Anti-corruption: additional funding for UK’s Serious Fraud Office ‘a drop in the ocean’
Alice Johnson, IBA Multimedia JournalistMonday 9 December 2024
The UK government has provided the Serious Fraud Office (SFO) with an extra £9.3m to improve its ability to tackle complex fraud and corruption cases. The funding will boost the SFO’s core annual budget, which now stands at £88.9m for 2025-26. The additional funding has been secured in advance, but the agency can also apply for extra funds from the Treasury to handle large cases.
Most of the money will be going towards a new case management system that will help the agency to map the progress of its investigations more efficiently. Nick Ephgrave, Director of the SFO, welcomes the additional funding. ‘This investment will strengthen our capacity to recover criminal assets, manage our cases, and help us further explore machine learning technology to tackle the huge disclosure exercises on our cases’, he says.
Helen Taylor, a senior legal researcher at the campaign group Spotlight on Corruption, says the government providing more money to the SFO upfront is ‘a good start’ but it should move to a multiyear sustained funding model for the agency, so that the SFO can plan further ahead and hire more permanent staff. ‘The SFO and law enforcement agencies generally are really struggling to undertake large complex cases that span many years and are very resource intensive […] on a shoestring budget that is bound by yearly limits,’ she says.
The SFO has long struggled with a lack of resources as it aims to tackle complex fraud and cross-border corruption. The average SFO case takes four years to complete, and cases typically involve millions of items of digital information.
Natalie Sherborn, an officer of the IBA Anti-Corruption Committee, says the additional funding is ‘a drop in the ocean’ given the immense amount of data now involved in white-collar crime cases and the various challenges asset recovery presents. ‘It doesn’t really get to the heart of some of the SFO’s fundamental issues with the length of time it takes to investigate and how effective those investigations are,’ she says.
Taylor says that a multiyear sustained funding model would also help the SFO to better plan and prioritise resources to prosecute well-resourced corporate defendants that can outspend the agency on investigation and litigation costs. Some companies under investigation by the SFO have reportedly spent up to 10 times more than the agency on legal and investigation fees.
A key question is whether the SFO will have sufficient budget to deal with matters it’s currently handling and the new offence of failure to prevent fraud
Alex Swan
Website Officer, IBA Business Crime Committee
In one SFO case, city law firms reportedly earned over £50 million to represent the company and its executives during an investigation. The SFO said in its 2024 annual report that it has 130 active cases.
In addition to spending on individual cases, the SFO also cannot match the private sector with regards to pay to further incentivise lawyers to work for the agency. Salaries at the SFO and the elite law firms that often act for defendants in cases differ significantly. For example, the annual salary for a London-based newly qualified associate a top US law firm is over £174,000 – comparable with that of the SFO director.
Another major challenge the SFO faces is disclosure. In 2023 the UK government ordered an independent review of disclosure in the criminal justice system, to be led by Jonathan Fisher KC, following the collapse of two white-collar prosecutions in the UK courts. Earlier in 2024, the SFO discovered problems with its disclosure technology that forced it to review past and present cases.
Taylor says that while more investment in better technological solutions for disclosure could bring benefits to the SFO, it also needs to prioritise training staff about how to effectively use the new systems. ‘It’s not only about ensuring that the SFO has the latest tools but also about ensuring that the SFO staff are equipped and trained to make the most of that,’ she says.
The HM Crown Prosecution Service Inspectorate (HMCPSI) – a watchdog for the SFO and the Crown Prosecution Service (CPS) – said in a report published in April that the SFO had staff who weren’t using the latest disclosure technology to its full potential, with some viewing their training as inadequate. ‘We welcome the inspectorate’s report into our disclosure handling and will take its findings forward alongside our new five-year strategy,’ the SFO said in a statement at the time of the HMCPSI report’s publication. ‘We continue to support a disclosure reform that works for the digital age and speeds up case outcomes for victims.’
Alex Swan, an officer of the IBA Business Crime Committee, questions whether the additional funding will be enough to allow the agency to make the most of its enforcement powers. ‘A key question is whether the SFO will have sufficient budget to deal with matters it’s currently handling and the new offence of failure to prevent fraud which it will soon have the remit to investigate and prosecute, which it has publicly said it is very keen to utilise,’ he says.
In November the UK government also announced some additional funding for the CPS, which faces a record backlog of cases. The CPS will receive £49m to support victims of crime and hire more staff in its specialist rape and serious sexual offence units.
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