Funding cuts hampering police's ability to investigate economic crime, experts say

Although the number of investigations opened by the force increased by 8% in the year to 31 March 2015, the total has fallen by almost 30% over the last four years, from 777 in 2011/12 to 563 last year, according to figures obtained by Pinsent Masons, the law firm behind Out-Law.com. Corporate crime expert Barry Vitou of Pinsent Masons said that the downward trend came despite the large number of leads passed to the authorities by central body Action Fraud.

"The fact that there are fewer investigations does not, unfortunately, mean that white collar crime rates are down," he said. "It is simply another indication that the bodies tasked with tackling the issue are ill-equipped to do so."

"The sharp decline in investigatory work seems at odds with a backdrop of high value fraud and major corporate scandals across the City and global financial services industry – including convictions for LIBOR-rigging and international probes into precious metals price fixing. Law enforcement bodies are facing new challenges: the rise and increasing sophistication of cyber crime has made tackling wrongdoing more difficult than ever. The government needs to be sure that the force is well-resourced enough to deal with the task in hand," he said.

The City of London Police's budget has fallen by 15% over the past five years, according to Pinsent Masons. Due to its location within the global financial centre of London's 'square mile', the force has particular expertise in dealing with fraud and other economic crimes. It also took over the operation of Action Fraud, the UK's national fraud and cybercrime reporting centre, last year.

Fraud and asset recovery expert Alan Sheeley of Pinsent Masons said that the figures were a "disgrace" when compared to the 230,000 reports made to Action Fraud over the same period.

"This is not necessarily because of the lack of drive or ability of the law enforcement agencies but because of the lack of funding and resources," he said. "If businesses and the public at large truly knew the failings of law enforcement agencies, I am sure more pressure would be borne by the public on focussing the government on this area."

"Law enforcement agencies are allowing businesses and members of the public to proceed under a false pretence: that reporting a fraud will lead to a conviction and the recovery of their assets. Clearly, as evidenced by these figures, this is not the case. Law enforcement agencies cannot cope and they should be telling victims of the alternative route available: civil fraud proceedings that only focus on asset recovery, which is a victim's primary concern," he said.

Despite recent high profile successes, including a multi-agency fraud operation led by the City of London Police which has resulted in "dozens" of arrests and fines, the number of people prosecuted for fraud and corruption offences has also fallen over the past four years. Figures obtained by Pinsent Masons earlier this year showed a drop in prosecutions for these offences from 11,261 in 2011 to 9,343 in 2014.

"The slight pick-up in activity over the last year is promising but there is clearly still work to be done: the police cannot effectively crack down on the most serious and damaging fraud without increased funding and stronger support from politicians," said Vitou.

"The government has taken some steps to clamp down on economic crime – we've seen some tough sentencing for high-profile criminals recently and the launch of the UK's first Ant-Corruption Plan last year. Politicians now need to make sure that they follow through and ensuring law enforcement agencies are better equipped will be crucial," he said.