The Serious Organised Crime Agency (Soca) wants to overhaul the IT underpinning its reporting regime for financial crimes, but the plan could be hampered by lack of funds.

The Suspicious Activity Reports (SARs) transformation project will enable more efficient use of the information contained in Elmer, the database that stores more than a million records of suspected illegal financial activity.

The project is central to the fight against terrorism, but it needs more funding, says Soca chairman Stephen Lander.

“By following the movements of illegal finance, we build our knowledge of criminal organisations and hit them where it hurts,” he said.

“Plans to enhance the technology will cost another £10m per year ­ and we do not yet know whether or not we have the money.

“We don’t know our next annual budget but we are not expecting largesse ­ we have had to shrink to balance our books already and this could continue,” said Lander.

The SARs programme currently costs £7m per year ­ a small slice of Soca’s £450m budget. The transformation scheme is far enough forward to have an outline business case, but it will stall without the additional funding.

The scope for more effective exploitation of SARs is not a recent discovery.

In March last year, the 24-point Lander review ­ set up after the London Underground bombings to look at how terrorists’ financial activity could be more effectively tracked ­ recommended significant further investment in the technology.

But, according to the Agency’s annual report, money cannot be transferred from elsewhere in the organisation.

“Assurance over funding has not yet been secured, and without the required funding the improvements that the Lander Review envisaged will not be delivered,” it says.

The SARs database plays a big part in tracking down financial irregularities. Information in the system can be accessed by 75 different government and private sector organisations including police, banks and government departments.

Soca’s IT department has implemented several low-cost, short-term enhancements, and the system is proving effective.

Organisations filed 1,088 reports of possible terrorist financial activity last year.

One report prevented a €280m (£200m) fraud attempt on the pension fund of an EU state. Others have led to hundreds of thousands of pounds being confiscated from criminals.

But the main transformation project would provide users with better data and improve the feedback to those who report suspicious activity.

And enhanced cross-matching with other systems will add to its efficacy, said Soca director of intervention Paul Evans.

“The database produces the odd golden nugget but it will become more useful over time ­ the more we can do to automate, the easier it becomes,” he said.

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Serious Organised Crime Agency: a history

* Soca was formed by amalgamating the National Crime Squad (NCS), National Criminal Intelligence Service (NCIS), part of the UK Immigration Service (UKIS) and the National High-Tech Crime Unit (NHTCU). It is designed to be the UK equivalent of the FBI.

* “As criminals become more sophisticated, so we must raise our game to fight them ­ we must make better use of technology to stay ahead,” said then home secretary David Blunkett when the plan for Soca was announced in 2005.

* The agency has an annual budget of £450m and works with local police forces, customs and overseas policing agencies to tackle organised crime such as drugs trafficking, fraud and terrorism.

* Soca has been criticised for lack of engagement with the private sector and excessive secrecy. Industry seminars have been arranged as the agency attempts to rectify the problem.