Serious Fraud Office

Tuesday 4th December 2012 Written Statements

[The Attorney-General (Mr Dominic Grieve)]

The director of the Serious Fraud Office (SFO), David Green CB QC, and I are today outlining details of redundancy payments agreed by the SFO under the leadership of the former director, Richard Alderman, who left office in April of this year.

The SFO’s 2011-12 annual accounts, published in October, included payments made to the outgoing chief executive, Phillippa Williamson, which the National Audit Office (NAO) had deemed to be irregular as the appropriate approvals had not been obtained. It has since come to light that a further, similar arrangement had been entered into by the former director and the current director and I have therefore agreed to publish details to Parliament of all redundancy payments made by the SFO since May 2010.

As an independent body, the director of the SFO is the accounting officer for that organisation and as such is directly accountable to Parliament for the money the SFO spends. Details of redundancy payments were not disclosed to superintending Ministers by the former director. On learning of these agreements, the current director sought legal advice on whether these arrangements may be reopened and money recovered. The advice he received is that the agreements, while entered into without the necessary approvals, are binding on the SFO.

As set out in the 2011-12 annual accounts, the cost to the SFO of chief executive Phillippa Williamson’s redundancy was between £450,000 and £475,000.

A further redundancy agreement was entered into by Richard Alderman and will take effect in December 2012 when Christian Bailes’s post as chief operating officer is made redundant. The current director has been obliged to seek and obtain the appropriate approval in relation to the exit payment. The cost to the SFO is likely to be in the range of £450,000 and £475,000 and will be noted in the 2012-13 annual accounts.

Richard Alderman received a payment into his pension scheme of £44,179.59 (under an early exit agreement) to enable his early retirement at the end of his four-year contract and the appointment of a new director.

In addition, a redundancy payment of between £25,000 to £50,000 to an individual, who operated at senior civil service level, for loss of office was agreed by Richard Alderman and took effect at the end of May 2012.

An individual received a payment of between £25,000 to £50,000 under a voluntary exit scheme which was accounted for in the 2011-12 accounts. Two smaller, non-redundancy exit payments for staff below the senior civil service have been made since May 2010 as disclosed in the 2011-12 accounts (note 7), including one payment

from the previous year (2010-11). These two payments were for termination of contracts. The total combined cost of these exits is under £31,000.

The NAO has the statutory right to inspect how the SFO spends its money and the current director is committed to working closely with them. The director has put in place controls to ensure that proper procedures are followed in the future.

The publication in November of the report on case work at the SFO by HM Crown Prosecution Service Inspectorate (HMCPSI) was an important step in building the effectiveness of the SFO and showed the benefits to both the SFO and the Government of independent external inspection. It is proposed that there should be a follow-up inspection early next year. The director and I believe that the arrangements should be put on a more formal basis. I am therefore proposing to place the office on the same footing as the CPS and have agreed with the director that I will seek to legislate for statutory inspection of the SFO by HMCPSI as soon as parliamentary time allows.