Government to audit FCA and HMRC

Government to audit FCA and HMRC

The government is to launch an audit of organisations that fight financial crime in the UK, including the Financial Conduct Authority and the FCA.

Top journalist Caroline Binham says the huge review is being carried out by the Cabinet Office ‘amid growing concern that London is awash with dirty money.’

Operation

The review will also look at the operation of the Serious Fraud Office, the National Crime Agency and the Competition and Markets Authority (CMA).

Home Secretary Amber Rudd hinted at the review in December last year when she said: “The Cabinet Office will look at the UK’s response to economic crime more broadly.

“This will include looking at the effectiveness of our organisational framework and the capabilities, resources and powers available to the organisations that tackle economic crime.”

No confidence

All five of the organisations have come under criticism in the past with the FCA surviving a vote of no confidence in the House Of Commons in February of 2016.

The motion came from back-bench MP, Conservative Guto Bebb and said: “This House believes that the FCA, in its current form, is not fit for purpose and we have no confidence in its existing structure and procedures.”

The wide ranging debate accused the UK’s financial regulator of being ‘weak, toothless and anaemic’, but it ran out of time before a vote could be taken on the no confidence motion.

Sustained criticism

The Serious Fraud Office (SFO) has come under sustained criticism for failing to gain convictions in headline cases it has undertaken.

It also survived an attempt to merge it with the National Crime Agency by Theresa May when she was Home Secretary.

However, the SFO has had some success recently with a £671 million fine imposed on Rolls Royce and is awaiting decisions on cases involving firms like Tesco over historic accounting irregularities.

Investigation

An investigation of the National Crime Agency (NCA) by the Mail On Sunday in July 2015 claimed ‘Britain’s FBI’ was ‘mired in chaos, failure and plunging morale’ following a spate of top level resignations.

They have also been labelled as ‘incompetent’ and ‘systematically flawed’ by an Old Bailey judge after officers unlawfully used search warrants to plant a surveillance device without warning magistrates.

Step down

Lin Homer, head of Her Majesty’s Revenue & Customs (HMRC) is about to step down following criticism from MPs over her organisation’s failures to answer calls from the public and her handling of the HSBC tax scandal.

She apologised in November after it was revealed that HMRC’s main call centre failed to answer a quarter of all calls made by the public.  The public accounts committee said the organisation seemed ‘incapable of running a satisfactory service.’

CMA

The Competition and Markets Authority (CMA) now looks after many of the functions of the Competitions Commission and the Office Of Fair Trading.

It came under fire in August of last year for failing to deliver the sweeping reforms expected of Britain’s retail banking sector with consumer organisations like Which? and influential MPs like Andrew Tyrie, chairman of the House of Commons Treasury Select Committee, complaining that the suggested reforms had not gone far enough.

Craig Donaldson, chief executive of Metro Bank, said he was “astonished” by the CMA’s decision. He claimed the organisation had squandered “a rare opportunity to support and develop competition in banking” and instead merely “tinkered around the edges”.

Refused

The Cabinet Office has refused to make available its full terms of reference, saying the review was ‘an internal assessment,’ but it is understood that all options are being considered including either merging or scrapping agencies.

Campaign group, Corruption Watch, said: “The UK clearly needs to up its game on fighting economic crime. Changing our corporate liability laws and introducing economic crime courts are essential steps for doing that.”