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Report on Northern Ireland Courts and Tribunals Service Trust Statement for the year ended 31 March 2013

Session: 2014/2015

Date: 10 December 2014

Reference: NIA 215/11-16

ISBN: 978-0-339-60550-3

Mandate Number: 2011/16

NIA 2151116.pdf (2.69 mb)

Executive Summary

1. Financial penalties can be imposed by the Courts, Police Service of Northern Ireland (PSNI) and the Driver and Vehicle Agency for a wide range of reasons. These impositions include fixed penalty notices, court imposed monetary penalties and confiscation orders. In his report on the Northern Ireland Courts and Tribunals Service (NICTS) Trust Statement 2012-13 the Comptroller and Auditor General (C&AG) highlighted that the value of unpaid financial penalties is significant and raised concerns about fine collection and enforcement measures and the system for dealing with fine defaulters.

2. NICTS acts as an agent responsible for the collection of these financial penalties. From May 2009 fines not paid by their due date were passed to the NICTS Fine Collection Scheme Office. If follow up processes were unsuccessful in recovering the fine a warrant of commitment would be issued by the courts to PSNI for enforcement. While the warrant was for the arrest and imprisonment of the defaulter it could also be executed by the defaulter making a payment in cash to the Police Officer serving the warrant.

3. The NICTS Trust Statement 2012-13 shows total debt for unrecovered financial penalties of £19 million, against which NICTS estimate that £6.5m will not be recovered. Included within the overall debt figure is £8.2 million relating to outstanding warrants issued because fine default has occurred, £5.1 million of which is estimated to be unrecoverable. It is vital that the justice system sends out the right message and it is essential, therefore, that NICTS makes every effort to fully recover financial penalties.

4. Despite the significant levels of outstanding debt, the Department of Justice has failed to coordinate a joined up approach to fine collection and, as a result, current governance arrangements are unacceptable. This has contributed to a number of failings including 6,682 paper warrants with a value of £1.1 million have gone missing and there is a significant suspected fraud. Going forward, it is vital that roles and responsibilities are well defined and accountability and reporting lines should be clear.

5. The costs associated with enforcing the current system are significant and include NICTS operational costs; an estimated £3 million of police officer time each year enforcing warrants; a full cost to the Northern Ireland Prison Service of approximately £1.4 million per year; and a cost to NICTS of £170 in terms of court time and legal aid fees each time a financial penalty case is presented. While the Committee recognises that it is inevitable that there will be a cost associated with enforcing and collecting financial penalties, the costs associated with the current system are excessive. Reform is urgently required and should seek to remove PSNI from the process.

6. The C&AG’s report on the NICTS Trust Statement 2012-13 has brought to light a number of unacceptable weaknesses and inefficiencies with the current system of fine enforcement and collection, which have the potential to have a detrimental impact on the credibility of the justice system. While the Committee is encouraged by the reforms being developed by the Department, it is disappointed that reform has not taken place sooner. Reform must be implemented as a matter of urgency to address the problem of fine default, which is the root cause of the problems highlighted in this report.

Summary of Recommendations

Recommendation 1

The Committee recommends that NICTS should put in place a robust system to identify an individual’s ability to pay before a fine is imposed. This would allow the court to consider options at the outset to prevent fine default, including instalment orders, non-monetary supervised activity orders and other measures, such as deductions from earnings or benefits.

Recommendation 2

The governance arrangements and control structures in place over fine collection and enforcement are unacceptable. The Committee recommends that, roles and responsibilities are well defined and accountability and reporting lines should be clear. NICTS should monitor all warrants issued and PSNI should ensure that robust reconciliations are undertaken between warrants executed and cash collected. In the Committee’s opinion the Department should be providing effective oversight and co-ordination, with regular reporting of performance to Senior Management and the Board.

Recommendation 3

The Committee recommends that targets should be set to ensure that all warrants are executed on a timely basis. NICTS should undertake regular reconciliations of all warrants issued to the PSNI and should seek explanations for warrants that have been outstanding for more than six months.

Recommendation 4

The Committee recommends that the Department ensures that alternative methods for collecting outstanding fines are implemented immediately, ahead of the wider reform programme. The new measures should include a system for making payment by a debit card at a police station. This would help to eliminate the risk associated with cash collection. Where cash collection is unavoidable rigorous controls should be implemented to help mitigate the risks.

Recommendation 5

The costs associated with fine enforcement are, in the Committee’s view, excessive and the current system is neither efficient nor effective. The Committee strongly recommends that the system is reviewed as a matter of urgency with a view to largely removing PSNI from the process and replacing it with a civilian collection service. This would help to release resources for front line police work. Further, the Committee recommends that consideration should be given to whether committal remains an appropriate sanction and a greater emphasis should be placed on ensuring that defendants pay the fine imposed rather than serving a prison sentence.

Recommendation 6

The timetable for reform has already slipped and the Committee recommends that the Department takes all steps necessary to re-examine the current legislative timeframe and, at the very least, take all the necessary steps to ensure that there is no further slippage. A key objective of reform should be to ensure the system represents value for money and makes the best use of the limited public resources available.

Introduction

1. The Public Accounts Committee (the Committee) met on 22 October 2014 to consider the report of the Comptroller and Auditor General on Northern Ireland Courts and Tribunals Service (NICTS) Trust Statement for the year ended 31 March 2013. The witnesses were:

Mr Nick Perry, Accounting Officer, Department for Justice (DoJ);

Mr David Lavery, Director of Access to Justice, DoJ;

Ms Jacqui Durkin, former Chief Executive and Accounting Officer, NICTS;

Mr Mark Hamilton, Assistant Chief Constable Service Improvement Department, Police Service of Northern Ireland (PSNI);

Mr Kieran Donnelly, Comptroller and Auditor General (C&AG); and

Mr Jack Layberry, Tresury Officer of Accounts, Department of Finance and Personnel.

2. Financial penalties can be imposed by the Courts, PSNI and the Driver and Vehicle Agency for a wide range of reasons. These impositions include fixed penalty notices, court imposed monetary penalties and confiscation orders.

3. NICTS acts as an agent responsible for the collection of these financial penalties. From May 2009 fines not paid by their due date were passed to the NICTS Fine Collection Scheme Office. If follow up processes were unsuccessful in recovering the fine a warrant of commitment would be issued by the courts to PSNI for enforcement. While the warrant was for the arrest and imprisonment of the defaulter it could also be executed by the defaulter making a payment in cash to the Police Officer serving the warrant.

4. The NICTS Trust Statement 2012-13 shows total debt for unrecovered financial penalties of £19 million, against which NICTS estimate that £6.5 million will not be recovered. Included within the overall debt figure is £8.2 million relating to outstanding warrants issued because fine default has occurred , £5.1 million of which is estimated to be unrecoverable.

5. In taking evidence, the Committee examined five themes:

The value of outstanding debt;

Governance arrangements;

Cash collection;

The cost to the public purse of fine enforcement and collection;

Reform to fine enforcement and collection.

Value of Outstanding Debt

6. The level of payment default is alarming. Financial penalties are imposed as a punitive measure to deter undesirable behaviour and the credibility of using financial penalties is reliant on successful enforcement and collection. The 2012-13 NICTS Trust Statement valued the total debt outstanding at £19 million of this £14 million has been outstanding for more than one year.

7. The value of outstanding warrants is £8.2 million, which effectively represents the cumulative value of long standing financial penalties where collection measures have failed and payment default has occurred. NICTS estimate that £5.1 million (62 per cent) of the outstanding warrant balance will not be recovered. The Committee considers this to be unacceptable as it potentially undermines public confidence in the justice system and prevents the discharge of criminal liability.

8. It is vital that the justice system sends out the right message and it is essential, therefore, that NICTS makes every effort to fully recover financial penalties. The current level of outstanding debt and impairment could be an indication that the financial penalties have not been appropriately set or imposed by the court to match an individual’s circumstances. NICTS outlined that measures exist to allow individuals to make the court aware of their employment status and financial means before a financial penalty is imposed, however very few individuals make use of these measures.

Recommendation 1

The Committee recommends that NICTS should put in place a robust system to identify an individual’s ability to pay before a fine is imposed. This would allow the court to consider options at the outset to prevent fine default, including instalment orders, non-monetary supervised activity orders and other measures, such as deductions from earnings or benefits.

Governance Arrangements

9. Under the current fine collection system NICTS is responsible for enforcing financial penalties imposed by the courts and accountable for income received. NICTS are also responsible for generating a warrant of commitment when fine default occurs. PSNI is responsible for serving and executing the warrant through arrest or receipt of the associated fine.

10. For this system to operate effectively it is essential that the key stakeholders work together however the Committee found no evidence of this, indeed, the Department of Justice (the Department), NICTS and PSNI appear to have been operating in silos. This flaw in governance arrangements is highlighted by NICTS who told the Committee that it considered its job was done once a warrant was issued to PSNI. In the Committee’s view, the Department failed to coordinate a joined up response to fine collection, resulting in several failings and weaknesses ranging from missing paper warrants and a suspected fraud, through to high levels of outstanding debt. Poor governance arrangements identified by the Committee include limited monitoring and reporting of warrants, insufficient reconciliations between NICTS and PSNI for outstanding warrants and a lack of basic controls.

Recommendation 2

The governance arrangements and control structures in place over fine collection and enforcement are unacceptable. The Committee recommends that, roles and responsibilities are well defined and accountability and reporting lines should be clear. NICTS should monitor all warrants issued and PSNI should ensure that robust reconciliations are untaken between warrants executed and cash collected. In the Committee’s opinion the Department should be providing effective oversight and co-ordination, with regular reporting of performance to Senior Management and the Board.

Missing Paper Warrants

11. Warrants of commitment are issued where payment default occurs and follow up enforcement measures are unsuccessful. Issued by a Judge, they carry the written authority by which the court empowers PSNI to commit a person to prison. The Committee therefore considers warrants to be very important documents for enforcing the authority of the court and the will of the justice system.

12. It is unacceptable, therefore, that 6,682 paper warrants with a value of £1.1 million have gone missing. The Assistant Chief Constable told the Committee that PSNI has no record of the missing warrants and can only speculate as to why warrants cannot be located. NICTS has recalled 5,276 of the missing paper warrants for review and to date 3,862 have been remitted. Despite the fact that some of the missing paper warrants have been outstanding for several years, NICTS told the Committee that it only became aware of the missing paper warrants in 2011-12. The Committee considers that NICTS and PSNI have been grossly negligent in their handling of these documents.

Recommendation 3

The Committee recommends that targets should be set to ensure that all warrants are executed on a timely basis. NICTS should undertake regular reconciliations of all warrants issued to the PSNI and should seek explanations for warrants that have been outstanding for more than six months.

Cash Collection

13. Once a warrant has been served it can be executed in a number of ways including payment in cash. However, cash based systems are inherently risky. In March 2012 a formal investigation commenced into irregularities noted as a consequence of a reconciliation process between PSNI and NICTS which identified a number of outstanding receipts for warrants which had been recorded as executed by payment to PSNI but NICTS had not received payment. Arising from this the Committee is aware of a significant suspected fraud of £52,789.

14. The Assistant Chief Constable acknowledged that a lack of basic controls had left the PSNI and NICTS vulnerable to the risk of potential fraud and was unable to give the Committee assurance that there were no other frauds perpetrated.

Recommendation 4

The Committee recommends that the Department ensures that alternative methods for collecting outstanding fines are implemented immediately, ahead of the wider reform programme. The new measures should include a system for making payment by a debit card at a police station. This would help to eliminate the risk associated with cash collection. Where cash collection is unavoidable rigorous controls should be implemented to help mitigate the risks.

The cost to the public purse of fine enforcement and collection

15. The Committee has concerns about the efficiency of the system in recovering financial penalties. There are a number of costs associated with the current system including:

NICTS operational costs;

An estimated £3 million of police officer time each year enforcing warrants;

A full cost to the Northern Ireland Prison Service of approximately £1.4 million per year; and[1]

A cost to NICTS of £170 in terms of court time and legal aid fees each time a financial penalty case is presented.

16. During 2012-13 £2.3 million of financial penalties were recovered through the execution of outstanding warrants by payment. The Committee considers it unacceptable that PSNI incurred approximately £3 million in Police Officer time executing £2.3 million of warrants through payment. This is not a cost effective or appropriate use of PSNI resources and time.

17. Under the current system significant costs are incurred in enforcing and collecting financial penalties, the majority of which have a monetary value of less than £500. The Committee recognises that the fine system is primarily about enforcing the judgement of the court. A robust justice system is imperative and, while the Committee is not advocating that debt should be written off because there is a cost associated with collecting it, it is the Committee’s view that there must be a more cost effective way to successfully enforce and collect financial penalties.

Recommendation 5

The costs associated with fine enforcement are, in the Committee’s view, excessive and the current system is neither efficient nor effective. The Committee strongly recommends that the system is reviewed as a matter of urgency with a view to largely removing PSNI from the process and replacing it with a civilian collection service. This would help to release resources for front line police work. Further, the Committee recommends that consideration should be given to whether committal remains an appropriate sanction and a greater emphasis should be placed on ensuring that defendants pay the fine imposed rather than serving a prison sentence.

Reform to fine enforcement and collection

18. The Department is currently drafting a Fines and Enforcement Bill and anticipates that it will be introduced into the Assembly in early 2015. The aim of the Bill is to provide a new approach to the payment, enforcement and collection of fines. The Department outlined that the focus will be on the establishment of a civilian based Fine Collection and Enforcement Service, moving away from a police arrest warrant model. The new service will, under court authority, collect fines and agree payment periods and methods, including deductions from a defendant’s earning or social security benefits and reparative work under Supervised Activity Orders. New powers within the regulated framework will also allow seizure of vehicles and access to bank accounts where payment default has occurred.

19. The Committee welcomes the reform and the development of draft legislation, however it is disappointing that it has taken so long. The problem of fine default is not a new one. Consultations in 2008, 2011 and 2014 focused on weaknesses with fine enforcement and collection, however the justice system has been slow to innovate and modernise.

20. The Department outlined that it will take to the end of 2016 to implement new legislation and make the new service operational. The Committee fails to understand why reform cannot be expedited to address the weaknesses outlined above sooner. The Department gave the Committee assurance that reform is a key strategic objective for the Department and the Minister. In the Committee’s view, the Department must ensure that priority is given within its legislative programme to this reform.

21. The Committee is concerned that the current system is inappropriate and an expensive use of Police, Courts and Prison Services. The Department has reported that the cost of the new collection arrangements will reduce to £1.8 million per annum.

Recommendation 6

The timetable for reform has already slipped and the Committee recommends that the Department takes all steps necessary to re-examine the current legislative timeframe and, at the very least, take all the necessary steps to ensure that there is no further slippage. A key objective of reform should be to ensure the system represents value for money and makes the best use of the limited public resources available.

[1] Based on an apportionment of total NIPS costs. During 2012-13 there were 2,473 receptions to prison in respect of fine defaulters. On the basis that prison sentences for fine default are very short and are generally only for 3-4 days, the total number of prison days per annum for fine defaulters is in the region of 8,600. This equates to approximately 23 full time prisoners and, based on the annual cost per prison place of £62,898 quoted in the most recent NIPS Annual Report, an annual cost in the region of £1.4 million.

The Full report can be downloaded here.

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