Two senior leaders of the Police Digital Service (PDS) have been arrested on suspicion of fraud and bribery and suspended from their posts.
The company provides digital services for all of British law enforcement and has an annual turnover of more than £70m. It is owned by police and crime commissioners and funded by the Home Office and police forces.
The arrests were made by detectives from the City of London police.
Senior officials are scrambling to put in place temporary replacements amid uncertainty about whether and when the two senior leaders are expected to be able to return.
In a statement, temporary Det Supt James Halkett, of the City of London police, said: “The City of London police are leading a criminal investigation into allegations made against two individuals employed by the company Police Digital Service. The suspects have been arrested for fraud, bribery and misconduct in a public office.
“The suspects have been interviewed and bailed pending the ongoing police investigation.”
The criminal investigation follows allegations made to the body representing police and crime commissioners and the National Police Chiefs’ Council (NPCC) earlier this year. Detectives had been studying the claims for several months before deciding to make arrests.
In its statement, PDS made no mention of the seniority of the people arrested, which has been confirmed to the Guardian by multiple sources. It read: “PDS can confirm that two employees have been arrested on suspicion of fraud, bribery and misconduct in public office. They have been suspended from work pending the outcome of the police investigation, and an employee misconduct review is being conducted by an independent HR [human resources] consultancy.
“Given the seriousness of the issues raised, a thorough review of PDS will be undertaken. The company’s work continues unaffected. We are unable to comment further at this stage.”
The Association of Police and Crime Commissioners said: “The APCC and NPCC received information earlier this year regarding allegations of malpractice concerning individuals at the Police Digital Service. The information was passed to City of London police for review which subsequently led to a criminal investigation.
“The APCC, NPCC and Home Office are supporting the PDS board to ensure the company’s work continues unaffected.”
In 2022-23, PDS’s turnover was £74m and it made a profit of £2.4m. It runs cloud services for law enforcement as well as cybersecurity and IT support.
In its last annual report, the then policing minister, Chris Philp, gave it a vote of confidence and said: “We are huge supporters of PDS at the Home Office. They are doing critical work on behalf of the policing community.”
According to its website the PDS “is the UK organisation responsible for coordinating, developing, delivering, and managing digital services and solutions that enable UK policing to safely harness technology to improve public safety. Funded by policing and the Home Office, PDS works with law enforcement organisations, private industry, charities, public bodies and government to deliver digital services and solutions with policing, for policing.”
A Home Office spokesperson said: “The Home Office is aware of serious allegations relating to the conduct of two individuals within the Police Digital Service. Given the gravity of these allegations, we are supportive of the steps being taken by the PDS and expect a thorough review will be undertaken.
“Work is under way to ensure frontline services are not negatively impacted and that public funds are protected.”
