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HMIC REVIEW INSPECTION 2004
SCOTTISH DRUG ENFORCEMENT AGENCY

December 2004

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CONTENTS

1 INTRODUCTION
2 SUMMARY OF FINDINGS
Summary of Recommendations
3 RECOMMENDATIONS OF THE 2003 PRIMARY INSPECTION
4. ADDITIONAL AREAS FOR CONSIDERATION

1. INTRODUCTION

1.1 Her Majesty's Inspectorate of Constabulary (HMIC) has a statutory duty under section 33(3) of the Police (Scotland) Act 1967 to report to the Scottish Ministers on the effectiveness and efficiency of the police service in Scotland. It discharges this duty through an inspection programme that involves primary and review inspections of forces and common police services and through conducting thematic inspections on areas of particular interest or concern.

1.2 HMIC scrutiny is structured around a five yearly inspection cycle. The primary inspection, which initiates the process, comprises a comprehensive examination of all aspects of force activity at a more strategic level with subsequent field work focusing on areas of business which attract particular attention due to performance levels, variations from common practice or concerns identified about the approaches followed. The process also seeks to identify good practice from which other forces or common services could learn. The primary inspection is followed by two review inspections at 18-month intervals. These reviews will focus on:

• Progress against the recommendations made in the preceding primary inspection.
• Progress against the recommendations made in recent thematic inspections.
• Items nominated by the Agency regarding its current position and issues seen by the Agency as representing significant challenges in the future.
• National developments in policing.
• Events or developments relevant to the Agency as identified through the environmental scanning process by HMIC Knowledge Management Unit.
• Outcomes of the Agency's self-assessment and internal inspection work.
• Outcomes of other external scrutiny, for example, Scottish Executive Audit and Accountancy Services Division and Audit Scotland studies and audits.
• Review of performance information - leading to a risk assessment led focus on any area seen as under-performing.

1.3 In line with HMIC's inspection programme, the Agency was the subject of a review inspection in December 2004. The period takes account of all stages of the inspection process, including research, inspection and reporting activities.

1.4 HMIC methodology for review inspections involves the preparation of an appropriate set of questions to address the issues selected from the list shown in paragraph 1.2. This facilitates a structured and relevant examination of the organisation and ensures the inspection is evidence based.

1.5 This Review Inspection takes account of the Agency's response to the recommendations contained within the primary inspection report carried out in 2003 and progress is reported on. HMIC recognises that the recommendations require to be carefully considered by the Agency, often have resource implications and may need to be approached in a phased and prioritised way.

1.6 The Agency may choose not to follow or adopt an HMIC recommendation and set out an argued case for not doing so. In turn, HMIC may comment on this but the debate is a public one for the Scottish Ministers and the wider public to take a view.

1.7 This review, which is made public through the HMIC website, contributes to the transparency and accountability of the Agency.

2. SUMMARY OF FINDINGS

2.1 HMIC's Primary Inspection of the Agency in 2003 identified a total of 21 recommendations. Of the 21 recommendations, 8 were for consideration by the SDEA, 6 by the Standing Committee of Chief Constables (SCCC) and 7 by the Association of Chief Police Officers in Scotland (ACPOS). Following publication of the report, an ACPOS sponsored review examined the recommendations falling from the inspection.

2.2 The resulting reports identified the need for a wider strategic perspective, with operational activity reflecting the Scottish Strategic Assessment within the United Kingdom Threat Assessment. As a result of these developments, a Programme Board, representing key stakeholders, was established to oversee the change programme. A Strategic Development Unit was established within the Agency to manage the change programme.

2.3 HMIC found that ACPOS and the Agency have embraced the change management process in order to address the recommendations and, of the 21 recommendations contained in the Primary Inspection Report, 7 can be discharged, with the remainder being the subject of further examination at the next review inspection. The high quality of the response to the inspection protocols received by HMIC reflects the strong commitment from all involved, and the management processes put in place to drive the change are robust and properly structured. In this regard, the newly formed Strategic Development Unit has contributed substantially to the progress made.

2.4 In 'A Partnership for a Better Scotland: Partnership Agreement (2003)', the Scottish Executive gave a commitment to expand the Scottish Drug Enforcement Agency and HMIC recognises the support given to it. This enables the new measures adopted by the Agency to be carried forward, providing a clear focus for a robust Scottish response to serious organised crime in liaison with the UK-wide arrangements now being put in place for the Serious Organised Crime Agency. With the introduction of this new legislation it is important to recognise the vital role that the Agency is to play in many of the recommendations made by HMIC in 2003. In that regard HMIC urges ACPOS, in consultation with the Scottish Executive, to seek early implementation of an agreed strategy for the Scottish police service response to organised crime.

2.5 As part of this Review Inspection, HMIC asked the Agency to provide information on a number of topics, which were identified through the process described at paragraph 1.2. This resulted in the inspection protocol extending to a detailed examination of:

• Race Relations (Amendment) Act 2000 in relation to Race Equality Schemes
• The Agency's commitment to Best Value
• The Agency's response to enhance access and facilities as required by the Disability Discrimination Act
• The Agency's update on progress of the implementation of Airwave communication technology
• The Agency's approach to the full implementation of the Freedom of Information Act
• Developments which have taken place within the Scottish Money Laundering Unit since the Primary Inspection
• The management arrangements in place to ensure effective provision of service by the Scottish Witness Liaison Unit
• The management arrangements in place within the National Hi-Tech Crime Unit (Scotland)

While a more detailed analysis can be found at Section 4, HMIC found that the Agency is actively addressing each of these areas and demonstrating clear progress.

2.5 SUMMARY OF RECOMMENDATIONS

3. RECOMMENDATIONS OF THE 2003 PRIMARY INSPECTION

3.1 Recommendation 1

The SCCC urgently seeks agreement on finalising the Management Statement and Financial Memorandum and the Operational Protocol with Scottish forces.

The Management Statement and Financial Memorandum remain in draft pending the Agency's creation as a separate statutory body. Legislation to give the Agency a statutory basis is proposed in a Police Bill in 2005. Proposals have been made to define the governance arrangements for the Agency, post 2006, that will address the financial management issues and define the relationship with Scottish forces and the Scottish Executive. ACPOS raised the matter with the Scottish Executive in response to HMIC's recommendation. However, with the endorsement of the Scottish Executive Audit Services, the document will remain in draft and kept under review to ensure that key requirements of the sponsorship framework are codified and updated to provide a sound basis for sponsorship of the SDEA pending SDEA legislation.

The Operational Protocol between the SDEA and the Scottish police forces was agreed at the ACPOS Crime Standing Committee and endorsed by the Standing Committee of Chief Constables (SCCC) in April 2003. HMIC is satisfied that the operational protocol provides a framework within which to plan and conduct operations on a national and/or joint basis with Scottish police forces, without being over-prescriptive in format.

During the fieldwork, HMIC became aware that senior officers from a number of forces believed that the success of joint operations could be managed more positively in terms of media exposure. HMIC acknowledges that some joint operations contain sensitive issues that do not lend themselves to such publicity, however, the Operational Protocol contains reference to Media Strategy and due consideration should be given to this with regard to joint operations.

Despite the need for legislation as proposed and the continuing debate over governance of the Agency, HMIC is pleased to note the positive progress being made in implementing the operational protocol. HMIC continues to advocate the need for strong governance of the Agency and looks forward to reviewing progress made on this recommendation at the next review.

3.2 Recommendation 2

The SCCC, in liaison with the Scottish Executive, reviews the Agency's mission statement, aims, objectives and targets to reflect its overarching responsibility for responding to serious and organised crime.

Following the Primary Inspection of the SDEA in 2003, ACPOS sponsored a review to examine the recommendations. The resulting reports identified the need for a wider strategic focus with operational activity aligned with the Scottish Strategic Assessment. A Programme Board, representing key stakeholders from ACPOS and the Scottish Executive, was formed in November 2003, and, during January 2004, the Board initiated a change programme with the following objectives:

1. To develop a flexible and effective organisation capable of taking the lead role in the Scottish response to serious organised crime, and achieving an effective compatibility with SOCA, ensuring an effective UK response to serious organised crime as defined by the United Kingdom Threat Assessment.
2. To strengthen the organisation, enabling it to fully support the above objective and prepare it for statutory status.
3. To provide an effective response to the recommendations arising from HMIC's Primary Inspection of the SDEA in 2003.

Within the Agency a Strategic Development Unit has been established and a Strategic Direction Project has commenced, with the project brief having been presented to the Programme Board. It is intended that the project will deliver the Strategic Plan for 2005, outlining a new vision, mission, aims and objectives. HMIC noted that the project documentation provided during the inspection followed Prince 2 project management methodology, and that the comprehensive response to the main strategic issues was underpinned by a strict adherence to this discipline. It is, however, of some concern that the only fully trained member of the team, in terms of Prince 2, will be returning to force during the next few months, creating a gap in project management during a period of significant strategic development. The Agency will wish to consider the means by which it maintains rigour in project management in the longer term.

In December 2004, senior management within the Agency participated in a strategy mapping workshop which allowed for discussion around a new vision and mission statement for the Agency. Facilitated by a Strathclyde Business School consultant, the outcome resulted in five strategic aims along with a number of high level objectives. A strategy map was produced as a result of the discussions and this will form the basis of the Corporate Plan 2005-2008, subject to ratification by the Programme Board.

HMIC acknowledges the work being carried out by the Agency in respect of this recommendation and welcomes this structured approach to determining the strategic direction and the priorities of the Agency in what is seen to be a fluid operating environment, pending development of working arrangements with SOCA and the move to a more formal legal framework for the Agency. HMIC has been sighted on the developments of the Agency's strategy workshop and, although in the early stages of corporate development, notes that the key strategic themes incorporate the broader aspects of serious organised crime, as opposed to a narrower drugs focus. HMIC also recognises that the draft SOCA Bill presents particular challenges to the Scottish police service and the Scottish Executive and believes that the necessary linkage must be maintained with those concerned during the consultative and drafting process in order to secure a proper operating environment in which serious organised crime can be tackled effectively.

HMIC also recognises the work currently being carried out in terms of integrating meaningful performance measures into the emerging objectives to provide a global picture of Agency impact. (A detailed account of the introduction of the Balanced Scorecard is provided in response to Recs 20 and 21). HMIC notes the high degree of internal consultation and commitment to redefine key strategic areas and focus Agency activity accordingly. Subject to approval by the Agency's Programme Board, HMIC looks forward to examining developments in this area during the next Review Inspection.

3.3 Recommendation 3

ACPOS, in liaison with the Scottish Executive, reviews the role of the Agency with regard to its contribution to the overall strategy in relation to non-enforcement issues.

The Strategic Development Unit, as part of the overall change programme, will review the role of the National Drug Co-ordinator and the non-enforcement aspects of the Drug Strategy Unit. This is intended to make best use of the resources. HMIC recognises the value of the Co-ordinator role, particularly in terms of maintaining a national overview of progress of the ACPOS Drug Strategy and providing appropriate strategic linkage with the Scottish Executive Substance Misuse and Justice Division with regard to policy development. ACPOS has long accepted a more wide-embracing role in terms of demand reduction, than simply one of enforcement and HMIC is content that the role of the National Drug Co-ordinator will add value within this context.

Following the Primary Inspection, further consideration has been given to the non-enforcement aspects undertaken by the Agency and this formed part of the discussion during the strategy mapping workshop. The issue of non-enforcement as an area of activity for the Agency was considered to be a key part of the overall strategy. A significant number of the Agency's draft objectives related to non-enforcement issues and this raises questions in terms of current capacity and additional resourcing required to allow the National Drugs Co-ordinator to move forward. HMIC noted that the Agency was examining a performance management framework, specifically the process of measuring the impact of its non-enforcement activity, and it looks forward to examining developments in this area during the next review inspection.

3.4 Recommendation 4

ACPOS, on behalf of forces, in conjunction with the Agency and other organisations to which officers are seconded, review their procedures for maintaining regular contact with seconded officers to ensure their career development arrangements are fully considered.

Since the Primary Inspection a system has been introduced which allows officers to access information from their home force, within a shared drive on the computer network. This is accessible to all staff and contains current information on, for example, promotions, transfers and procedures. HMIC noted that one force has already provided intranet access to seconded officers by way of a web-based browser and another force is exploring a web-based e-mail system. HMIC would encourage other forces to explore this option.

The Agency has introduced a 'Return to Force' pro-forma which is intended to provide the officer's home force with skills and knowledge obtained during secondment to the Agency, thus aiming to assist in finding a suitable transfer post on return. With regard to continuity in provision of information to the Scottish forces, the Agency has adopted the Police Advisory Board for Scotland (PABS) system of appraisal for all officers seconded to the Agency. However, HMIC is aware that one force has introduced a competency-based appraisal system which requires a different approach in terms of management and supervisory input. Whilst the Agency remains committed to the proposals for a national appraisal system, HMIC would not wish to see officers disengaged from their home force career development process due to differences in information provided. It may be that some negotiation between the Agency and the relevant force is required as an interim measure. Overall HMIC is satisfied that there is evidence of an improved dialogue between forces and the Agency in respect of this recommendation and considers it discharged.

3.5. Recommendation 5

It would be appropriate for the Agency to undertake promotion activity to explain its requirements and outline duties of staff, all towards the goal of a more representative gender balance within the organisation.

The Agency acknowledges the important role that corporate communication must play during the ongoing change programme. Furthermore, it is intended that a wider range of marketing techniques will be considered by the Agency in order to communicate the point that the Agency is an attractive place in which to work.

HMIC commented during the Primary Inspection that the Agency, being unable to recruit directly, is restricted in the extent to which it can influence the ethnicity and gender balance within the organisation. This situation has not changed and uncertainty of future recruitment processes remains with the Agency until the governance issues are addressed. The Human Resource and Development Manager has demonstrated a good awareness of the issues currently being tackled under the Gender Agenda and HMIC sees this aspect as a strand which can be integrated into any future marketing project. Having due consideration to the future governance arrangements and recruitment processes, HMIC will examine this area during the next review inspection.

3.6 Recommendation 6

The Agency, using the opportunity provided by the appointment of a Personnel and Training Adviser, puts in place processes and policies that will support best use of staff and clarify adherence to good practice in terms of equal opportunity.

As a non-statutory agency, the SDEA is not in a position to employ staff, either police officers or support staff. All staff are seconded to the Agency and continue to be employed by the relevant Police Force, Police Board or Council, although all employment and salary costs are met from within the SDEA budget. As a consequence of this arrangement, personnel matters, including misconduct, health and safety, health and welfare, career development, officer safety training and NEOTS National Equal Opportunities/Diversity Training remain the responsibility of the officer's home force. In respect to support staff, the additional issues of pay and conditions are also the subject of regional variation.

The Agency has commenced with a Human Resource Management Project which is intended to facilitate the delivery of an integrated human resource strategy. The Agency recognises that the development and successful integration of the strategy is fundamental to ensuring that the formal change to a statutory body is underpinned by sound policies.

During June 2004, the role of Human Resources and Development Manager was introduced into the Agency by way of internal restructuring. This role is now supported by a Deputy Human Resources and Development Manager and a Support Officer.

The Agency has introduced an Equal Opportunities Monitoring Form which is completed by each candidate interviewed for an Agency position. With regard to police officers, the Agency recruits from a pool of candidates supported by their respective Chief Officers however, the Agency is unable to record any information from the officers applying for an Agency post, but not supported for interview by their Chief Officer. This aspect of recruitment reduces the impact of Agency activity in terms of recruiting from ethnic minority member groups. HMIC noted that there was work being undertaken with SEMPERScotland, an organisation which seeks to promote equality in race with the Scottish police service, to look at ways of reaching into ethnic minority communities.

HMIC acknowledges the activity currently being undertaken by the Agency in terms of equal opportunities and has examined the project brief for the Human Resource Management project. The projected timescale sees the conclusion during the early part of 2006, with a comprehensive review of Oversight and Management, Recruitment and Retention, Training and Development and Organisational Development. This is an ambitious programme of change which, if fully implemented, will provide the Agency with professional support and policies to cover all HR areas and will address all aspects of this recommendation. HMIC acknowledges that the project is in its early stages and will revisit this recommendation during the next review inspection.

3.7 Recommendation 7

A full needs based assessment be conducted by the SCCC to identify the appropriate level of resourcing required by the Agency consistent with the review of its mission statement, aims, objectives and targets.

A full needs based assessment has been completed and submitted to the Programme Board. This has resulted in a gap analysis and prioritised programme of growth, and the Agency will revisit this process during 2005.

HMIC recognises the committed approach by the Agency in undertaking a comprehensive gap analysis, an important element of the needs based assessment, in a fluid operating environment with regard to its wider operational focus and move towards statutory footing. The gap analysis includes benchmarking against relative organisations, anticipating potential corporate challenges in the future.

The needs based assessment is clearly a working document which is the subject of ongoing review at senior management meetings. HMIC acknowledges the identified shortfall in the level of resources required to fulfil the Agency's aspirations and this is a matter which will have to be addressed under the forthcoming governance arrangements. HMIC is content that the Agency has addressed this organisational issue and considers this recommendation to be discharged.

3.8 Recommendation 8

ACPOS and the Agency pursue with vigour the work in agreeing an Operational Protocol to establish clearly the level and nature of support to be provided by the Agency in support of forces in matters of serious crime and, in so doing, identify more clearly the skills base and overall shape of the Agency in the future and ensure that forces have in place suitable standing arrangements to deal with serious crime matters which are not considered appropriate for the involvement of the Agency.

As referred to at 3.1, the Protocol was agreed at ACPOS Crime Standing Committee and referred to the SCCC in April 2003, where, following detailed discussion it was endorsed. Since this time the Protocol has been reviewed and updated to incorporate the facilities offered by the National Hi-tech Crime Unit (Scotland), and the Scottish Witness Liaison Unit. The updated protocol has been endorsed by the SCCC. HMIC considers this recommendation to be discharged.

3.9 Recommendation 9

ACPOS rigorously pursues the issue of firearms support for surveillance activity towards an early conclusion in order that national guidelines are clearly understood and any resulting training requirements addressed.

A business case, detailing the options open to the Agency and the police service in Scotland, has been prepared and was submitted through the Firearms Training and Advisory Group to ACPOS GP Business Area in May 2004. The business case defines a number of options for firearms support to the Agency, with a subsequent number of emerging issues which need to be addressed including legal and accountability aspects for Chief Constables, training and the overall national firearms capability.

HMIC recognises that ACPOS is working closely with the Agency in further developing the business case to put forward to ACPOS Council early in 2005. HMIC will monitor progress in this issue and examine developments during the next Review Inspection.

3.10 Recommendation 10

ACPOS develops a clear strategy for the Scottish police service's response to organised crime, giving full consideration to the role performed by the Home Office and the Scottish Executive and establishing clear linkages with the police response to organised crime in other parts of the United Kingdom.

The Strategic Development Unit is preparing a draft strategy which will be the subject of consultation with ACPOS. The definition of the Serious Organised Crime Agency in England and Wales will impact upon this process and HMIC would urge ACPOS, in consultation with the Scottish Executive, to seek early implementation of an agreed strategy. HMIC will consider progress made at the next review inspection.

3.11 Recommendation 11

ACPOS reviews the remit, membership and linkage of the Scottish Tactical Tasking and Co-ordination Group to the Strategic Group with a view to ensuring clear, concerted and meaningful actions are the products of tactical meetings.

In December 2003, a report from the Scottish Tactical Tasking and Co-ordination Group (STTCG) was presented to the Scottish Strategic Tasking and Co-ordinating Group. The 14 recommendations in this review have since been accepted and are being implemented. Key recommendations include: the STTCG to co-ordinate the Scottish law enforcement response to delivering the Control Strategy set by the Scottish Strategic Tasking and Co-ordinating Group (SSTCG); the STTCG to retain responsibility for delivering the Control Strategy in terms of Intelligence, Prevention and Enforcement and for tackling Scottish priorities, principal threats and the management of these processes; the Crime Co-ordinator, SDEA, to retain the Chair of the STTCG meeting.

The frequency of the SSTCG is now six monthly and the STTCG meets two monthly, with the secretariat function being provided by NCIS at both meetings.

HMIC welcomes the implementation of the review's recommendations, providing Scotland with a cohesive framework in which to conduct business. Clear linkage between the Strategic and Tactical groups was demonstrated during a recent STTCG meeting, with the Chair providing the conduit by way of communicating the issues emanating from the Strategic meeting and identifying key points to be taken back to the Strategic meeting. HMIC acknowledges the role undertaken by NCIS in providing the secretariat function, thus allowing further continuity between Strategic and Tactical groups. Of particular note is the level of support that NCIS currently provides to the Scottish Tasking and Co-ordinating process. HMIC would urge ACPOS to seek a confirmation of this arrangement subsequent to the incorporation of NCIS within SOCA.

Clearly the STTCG is still evolving, however, this group provides a vehicle for the Scottish Police Service, NCIS, UKIS and HMC&E to tackle serious organised crime cohesively and in response to the Control Strategy by way of meaningful actions. HMIC observed a high level of commitment to tackling national crime issues from those attending the STTCG, with a refreshingly open approach in the exchange of information, underpinned by ownership through action points.

Of particular note was the production of a 'Network Analysis Chart' by NCIS, which graphically highlights criminal activity throughout the country and which draws specific linkages between individuals and organisations operating in more than one area. HMIC considers this to be of particular benefit in illustrating how each force can contribute to tackling levels 2 and 3 criminality.

HMIC noted that, through the STTCG, the recently re-formed National NIM Development Team, was allocated an action to examine the current process used by ACPO to measure the outcomes of the control strategy in England and Wales. HMIC will look forward to examining progress on this particular action at the next Review Inspection, however, it considers this recommendation discharged.

3.12 Recommendation 12

ACPOS reviews the flow of intelligence and individual force and Agency procedures for sharing intelligence with a view to improving the quality of the Scottish Strategic Assessment of organised crime activity and the service's success in addressing organised crime.

HMIC acknowledges that the development and subsequent roll-out of the Scottish Intelligence Database (SID) to all Scottish forces, the Agency and NCIS has put intelligence management into a very different environment from the circumstances prevalent when this recommendation was made. SID is operated under nationally agreed Rules and Conventions and procedures for inputting and managing intelligence are universally adhered to. The system allows the Agency to protect intelligence developed during live operations but to release it thereafter into the wider policing and law enforcement community.

HMIC noted that the Agency is pursuing a more streamlined approach to the internal processes involved in the handling and management of intelligence and that a measurement system is in place to monitor intelligence submissions. The number of submissions has increased by 50% over the past six months. HMIC is aware that the Agency favours a move to a Central Intelligence Unit, with all internal units reporting to a single point. This is a favoured model nationally, with the aim of the structure being to facilitate continuous assessment and dissemination of intelligence. HMIC has examined the outline submission by the Intelligence Group for the Corporate Plan 2004-2007 which includes the potential development of the Central Intelligence Unit, and acknowledges this as a positive move towards a more effective intelligence management system

Recent comment from NCIS would indicate that the intelligence flow has improved between NCIS, the Agency and Scottish forces and, with the recent introduction of SID, there has been a significant increase in intelligence, albeit over a short term. With the overall increase in intelligence and, significantly, the joined up approach between relevant partners, the ability to feed into the Scottish Strategic Assessment has been enhanced and, while acknowledging that there is still much work to be done, HMIC considers this recommendation to be discharged.

3.13 Recommendation 13

Improvements to the accounting structure that will enable costs to be recorded against operational units should be completed quickly and, in the interests of improved financial control, the results used to produce budgets and monitoring at the appropriate operational level.

Processes have been introduced to monitor costs at Group/Departmental level. These processes have been running since April 2004, with the intention of providing appropriate management information to inform the budget setting process and to enable finance staff and senior managers to assess the cost of current services.

HMIC noted that there appeared to be difficulty in capturing the appropriate data to provide meaningful and accurate management information and staffing issues had compounded this difficulty. In order to progress this aspect, a Budget Officer will be employed with a remit to ensure that accurate data is recorded at the levels recommended by HMIC and that robust monitoring of departmental costs is sustained. A key element of that role will be to streamline the data capture exercise and to provide Group Heads/Heads of Department with monthly reports. HMIC will examine this area during the next review inspection.

3.14 Recommendation 14

In future, budget monitoring be conducted at a more detailed level.

As outlined in the response to Recommendation 13, the Agency is in the development stages of implementing appropriate monitoring systems. The full range of management information is not currently disseminated whilst the accuracy of the data is being determined by way of internal monitoring within the Finance Department. Overtime hours continue to be monitored and disseminated to Group Heads, however the current systems do not allow for budget monitoring to be conducted at the level of detail recommended in the Primary Inspection. HMIC will revisit this recommendation during the next review inspection.

3.15 Recommendation 15

The Agency makes arrangements with the Scottish Executive Audit and Accountancy Services Division (AASD) to ensure that an appropriate level of audit coverage is provided within a Service Level Agreement.

During December 2004, the Scottish Executive (Finance and Central Services Department) Audit Services carried out an internal audit of the Agency. The audit formed part of the planned cyclical review of the Scottish Executive Justice Department, agreed with the Accountable Officer. The scope of the review was restricted to financial controls as the operational areas of the Agency had been the subject of the HMIC Primary Inspection.

The Agency will be the subject of an audit follow-up report in 12 months time. The Internal Audit Report is in final draft form and is with the Agency for comment on factual accuracy. HMIC noted that there is no service level agreement in place between the Scottish Executive and the Agency, however, having due consideration to future changes in status, the Agency will be the subject of a cyclical auditing process. HMIC is satisfied that the appropriate level of audit is in place and considers this recommendation discharged.

3.16 Recommendation 16

A risk assessment be carried out in respect of all its premises to ensure proper security measures are enshrined in the management of the buildings.

Security assessments have been made of all the premises and these assessments have been used to prioritise any improvements to the security of the sites run by the Agency. Full Health and Safety assessments have been completed at all Agency premises. HMIC noted that representatives from the Scottish Police Federation (SPF) took an active role in these assessments. It was, however, evident that the approach to the audits differed in each location and, for proper management of the assessment process, HMIC would consider it a worthwhile exercise for the Agency and the SPF to examine a different approach to the assessments which would allow for some continuity throughout the process and provide uniformity in documentation, thus assisting in monitoring any action taken. Nonetheless HMIC considers this recommendation to be discharged.

3.17 Recommendation 17

The Agency prepares an IT Strategy in support of its strategic aims.

Within the overall change management programme, an IT strategy will be drafted, having taken into account the outcomes from the recent strategy mapping workshop. HMIC realises that the development of the IT strategy depended upon the identification of the recently emerging key strategic themes, and the future direction of the Agency.

In terms of progress since the Primary Inspection, a number of developments have taken place. The post of Information Security Officer was recognised in October 2002, within the Agency's Corporate Development Plan 2002-2005. Having been advertised on a number of occasions during 2003 and 2004, a candidate successfully completed a selection process during January 2005, and will take on the role in the forthcoming months. This post will include responsibility for Data Protection. Business continuity has been enhanced with the introduction of an additional server and network security has been enhanced by way of biometric authentication for access to systems. HMIC notes the progress made and, in respect of the IT strategy, will look forward to examining it during the next review inspection.

3.18 Recommendation 18

The Agency carries out a full review of its management of overtime and subsistence with a view to managing down its overtime needs in the pursuit of a better work-life balance for its officers.

Management of overtime is an issue that is consistently examined by Group Managers to ensure that working time is not excessive and budgetary expenditure is managed effectively. Changes to rules on subsistence came into being on 1 ^st April 2004, resulting in staff now claiming receipted expenditure for necessary and reasonable costs.

During the Primary Inspection of 2003, HMIC commented upon the unpredictability associated with conducting surveillance operations, and responding to serious crime generally, creating difficulty for the management of the consequent overtime expenditure. In place since the Primary Inspection is the Agency's Working Time Regulations Policy, which takes account of the Working Time Regulations 1998 (as amended). With a 24-week reference period set by the Agency, staff should not work in excess of an average 48 hours per week and full details of the management of working hours are contained in the comprehensive policy document.

HMIC was aware that this area was the subject of discussion during a recent Policy Group meeting where senior management intended to review practice over the previous six months working hours. The monitoring system which is currently in place relies on examination of handwritten sheets, with no IT solution in place to assist management. HMIC would consider that an early introduction of an IT system would greatly assist in the management of working hours and help in the early identification of any trends which could give cause for concern.

During the fieldwork HMIC obtained a favourable response when examining the area of excessive hours worked by staff. Anecdotally there has been a shift towards a more reasonable working ethos which can result in a better work-life balance, with officers remarking on the positive change over the past two years. This is a difficult area to manage, given the responsibilities of the Agency and the enthusiasm of the staff, and there is still some work required to be done in this area. HMIC, however, welcomes this change and encourages senior management within the Agency to continue to set the right example. HMIC will further examine developments in this area during the next review inspection.

3.19 Recommendation 19

The SCCC seeks appropriate empowerment for the Director across the full range of covert intelligence gathering.

Work within the Scottish Executive and the Strategic Development Unit is being pursued to ensure that when legislation is defined to enable the Agency to become a legal entity, then consideration of empowerment of the Director will be followed. It is envisaged that the changes to the legislation will be focused on providing suitable levels of authorisations to the appropriate posts, rather than the rank that the post holder has. HMIC welcomes this activity and will revisit this recommendation during the next review inspection.

3.20 Recommendation 20

The SCCC establish in early course an auditable system of recording and clear method of public performance reporting for joint operations.

A key aspect of the Agency's change programme is the improvement of the management of performance and enhanced performance reporting. It is envisaged that the introduction of the Balanced Scorecard will assist in this improvement process. The Agency's Needs Based Assessment identified the requirement for the post of Performance Manager to address a capability gap in the Agency's performance management regime. The post has been approved for introduction in 2005-2006 and the postholder will be responsible for the development of the work being undertaken by the Corporate Support Unit (Performance Measurement) and the new work being undertaken by the Strategic Development Unit (Performance Management). HMIC would consider that the Performance Manager, in consultation with ACPOS, is best placed to develop a system to clearly define involvement in joint operations for the purposes of public performance reporting. HMIC notes the direction of the Agency's commitment in this area and looks forward to reviewing progress at the next review inspection.

3.21 Recommendation 21

The SCCC carries out a thorough review of the Agency's performance management arrangements to address the issues raised in HMIC's Report.

Between July and September 2004, research was conducted by the Strategic Development Unit on a variety of performance management frameworks, including the Balanced Scorecard, to assess their suitability for the Agency. The Balanced Scorecard is a business tool which allows an organisation to ensure it has a balanced approach to performance across four perspectives e.g. Impact, Processes, Resource Management and Future Development.

Following external communication with consultants, a methodology was outlined to lead to the establishment of a new mission, vision, objectives and targets, and a Balanced Scorecard performance management framework for introduction in April 2005. Five strategic aims have been agreed by senior management, along with a number of high level objectives. A draft Balanced Scorecard has been produced as a result of the strategic aims and, subject to the approval of the Programme Board, will be refined in terms of measures and targets for implementation in April 2005.

HMIC is content that the Agency has taken a structured approach to the introduction of a performance management system. The acceptance of the Balance Scorecard rests with the Programme Board and HMIC will await developments in this area. Of significance is the imminent arrival of the Performance Manager who will take on a key role in this area. HMIC recognises the challenges faced in developing a meaningful performance regime which will accurately measure the impact of an increasingly diverse operational Agency, and to include the qualitative non-enforcement aspects in an equally meaningful format. HMIC will examine this area during the next review inspection.

4. Additional Areas for consideration

4.1 The Agency was asked how it has responded to the Race Relations (Amendment) Act 2000.

The Agency is not listed explicitly among those bodies in Schedule 1 of the Race Relations (Amendment) Act 2000. Notwithstanding this exclusion, the Agency has made a commitment towards complying with the legislation and a Race Equality Scheme (RES) was published in 2002. Clearly much has changed within the Agency and national developments have overtaken the original RES. HMIC notes that the Agency is aware of the shortcomings of the current scheme and is in the process of re-drafting it. The revised version will be taken to the Policy Group in the early part of 2005. HMIC also noted that the Commission for Racial Equality will be consulted in regard to the re-draft.

4.2 The Agency was asked to provide details of its approach to partnership working.

The 'Operational Protocol between the Scottish Police Forces and the Scottish Drug Enforcement Agency', provides the basis for the co-operation and exchange of services between the parties to the protocol. During the fieldwork HMIC was aware of a strong operational relationship with Scottish forces, underpinned by a cohesive Scottish Tactical Tasking and Co-ordinating process. Wider reaching are the linkages with NCIS, Her Majesty's Customs and Excise, the National Crime Squad, the Crown Office and, in terms of the non-enforcement aspect of drug misuse, the Scottish Executive. HMIC is content that the Agency has developed an effective approach to building strong foundations with regard to relationships with its partners.

4.3 The Agency was asked to provide its response to enhance access and facilities as required by the Disability Discrimination Act.

The Agency's Headquarters, Osprey House, Paisley, were completed and occupied during 2001. The facility is a building of two-storey construction with good access to all office space. The doorways, corridors and toilet facilities all meet with the requirements of the Disability Discrimination Act. In addition, disabled parking and ramp access to the building are provided. HMIC is satisfied overall that the buildings contained within the Agency's estate are of modern design and provide suitable access and facilities as required under the Disability Discrimination Act.

4.4 The Agency was asked to provide an update on progress for the implementation of AIRWAVE.

The Agency is currently preparing for the implementation of Airwave which is scheduled for full implementation within the Agency on 1 April 2006. The project is being delivered using Prince methodology. HMIC recognises that the national developments, in terms of covert users' requirements, resulted in delays in arriving at the relevant options. The Agency considered that the final option should have the appropriate level of interoperability with SOCA. This decision has allowed the Agency to sit on the SOCA Airwave Project Board and HMIC recognises the value in securing this appropriate linkage. The Agency also has suitable representation on the Scottish Airwave Covert Users Group. HMIC is satisfied that the Agency has made progress in this area, taking cognisance of the scale of the project and the technical challenges present.

4.5 The Agency was asked to describe its approach to pursuing the principles of Best Value.

The Agency does not currently have a statutory obligation to implement a Best Value regime. However, all processes involved in the acquisition of goods or services are pursued through Government contract, competitive tendering options and through the use of facilities available within forces.

4.6 The Agency was asked to comment on developments which have taken place with Scottish Money Laundering Unit since the Primary Inspection.

Since the introduction of the Proceeds of Crime Act 2002 (POCA), the Agency has looked to identify areas in which to exploit and maximise the impact that the Act can have on the criminal fraternity. In terms of investigative process, the Agency trained an additional 21 financial investigators who are attached to operational syndicates and intelligence units. HMIC considers that this approach to financial investigation may also bring longer term benefits to the Scottish police service when these trained officers return to their home force, assuming that they have been utilising these skills on a regular basis during their secondment.

In the year 2004-05, the performance indicators for the Agency changed significantly to focus attention on POCA with a target established to identify and report for restraint £21 million of realisable criminal assets. Year to date figures, after 8 months, show that more than £9 million pounds worth of assets have been identified and reported by the Agency.

The Agency has recently carried out a review of the functions and structure of the SMLU and a number of proposals have been presented to the Policy Group for consideration. The proposals include the creation of a Financial Intelligence Development Unit, the creation of a Money Laundering Investigation Team which would be dedicated to the investigation of level 3 criminality, and the employment of a Forensic Accountant. HMIC considers that the Agency has taken a progressive approach towards integrating all aspects of POCA within the structure and ethos of the Agency.

4.7 The Agency was asked what management arrangements are in place to ensure the effective provision of service by the Scottish Witness Liaison Unit (SWLU).

The SWLU has provided support and assistance to all Scottish forces with regard to witness protection since October 2001. The SWLU migrated to the Agency during April 2003. HMIC recognises the value of the work carried out by the unit by providing twenty four hour support to Scottish forces, in furtherance of pursuing due process of law.

HMIC has been sighted on a draft paper outlining the future development of the SWLU, including staffing and funding issues, the proposals of which have been made to address potential demand on the Unit in the future. Of interest is the proposal to introduce support staff into the Unit, providing an opportunity to redeploy detective officers to other operational duties. The introduction of support staff also allows for longer term sustainability and continuity, free from associated tenure issues, and HMIC welcomes this approach. This proposal for staffing will need to be assessed, however, against an associated business case, aligned with the needs based assessment for the Agency.

4.8 The Agency was asked what management arrangements are in place to ensure the effective provision of service by the National Hi-Tech Crime Unit (Scotland).

The NHTCU(S) was formally established by ACPOS in August 2001. In July 2001, the SCCC agreed that the Unit should come under the management and control of the Agency. This migration took place in April 2003.

The objectives and operational parameters set for the Unit are contained within the Operational Protocol between Scottish police forces and the Agency. During the fieldwork HMIC noted favourable comments from a number of forces regarding the support provided by the Unit during operations and enquiries. Appropriate national linkage with relevant bodies includes: the National Hi-Tech Crime Unit (England and Wales); ACPO and ACPOS Computer Evidence Working Groups and the Home Office Police Scientific Development Branch.

HMIC has been sighted on the NHTCU(S) Development Plan 2004-2006 which outlines key areas that require examination in order that the Unit can effectively deal with the move towards statutory arrangements for the Agency. Of particular note is the gradual change of emphasis towards level 3 criminality by the Unit, leaving level 1 and 2 issues to the relevant force. HMIC does not see this as a negative factor, as the volume of work to be tackled at a lower level by the Unit would be to the detriment of the investigation of high level serious organised crime. HMIC is aware that forces are in the process of accommodating this change and are providing an in-house response to lower level criminality. A number of issues emerging from the Development Plan will have to be progressed through the Policy Group in due course, however, HMIC is satisfied that the management of the Unit is focused on providing an appropriate national support service.

4.9 The Agency was asked to describe its response to the implementation of the Freedom of Information (Scotland) Act 2002 (FOI).

During the preparation and planning stages, prior to the full implementation of the FOI on 1 January 2005, the Agency was represented on the ACPOS FOI Implementation Group. Linkage was maintained with the national group and, in February 2004, the Agency submitted its scheme to the Scottish Executive with a view to it becoming a part of the overarching scheme. The scheme was approved by the Office of the Information Commissioner and the Agency subsequently developed a website which went live in March 2004. Since June 2004, the Agency has maintained its publication scheme on the SDEA website under an FOI heading.

HMIC notes that funding exists for a Records Manager, however, the post is currently vacant. Although there are procedures in place to deal with FOI requests, the appointment of a Records Manager is important in ensuring policy and procedures are developed accordingly and that continuity of management exists in the effective discharge of any commitments under the Act.

SDEA Review Inspection 2004