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Mr. Stephen: Surely the hon. Gentleman accepts that the distinction he is attempting to draw between council tax payers and income tax payers is artificial. Council tax payers and income tax payers are substantially the very same people.
Mr. Michael: The hon. Gentleman should know full well--although I appreciate that he, like the Home Secretary, avoided accountancy and went into law, which is probably just as well--that the Government are saying that they are giving extra money to the police, but that they are not giving Government money to the police. They are not providing the money they take from taxpayers to provide the rises. They are saying, "It's not coming out of our sums. We'll take it out of council money instead, and let council tax payers pay for it." They hope that local authorities will be blamed, although the burden will have been placed on local taxpayers because of the Government's decisions.
The hon. Member for Shoreham really must appreciate Ministers' sleight of hand, because there is no doubt that they think the public will believe that local councils are taking the money or that they hope councils will get the blame. The increased financial burden on local authorities, however, has an impact on crime and on the work of the police.
Labour-controlled local authorities want to do more, not less, on crime prevention and public protection. They want to do more, not less, on work with young people to cut youth crime. They want to do more, not less, in working with the police and the local community to cut local crime. However, those authorities are being provided
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Mr. A. J. Beith (Berwick-upon-Tweed):
I hope that the hon. Gentleman will remind those Labour-controlled local authorities that the right hon. Member for Dunfermline, East (Mr. Brown) has made it clear that those spending plans cannot be changed.
Mr. Michael:
Yes, indeed. The problems that the Government have given to local authorities are very considerable and clear. As we all realise, an incoming Government will inherit the problems created by the current Government.
Next week, we will hear more about the problems that the Government are offloading on to local government. As I said, the way in which the Government have dealt with police finances will make the situation worse, and they have still not managed to meet the challenge of creating a fair and transparent police funding formula that is dependable over the long term. Ministers recognise the problems posed by increasing pension burdens, but they have not solved them.
This year, the police will not experience a real, bottom-line increase in resources, and far less will they be able to provide for additional police officers. Even without that swingeing 14 per cent. increase in council tax precepts--which is an average, as I have made clear; the burden will be even higher in some places--the total increase is only £247 million, compared with local authorities' estimated cost of £371 million for pay increments, rising pension costs, pay and price increases and allowing for efficiency savings to fulfil the Prime Minister's promise.
Mr. Elfyn Llwyd (Meirionnydd Nant Conwy):
I shall keep my speech brief, and plead the case of North Wales police. I should say that, against the background of a tight public spending round, the police settlement has been marginally higher than the settlements for some other services. There are problems, however, particularly in north Wales. Some of the points that I shall make are specific to that area, although some apply to all police forces.
The 3.2 per cent. overall budget increase--before funding for additional officers is provided--is sufficient to fund only the full-year effects of 1996-97 pay rises, in 1997-98, and forecast and pension rises, in 1997-98. That assumes that the police authority will agree to set the maximum precept.
There is insufficient to meet likely price increases in services, energy, fuel and consumables. To maintain current levels of operation, the North Wales police will be forced to fund significant savings from maintenance and support areas. Operational support demands are increasingly sophisticated and expensive. Several
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The reduction in the capital allocation for minor works, vehicles and equipment from £1.33 million to £1.076 million is placing an additional strain on the revenue budget and delaying important developments. Private finance initiative projects are being investigated, although, even if they are successful, they are unlikely to relieve pressure on the capital programme for the next financial year or two.
The damping procedure introduced as additional rule 1 is welcome, as otherwise the funding formula changes would have produced a further reduction in spending power in the North Wales police of about £1.5 million. There is real concern that the protection of additional rule 1 will be removed in the short to medium term. That would require a major reduction in the size of the police force and in its ability to provide the community with the level of policing they expect from provisions announced in the proposal and additional rule 2.
There is no doubt that there will be a reversal in the recent trend of recruiting some additional officers. Despite having recently achieved significant efficiency savings, including a major reduction in supervisory ranks, the force will be forced to consider further staff cuts as a result of the proposed settlement. There appears to be an assumption that a flatter management structure is required, although commanders and managers in the North Wales police are already spread too thinly.
An additional burden is the need to provide legal representation--this burden is unique to the North Wales police area--at the north Wales child abuse inquiry. There will be a cost of £1.6 million over two financial years. That is proving to be a major drain on resources, and in a year of negligible growth there is no option other than to reduce the capacity of services and to delay further some essential developments. The force's reserves of £1 million are, of course, insufficient to absorb anything other than a minor contribution.
The settlement allows for little real growth. The demand for police services and the expectations of the north Wales community are growing at a greater rate than resources are being applied. The announcement that the 1997-98 settlement includes funding for additional police officers has further heightened public expectations.
The reality is that the settlement barely provides for pay and price increases. In addition, the environment in which police officers work has a greater prospect for hostility and violence. Police officers must be given adequate protection. The additional cost of providing body armour, CS spray, the new batons and so on must be provided from the current, rather static budget. That will inevitably mean reduced services.
The growth in pensions, already referred to by the hon. Member for Wallasey (Ms Eagle), is being provided at the expense of the operational budget; pensions are being
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The use of a formula as a means of allocation to police forces within the overall police settlement is clearly not working adequately. The majority of forces are now given protection from reduced allocations because of the formula under rule 1. The amount of protection for the North Wales police under this rule for 1997-98 is £733,000. There can be no guarantee that that protection will continue in subsequent years. The formula needs a thorough review as a matter of great urgency. It impacts badly on the North Wales police, but I have no doubt that it impacts on every other police force as well.
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