Fines, Confiscation Orders and Fixed Penalties

Thursday 15th December 2011 Written Statements

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

Her Majesty’s Courts and Tribunals Service (“HMCTS”) has prepared a trust statement providing an account of the collection of revenues which, by statute or convention, are due to be paid to HM Treasury. The statement includes the value of fines and confiscation orders imposed by the judiciary; fixed penalties imposed by the police; the value of collections; the balances paid over to third-parties including victims of crime, the Home Office and HM Treasury; and the balance of outstanding impositions.

Enforcement of all court impositions is a priority for this Government. The Ministry of Justice has been working closely with the Home Office, Crown Prosecution Service, the Serious Organised Crime Agency and others to improve enforcement through a range of current and planned measures. These include “Operation Crackdown”, a targeted blitz on persistent defaulters, telephone and text chasing, action to increasing deduction of court fines direct from salary and benefits, greater use of tracing tools like credit checks, and 24-hour telephone and internet payment facilities.

We are also exploring how we can reduce the level of “aged debt” on the Government’s books—including fines, compensation and costs orders which have been imposed but have yet to be successfully collected after a minimum of 12 months. In some cases, these date back a number of years—some as far as the early 1990s. We are piloting new approaches with three commercial suppliers to establish the collectability of financial penalties over a year old, testing a combination of techniques and innovation and providing evidence on which to develop a strategy to manage this debt in the future.

The statement shows that in 2010-11 over £497 million of cash was collected by HMCTS—an increase of £25 million on the previous year. The overall total of outstanding impositions increased from £1.5 billion to £1.9 billion. The principal driver for this has been an increase in the use of confiscation orders, which have been more aggressively imposed in the Crown Court over the last year to deprive criminals of assets—their use by the courts in 2010-11 rose by 158%, and accounts for £1.2 billion of the total. In some cases, such as joint criminal enterprise, two separate orders can be issued for the total sum—in one case two individuals are separately liable for the same sum of £92 million, a total order of £184 million.

The Ministry of Justice is responsible for the direct collection of 16% of confiscation orders by value. Enforcing confiscation orders presents a challenge right across Government, as criminals use increasingly complex ways to mask or offshore their assets—it is estimated that over 60% of the total are “hidden” assets or held overseas. All agencies involved in confiscation orders are committed to improving enforcement performance.

The Comptroller and Auditor General (C&AG) has today published a report on the trust statement, and provided a disclaimer with his certificate. This reflects the fact that the IT systems used in the enforcement of impositions are live “case management” systems, rather than accounting systems: they are fully effective in reporting the value of money owed to ensure targeted enforcement, but cannot be used for retrospective reporting of individual transactions for audit. The IT system was rolled out in 2007-8: the requirement to produce a trust statement first arose for 2010-11. We estimate that to implement a new accounting system for these purposes would cost at least £3 million, and would not present good value for public money. We are, however, taking steps to ensure that we are better able to evidence the robustness of the historical figures for audit purposes in future.