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Will the SFO be ‘demerged’ out of existence?

Theresa May MP, the current UK Home SecretaryThe adage that “everything needs to change, so everything can stay the same” seems to have become almost a mantra for the UK Government. The trouble is that eye catching organizational change often comes at a huge financial cost and loss of operational efficiency.
The “change” normally takes the form of departmental divisions being spun into autonomous agencies (non-ministerial government departments) which are then merged into unwieldy super agencies which when they encounter performance difficulties (often magnified by the media) are then demerged and brought back into central control. Of course, the main advantage of this process is that ministerial responsibility for and association with inevitable high profile shortcomings and lack of resources can generally be avoided until the next reshuffle.

This process has already taken place with the formation and recent disbandment of the UK Border Agency and the UK Passport Agency. So perhaps it does not augur well for the UK’s National Crime Agency (NCA) which comprises the former Serious Organised Crime Agency, parts of the National Policing Improvement Agency, Parts of the disbanded National Fraud Agency, and Child Exploitation and Online Protection Centre.

This week brings two further related stories of NCA-organizational change. The first in the BBC today reports that Theresa May has postponed plans to bring counter-terrorism policing within the NCA. Perhaps, ministerial responsibility for a counter-terrorism performance failure due to organizational change might be a bit too eye catching for comfort, but seemingly not in the case of fraud. Earlier this week, the Financial Times reported that she had dusted off her plans to incorporate the Serious Fraud Office within the NCA. These plans were successfully defeated three years ago by now departed ministerial colleagues.

If the FT’s report is correct, it demonstrates an almost willful ignorance of the reasons why the SFO was formed in the first place. A series of high profile financial scandals and collapsed trials prompted the Government (Conservative) to establish a high powered commission which recommended in 1986 that a unified and specialized detection, investigation and prosecution unit with enhanced investigatory powers was required to tackle serious and complicated financial crime. The balance for those enhanced powers was supposed to be provided by the attorney general. Interestingly, the other main recommendation that fraud investigations and prosecutions should be independently regulated was not taken up.

Circumstances may well have changed since the SFO’s formation that require review, not least its financing, but the suggestion that ministerial, non-consultative and almost whimsical organizational change should threaten or replace a carefully considered and commission-based anti-corruption organization is yet another pretty shameful example of politically motivated “change.”  


Alistair Craig, a commercial barrister practicing in London, is a frequent contributor to the FCPA Blog.

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