The Serious Fraud Office (SFO) should be replaced with a new body dedicated to combating economic crime, a new paper by think tank Institute of Economic Affairs (IEA) has argued.
The paper, which was focused on the UK anti-fraud agency, concluded that after “series of institutional failures” it should be replaced.
According to the National Crime Agency (NCA), fraud is the most commonly experienced crime in the UK, accounting for over 40 per cent of crime in England and Wales.
However, the IEA outlined that the number of fraud convictions has plummeted from 12,378 in 2012 to 3,455 in 2022.
Over 2022/23, the SFO secured four prosecutions “despite spending £76m and employing 450 staff”, the think tank said.
This data covers the tenure of the previous director, Lisa Osofsky, as current boss Nick Ephgrave took over in September 2023.
The IEA has called for the SFO to be reformed into a Serious Economic Crime Office (SECO), as it deems it “would take a more active role in the prevention of economic crime.”
The think tank was clear in its report that is favours a more focus on prevention, with one of the authors David Shepherd stating the “SFO is hamstrung by its focus on criminal justice and courts that are not fit-for-purpose”.
The IEA also suggested that the SFO’s focus on high-profile prosecutions “has diverted resources away from other important areas”, this includes crime prevention and the support of small and medium-sized businesses.
The report believes the “proposed SECO would address these gaps by prioritising a more balanced approach, combining enforcement with preventative measures.”
The report authors stated that the SECO “would keep powers to prosecute serious fraud, but would also have new responsibilities to deter fraud before it occurs,” adding that this office “would be expected to develop good practice advice on prevention in closer collaboration with the private sector”.
In addition, the authors of the report suggest that SECO would be encouraged to embrace alternative justice mechanisms, including deferred prosecution agreements (DPA) and using larger fines.
The SFO already uses DPAs, however, its last listed agreement was July 2021, when it secured two DPAs with two UK-based companies for bribery offences.
Recently, the new director, Ephgrave, detailed his new strategy for the SFO, vowing to push ahead with its plan to pay rewards to whistleblowers and develop a new “pilot programme” to thwart fraud, bribery and corruption.
A SFO spokesperson told City A.M.: “Since 2020, we have returned over £1bn to the UK taxpayer from penalties, successfully prosecuted over 20 individuals and companies, and secured the UK’s largest ever corporate sentence.”