Courts owed £1.3bn in unpaid fines, audit reveals

Courts in England and Wales are owed £1.3bn in unpaid fines, confiscation and compensation orders.

The figures were revealed by a National Audit Office (NAO) report into financial management at the Ministry of Justice (MoJ).

The watchdog said the department was not operating "best practice" and did not fully understand its own finances.

The MoJ said it was carefully examining areas marked for improvement before it embarked on an action plan.

Problem areas

The department's primary activities have a budget of £10.1bn.

The watchdog identified several weaknesses in the way the government department manages its budgets and said that without urgent action, the MoJ would not be able to deliver the efficiencies it needed to make.

Amyas Morse, head of the NAO, said the department had a lot of work to do, although he acknowledged it had already identified many problem areas.

He said: "The financial management of the Ministry of Justice, both at its headquarters and its arm's length bodies, has improved but it falls short of established best practice in three significant areas."

He said the department did not have a "consistent approach" over managing its finances, lacked a full understanding of its activities and costs and had not yet integrated its financial systems and processes.

He said this reduced the department's "ability to monitor its overall budgetary position".

In his budget last month, Chancellor George Osborne said departments would face average cuts of 25% when the government's public spending review was completed in October.

On Sunday, Transport Secretary Philip Hammond said some departments could see cuts of between 25% and 40%.

But the NAO has warned that officials working for the MoJ do not understand in enough detail the costs of prisons, probation and courts and failed to spot financial irregularities in legal aid funding.

In the report the NAO said the department's "complex delivery mechanisms and accountability structures" made it difficult for the MoJ to be consistent.

Clear timetable

Since the department was established in 2007, it had been affected immensely by government changes, it said.

This included the creation of the National Offender Management Service agency in April 2008, which represented some 49% of the MoJ's overall expenditure during the 2008/2009 financial year.

These changes have also meant that the ministry is now in charge of a number of financial "data systems" which the NAO said were hard to control.

The NAO's report also discovered that the value of unpaid financial penalties imposed by the courts had increased by £410m in three years to £1.3bn - but only 34% was considered by ministers to be recoverable.

The NAO used a variety of techniques to examine the ministry's finances. These included interviewing officials, examining financial performance targets and analysing departmental reports, board meeting papers and information provided by other bodies.

Mr Morse said the department had not yet provided a clear timetable for the improvements.

"This timetable needs to be established with urgency and we recommend that it is put in place within the next four months," he said.

John Thornhill, chairman of the Magistrates' Association, told the BBC the report was "scathing".

"The figures are actually staggering," he said.

"Magistrates will be angry that they are imposing proper, proportionate court orders and those responsible for implementing and managing the orders of the court would appear to be, at least, not doing the job properly and it could be considered by some to be negligent."

Mr Thornhill added: "There's £150m of compensation there to victims who have suffered either physical abuse or stress, and they're going to continue to suffer that stress because they're not getting the just compensation that the court has properly ordered."

A MoJ spokesman said it welcomed the report and added: "We acknowledge the areas for improvement identified by the NAO and we are considering them carefully before we agree on an action plan to address them."

(Published by BBC July 6, 2010)

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