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Mr. Clarke: My hon. Friend is absolutely right. Crime figures are the key test and crime reduction is our key target. As my right hon. Friend the Home Secretary said to the House shortly before Christmas, we are establishing clear targets for vehicle crime, for burglaries, for violent crime and for drugs offences. Targets will be set for each force in the country, and I hope that we shall shortly be able to give further details on precisely how those targets have worked through, following consultation with the police forces.

I wish to make progress on a few of the other points that I want to emphasise. In particular, I wish to deal with the sparsity factor, a matter that was raised by the right

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hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg). It is a serious issue that concerns many Members on both sides of the House.

In addition to the crime fighting fund, we have a crime reduction programme. We are pursuing a range of interrelated initiatives to reduce crime and to reduce the fear of crime. Some £400 million over three years is allocated through the crime reduction programme, including £150 million for closed circuit television schemes and £50 million to protect 2 million homes most at risk from burglary.

I announced last month that more than 180 CCTV schemes are to receive £33 million of Government funding as part of the package, which is the largest single allocation of CCTV money to date. So far, almost 220 CCTV projects nationwide have now been awarded £39 million under this initiative, and I know from comments from Members on both sides of the House how welcome CCTV schemes have been in their constituencies.

CCTV plays a crucial role in helping the police tackle crime and disorder and in reducing the fear of crime. It is extra eyes and ears for the police and it will greatly improve the quality of life for local residents and help to regenerate some of our most vulnerable communities. In the next few weeks, we shall publish the new guidelines to spend the balance of the CCTV money and one aspect of those guidelines will give particular encouragement to CCTV schemes covering rural areas. I have seen several positive schemes where those in a central control room can look at pictures from villages up to 20 or 30 miles away and can immediately communicate with the police. They are positive developments, and we want to encourage them in the guidelines.

On other funding initiatives, we are providing £11 million to fund security measures to help reduce crime and fear of crime among low-income pensioners who are most at risk from burglary. We are providing £30 million for targeted policing, £34 million over two years to expand the national DNA database and £50 million in the new radio communications system for the police. All that is new money. With those initiatives we are demonstrating, over and above our commitment to the police grant, our commitment to extra funding that offers support for the police and local agencies, and our determination to tackle crime and disorder in rural and urban areas.

The settlement for 2000-01 also takes into account the Home Secretary's commitment to improve efficiency in the police service during this Parliament. Last year, we set a year-on-year target of 2 per cent. for efficiency improvements in the police service.

Mr. Graham Brady (Altrincham and Sale, West): The Minister mentioned additional funds that are available. I hope that he will also consider the additional costs that need to be taken into account. Greater Manchester police have received a real-terms increase of 0.26 per cent. this year, but that is set against a police pay settlement--which is welcome--of 3.6 per cent.; additional costs for the police national computer of nearly £1 million; and an increase in the national crime squad and National Criminal Intelligence Service levies of 7 per cent. and 26 per cent. respectively. There are massive cost

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increases that far outstrip the additional money available. Does that not make it inevitable that the number of police officers will fall even further?

Mr. Clarke: That is certainly not inevitable. Of course costs rise; that is the nature of life, as most hon. Members will know. I need to place on record that the figures that the hon. Gentleman quoted for the NCS and the NCIS are not correct. They are from an earlier bid, and the final precept will be lower. I simply put that on record so that the hon. Gentleman does not inadvertently mislead the House.

Many police forces have written to me to say that they do not support the amount of money going to the NCS and the NCIS, and are worried about the public safety radio communications project, to which I shall turn in a moment. Those are all competing issues, but my view is that investing in the National Criminal Intelligence Service and the national crime squad is an important means of tackling major international organised crime. That includes drugs crime, which the right hon. Member for Haltemprice and Howden (Mr. Davis) mentioned, which needs to be tackled by better intelligence and co-ordination between forces. That merits those increases in investment.

The inspectorate's assessment of the efficiency plans submitted by police forces for 1999-2000 is that the police service is on line to deliver the 2 per cent. efficiency gains required by the comprehensive spending review. Gains will be reinvested in front-line policing, and go some way to answering the point about costs made by the hon. Member for Altrincham and Sale, West (Mr. Brady). Plans are being developed by police forces and authorities to deliver a further 2 per cent. efficiency gain in 2000-01. We estimate that efficiency gains could total around £440 million over three years.

I turn now to the details of next year's funding settlement. For 2000-01, we propose to set considerable store by stability in the grant system to help police authorities to plan ahead. We shall not therefore make any changes to the method of police grant distribution for 2000-01, so there will be no substantive changes to the operation of the police funding formula for next year. There will limited changes; for example, to accommodate force boundary changes.

The issues that I shall address in explaining that position are as follows: sparsity; the continuation of the old force establishment component in the formula; the cost of the new national radio communications service, a subject that was raised by the hon. Member for Altrincham and Sale, West; the cost of police pensions and the cost of security, matters that have been raised with me by several forces. I do not want anyone to think that I am not addressing the issues that hon. Members have raised.

I need first to report on force boundary changes; 1 April will mark a major step in our programme of aligning criminal justice boundaries when we bring the boundaries of the Metropolitan police district into line with those of the 32 London boroughs. That will make co-operation between the criminal justice agencies in Essex, Hertfordshire and Surrey much more straightforward and will help our crime reduction partnership approach to be much more effective.

The four forces involved have worked closely with each other and the Home Office to ensure that a smooth transfer of responsibilities can take place in April.

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The allocation of money under the funding formula reflects the increased size, and hence policing need, of the three county forces. In the settlement, the Government have also recognised that, in preparing for the change, the three authorities will continue to incur additional costs next year.

The Government will therefore make special payments of grant in 2000-01 totalling £10 million, in recognition of the additional costs resulting from the changes to the Metropolitan police district boundaries. Essex will receive £1.25 million; Hertfordshire will receive £2.75 million; the Metropolitan police will receive £500,000; and Surrey will receive £5.5 million. Those payments are reflected in the grant report.

Sir Sydney Chapman (Chipping Barnet): The Minister has mentioned the variation in allowances because of the changes in the Metropolitan police boundary. He will understand that the Metropolitan police have lost areas in Essex, Hertfordshire and Surrey. I understand that he is allowing an additional £500,000 to the Metropolitan police because of the adjustments that have to be made. Does not that figure depend on the numbers of people and the numbers of assets that have been transferred out of London? Will the hon. Gentleman think again about £500,000, which has left many parts of London that remain within the Metropolitan area, especially those nearest the areas affected, with some very difficult problems?

Mr. Clarke: I understand the concerns raised by the hon. Gentleman, especially in respect of his constituency. It is in the position that he describes, being near the border. I shall talk about police funding and I shall consider the issue that he has raised, but it is important to pay genuine tribute to the co-operative way in which the Essex, Hertfordshire and Surrey forces and the Metropolitan force have worked together in dealing with the difficult managerial issues that have been involved in the transition. It is not only kit that is involved, but people. Difficult issues have arisen and the individuals involved, from chief constables downwards, have used a great deal of creativity to try to minimise the problems that any change will bring so that policing in areas such as that represented by the hon. Gentleman will not be adversely affected.

I fully accept the point that has been made by many that the police funding formula is not sufficiently sophisticated or flexible to respond to the distinct characteristics and responsibilities of the Metropolitan police. It is for that reason that the Met receives a special payment of grant outside the funding formula. In recognition of the Met's specific needs, we have increased the level of the special payment from £151 million in 1998-99 to £176 million in 1999-2000, and to £182 in 2000-01. This is paid as a 100 per cent. Home Office grant and is not charged to London council tax payers. It is an acknowledgement of some of the problems referred to in the hon. Gentleman's intervention.

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