UK recovered in 2023/24, more resourcing is urgently needed.  

The report finds that economic crime enforcement raises huge sums for the government through seizing criminal assets and imposing fines, but enforcement agencies see little of these funds reinvested in their budgets. Of the £4 billion generated for the government through economic crime enforcement between 2017/18 and 2023/24, just 17.6% was reinvested into agencies or into crime reduction and community projects. 

If even 50% of these funds had been reinvested, economic crime regulation and enforcement would have received an extra £233 million a year, nearly double the annual investment underpinning the 2023-2026 Economic Crime Plan.

With all fines going to the Consolidated Fund administered by the Treasury, the report finds that the scheme for reinvesting a proportion of seized criminal assets – the Asset Recovery Incentivisation Scheme (ARIS) – is flawed:

• One third of ARIS spending of up to £190 million over the last seven years appears to be unaccounted for in Home Office data.
• Just 3% of the £116.5 million distributed to agencies via ARIS in 2022/23 was publicly accounted for in their annual reports.
• Annual spending rules prevent long-term, strategic spending and the ARIS may drive agencies to pursue low-hanging fruit to boost their budgets. 

While some ARIS funds are used to incentivise agencies and drive innovation in asset recovery, in other instances the lack of oversight means it is spent on pet projects – in one case funding an inter-police force yacht race from Portsmouth to Liverpool – rather than on increasing the UK’s asset recovery efforts as it is meant to do.

Phil Brickell, MP for Bolton West and a member of the All-party Parliamentary Group on Anti-Corruption & Responsible Tax, said:

“Our enforcement agencies work incredibly hard to claw back the billions of pounds lost every year to economic crime in the UK. But they simply do not have the resources to protect us from all manner of crimes, from fraud to money laundering and tax evasion.

“We all know that tough decisions have to be made on public finances, but boosting enforcement funding doesn’t need to come at the expense of working people. Enforcement actions should be self-funding, with a greater proportion of cash raised from fines, asset seizure and the like returned to the relevant agencies. It should be the criminals who are made to pay, not the hardworking taxpayer.”

James Bolton-Jones, Senior Advocacy Advisor at Spotlight on Corruption and author of the report, said: 

“Strategic, multi-year investment to tackle corruption and fraud through an Economic Crime Fighting Fund would be a game changer for law enforcement and offer the government and taxpayers fantastic value for money. The next phase of the Spending Review in the Spring will be a major opportunity for the government to back up its aim to turn the UK into the anti-corruption capital of the world with proper resourcing through reinvesting fines and criminal assets.”