This is the full text of a letter sent by the then Home Secretary John Reid to Nick Clegg MP, the Liberal Democrat home affairs spokesman, on 11 June. Mr Reid has since been replaced by Jacqui Smith but the policy is unchanged.
Thank you for your letter of 24 May about the use of human intelligence sources and particularly about payments made to such sources.
Although you referred in your letter to the annual number of authorisations of covert human intelligence sources (CHIS) made under the Regulation of Investigatory Powers Act 2000 (almost 5,000 in 2005/6) and to payments to informers it is important to make clear that the provisions of the 2000 Act apply equally whether the source is an undercover official of a public authority or an informant. The total number of authorisations includes both types of source.
The making of payments to sources is not part of the legislation or the statutory code of practice on the authorisation of the use of sources.
However the National Centre for Policing Excellence (now the National Policing Improvement Agency) has produced, on behalf of the Association of Chief Police Officers, HM Revenue and Customs and the Serious Organised Crime Agency, guidance on the management of CHIS, including the payments of rewards and expenses to sources, including non-material rewards.
This guidance is classified and not published because it contains operationally sensitive information about the recruitment, tasking, oversight and handling of sources, about maintaining the security of sources and about the tradecraft and skills required by those working with sources.
The guidance includes a matrix of factors for assessing rewards for sources which helps standardise the payments process; reduces the opportunity for personal bias to influence rewards; subjects all cases to the same fundamental considerations and can minimise the disparities between law enforcement agencies in rewarding sources while enabling each reward system to be tailored to the agency's law enforcement and budgetary needs.
The factors to be taken into account are based on results of arrests, seizures and assets recovered as well as on intelligence-only results, on the type of offence and the amount of effort and risk taken by the source.
All law enforcement agencies and public authorities should strive to maintain a balance between the need for supervision of payments and the need to protect not only the payment process but also the individuals who are involved in it.
Systems for payment must be safeguarded against any unjust or inappropriate allegations while suitable levels for approval of payments and a requirement that all payments must be witnessed and corroborated with incremental levels of seniority depending on the size of the reward.
There is scrutiny of this process. Source management, including payment of rewards and expenses, must be properly managed by each law enforcement agency or authority within the overall budget of the agency or authority.
There will be records within each agency or authority making payments to sources but there is no centrally aggregated figure. Within police services for example, it is open to chief officers to make details of payments made to sources available to the police authority and for the police authority to scrutinise the payments made to sources as part of its audit and assurance responsibilities.
Equally the effectiveness of arrangements for the management of sources is scrutinised by Her Majesty's Inspectorate of Constabulary and can feature in its published baseline assessment reports of forces.
The Inspectorate has also completed a thematic inspection of Her Majesty's Revenue and Customs' handling of Human Intelligence Sources which was published in March.
All those reports are available online.