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By Kirstin Ridley
LONDON, May 24 (Reuters) - The Serious Fraud Office (SFO),Britain's leading fraud and corruption investigator andprosecutor, said on Tuesday it was re-examining a funding modelthat has been criticised for risking weakening investigationsand delaying cases.
So-called "blockbuster funding", under which the agency canrequest extra cash for costly cases directly from thegovernment, was criticised in a report published on Tuesday bythe Crown Prosecution Service Inspectorate (CPSI), which reviewsthe effectiveness of the SFO's structures and governance.
The CPSI said such a model, which allows the SFO to shore upits staffing levels with external experts for big cases, coulddamage investigations, did not provide value for money andprevented the agency from building future expertise in-house.
It said that when it inspected the agency 21 percent ofstaff were not permanent employees.
"There is therefore an inherent lack of consistency in (SFO)teams, which becomes particularly problematic because of thelengthy nature of SFO investigations," the report said. "Thisdisruption increases the risk of delay in cases and may weakenthe investigative strategy going forward."
The CPSI report, which praised the SFO board for improvingthe reputation of the agency externally over the last fouryears, also suggested other reforms such as a smaller managementboard, appointing a chief executive, clearer reporting anddelegation lines for committees and holistic risk management.
SFO head David Green said in an emailed statement that theagency was "giving new consideration" to a funding model he hassaid in the past is not perfect, but which "does the job".
He said the SFO was also carefully considering recommendations such as appointing a CEO or chief operatingofficer and changing the structure of the management board.
Legal experts have already criticised a funding model theyargue could lead to political interference with cases that canconcern influential blue-chip British companies. The SFO'scurrent caseload includes investigations into Barclays,Rolls-Royce and GSK.
The SFO operates on a core annual budget of around 35million pounds ($51 mln), although extra cash injections to payfor costly cases have pushed that up to around 50 million poundsa year over the last few years.
Its biggest and costliest cases have included theinvestigation into the alleged manipulation of financialbenchmarks such as Libor (London interbank offered rate), whichto date has yielded one conviction and one guilty plea.
Five former Barclays traders are on trial at Southwark CrownCourt and further trials of individuals accused of manipulatingEuribor (euro interbank offered rate) are expected to begin nextyear. ($1 = 0.6838 pounds) (Reporting by Kirstin Ridley; Editing by Susan Fenton)
