Blunkett admits crime cash failure

Mr Blunkett told BBC's Panorama programme that legislation he helped to create had "failed on the ambition" of bankrupting criminals.

He said agencies are recovering at least £350 million a year less than expected under the 2002 Proceeds of Crime Act. In the UK, £137m was recovered last year.

Mr Blunkett said: "We've failed - we've failed on the ambition of bankrupting those who had made enormous amounts of money, out of criminal behaviour."

Asked how much money he would have expected to recover, Mr Blunkett said: "I would've thought somewhere between £500 million and £800 million a year, would have been a reasonable target to have reached at this juncture."

The programme uncovered cases in which convicted criminals were stringing out legal appeals, sometimes using legal aid. It found legal costs and receivers fees sometimes amounted to more than the eventual pot of money recovered.

A 2007 National Audit Office inquiry found more than £16 million had been spent on receivers fees. In 12 cases the fees amounted to more than the assets frozen, leaving the tax paper to pick up the difference.

Under the 2002 act investigators who believe an individual is living off the proceeds of crime, but do not have the evidence to prove it, can take the individual to a civil court where he must prove the legitimacy of his assets. But the programme uncovered cases where civil courts had paid living expenses to individuals whose assets were frozen, eating away at the money they were able to recover.

The organisation tasked with civil recovery, the Asset Recovery Agency (ARA), managed to freeze almost £190 million over the last five years, the programme reported. But it only recovered £30 million.

A Home Office spokeswoman said: "We are determined to stop criminals profiting from crimes which affect the lives of the law abiding majority. The public are quite rightly sick and tired of seeing criminals leading lavish lifestyles."