Complex investigations could be put at risk by forecast cuts to SFO budgets, says expert

Out-Law News | 13 Aug 2013 | 4:56 pm | 1 min. read

The Government must do more to protect the budget of the Serious Fraud Office (SFO) or risk its ability to carry out complex fraud investigations, an expert has said.

Barry Vitou of Pinsent Masons, the law firm behind Out-Law.com, said that although forecast budget cuts were not as severe as initially feared, they came at a time when the SFO was facing a "significant" case load. The SFO is the independent government agency that investigates and prosecutes serious or complex fraud and corruption.

According to estimates provided to MPs, the SFO's budget for this financial year is due to be cut from £40.8 million in 2012/13 to £34.6m. However, the Financial Times reported last month that the UK Treasury planned to provide additional funding to the agency to support certain large investigations, such as the SFO's ongoing criminal investigations in relation to alleged manipulation of the London Interbank Offer Rate (LIBOR) benchmark interest rate.

Vitou said that without "adequate financing", the SFO would be forced to make requests to the Government for similar sums of money every time it needed to pursue investigations that went beyond its financial capabilities.

"Asking for extra funding to tackle major investigations only as they arise risks getting into the situation where the Government only grants resources to deal with fraudulent activity that has hit the headlines and is already high on the political agenda," he said. "This may be too late to prevent damage to consumer interests and to the UK's reputation as a safe place to invest and do business."

"It is vital that the SFO is adequately resourced to carry out its preventative role properly, and be seen to clamp down equally on all forms of fraudulent activity. A challenging economy is usually guaranteed to trigger an increase in fraudulent activity, and so the SFO needs to be properly equipped to ensure that the UK is a safe place to invest in and conduct business," he said.

In addition to central government funding, the SFO is allowed to keep some assets seized as a result of its investigations through the Treasury's Asset Recovery Incentivisation Scheme (ARIS). According to figures published on Vitou's website, thebriberyact.com, ARIS funding made up 95% of the SFO's additional income last year, up from 69% the year before.

According to Vitou David Green, the SFO's director, has said that the agency will never refuse to take on a case simply because it cannot afford to do so.