Does the Confiscation System Cost More Than It Delivers?

Largely overlooked in the coverage of the National Audit Office’s (NAO) report on Confiscation Orders (17 December 2013) is the NAO’s findings on the impact of sending offenders who cannot pay their orders to prison, writes Roger Sahota.

Currently defaulters may have to serve up to 10 years in prison in addition to the sentence for their crime if they fail to pay a confiscation order within the time set. Interest payments of 8% per annum add to the amount they owe. Having served a default sentence, they remain liable for the sum due.

The logic behind these draconian measures is the familiar refrain that these deterrent measures are necessary to show fraudsters that ultimately crime does not pay.

But how effective is the threat of prison in encouraging criminals to cough up their so-called ill -gotten gains?

Not very according to the Courts and Tribunals own figures. In 2012 only two per cent of offenders with orders outstanding paid in full once a default sentence was imposed.

Presumably the remaining 98% of offenders will have to serve default sentences at her Majesty Pleasure.

Precisely how many defaulters fall into this category is not known. The numbers are likely to be substantial. The expense of detaining these offenders is also unclear, but we do know that it costs upwards of £40,000 per year to keep someone in prison.

Does the Confiscation System Cost More Than It Delivers?

The NAO report concluded that the confiscation system did not offer value for money to the taxpayer. However, the real picture may be even bleaker than that appreciated by the NAO.   

In 2011-12 the NAO estimated that confiscation orders raised £133m in revenue against a cost to the taxpayer of £100m, leaving a modest surplus of £33m. Against this backdrop, another £1.3 billion pounds is still said to be owed in unpaid orders and the MOJ has conceded that 60% of this amount should be written off.  

But factor in the burden to the tax payer of housing those serving default confiscation sentences, which does not appear to be included in the NAO’s calculations, and there is even more cause for concern.

The cost of enforcing our confiscation laws and of detaining those who default, may far exceed what the system generates in revenue.

The original article can be found at www.confiscationorder.com