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Sir, The recent major fraud case involving HBOS highlights a serious problem in how the investigation of major fraud is funded (“Lloyds is not the victim in the sorry HBOS fraud saga”, Inside Business, April 10). Current estimates put the amount of fraud, usually cyber enabled, at somewhere between £100bn and £200bn a year. The very fact that this estimate is so wide makes the point that it is neither understood nor being dealt with.
Currently the Serious Fraud Office (SFO) and City of London Police receive considerably less than £50m to counter this. Police forces receive no earmarked funding to investigate major fraud, and so when investigations are undertaken they are to the detriment of sorting out all other forms of crime. In the HBOS case it cost Thames Valley Police nearly £7m and tied up a great number of officers and staff over six years. If Thames Valley had not taken on this case, which lost HBOS nearly £1bn and destroyed many small companies, no other organisation would have. Smaller police forces have neither the resources nor officers and staff to take on cases of this magnitude. Only a small fraction of major fraud is ever investigated, and, in the HBOS case, if Thames Valley had not taken on the task, it would not have been prosecuted.
Most of the money defrauded goes abroad, and is lost to the UK economy. To lose between £100bn and £200bn a year seems careless when, if the police, SFO and the City of London Police were funded properly, it could be greatly reduced. The answer is simple: invest to save, and do so to the tune of £500m a year. This should be a direct Treasury grant, not top-sliced off the Home Office police budget. Fraud units should be part of the serious organised crime units that are based at a regional level. The SFO should provide a central co-ordinating function and deal with cases that direct involve overseas companies. The City of London Police should co-ordinate the multiple small cyber-enabled frauds and distribute the cases for action at a regional level.
Until major fraud is taken a great deal more seriously, and the fight against it is funded properly by the Treasury, it will continue to be a major drain on the UK economy, and a danger to the credibility of our banking system.
Police & Crime Commissioner for Thames Valley,
Kidlington, Oxon, UK
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