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Mr. Clarke: The hon. Gentleman and I have had previous exchanges about the extreme poverty of the residents of Christchurch and Dorset compared with those in other parts of the country. I shall not repeat those arguments in the context of policing rather than education. This year, Dorset received an increase of 3.2 per cent., which was more than the average for England. I shall not accept his invitation to recommend what precept police authorities should set; that is a matter for them. However, I shall answer his second question: police authorities should try to make efficiency savings of 2 per cent. a year in the way in which we suggest. I have no reason to believe that Dorset does not reduce costs through greater efficiency.

Mr. Llwyd: The Minister has been refreshingly candid. I urge him to implement the sparsity policy next time round. In north Wales, we have lost all outlying small police stations and policing is done from afar. In some months, police do not have petrol for the cars. That is not due to incompetence; the money is simply not there.

Mr. Clarke: As I said earlier, I understand and sympathise with the argument. I make an appeal to hon. Members: sparsity is an important element in the rural crime and policing debate, but it is only an element of it. The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) talked about higher police presence in a whole area. Developing better crime reduction partnerships between rural district councils and the police, and giving policing a higher profile, are only partly related to resources. Other issues must be considered. The Government will address them fully as part of our overall strategy on rural matters. I hope that, like the hon. Member for Meirionnydd Nant Conwy, other hon. Members will consider rural crime in the round, not only in the context of sparsity and funding.

I want to move on to the second point on which I received representations: the continuation of the old force establishment component in the formula, sometimes called "damping". Police establishment levels were originally included in the formula to provide stability and some continuity with the previous funding system. The Government always intended that those historic manpower levels should be part of the formula only on a temporary, transitional basis, and that they should be removed at whatever rate was compatible with the need for stability in funding.

It remains our intention in due course to get rid of that part of the formula, which accounts for only 10 per cent. of overall funding. However, for reasons that I explained earlier, we are making no formula changes for next year.

Mr. Mark Todd (South Derbyshire): Does my hon. Friend recognise that the retention of the establishment element in the formula works strongly against a county such as Derbyshire, which has had a low establishment for historical reasons, and that an early change to that formula would be welcomed there?

Mr. Clarke: I entirely recognise my hon. Friend's point, with which I am familiar in respect of not only

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Derbyshire, but a number of other forces. He makes his argument forcefully and, as I have suggested, it remains our intention to get rid of that part of the formula in due course. Although it represents only 10 per cent. of overall funding, it operates unjustly, as he described.

Most of the costs of implementing the public safety radio communications service are contained in annual charges for the core service. These will be met by central funding by means of a deduction from total police grant provision. As part of next year's funding settlement, £5 million has been provided from police grant and standard spending assessment provision towards core service costs. It is estimated that the cost will be about £150 million a year at today's prices when the service is fully operational, which will be equivalent to 2 per cent. of police authority budgets. That needs to be set against the expenditure that forces already incur in maintaining their existing radio communications systems. The cost will be reduced by the £50 million subsidy announced by my right hon. Friend the Home Secretary last September.

The costs of the public safety radio communications project will also be taken into account in the overall resources provided for the police service in future years. That new digital radio and data service is tremendously important to improving the efficiency and effectiveness of the police service. It will provide state-of-the-art, fully digital secure mobile radio communications services and offer users ready access to the police national computer and other computerised databases. The new PSRCP system will ensure that the police have a crime-fighting tool that is at the cutting edge of new technology. That development is difficult but important, and I believe that it will be widely welcomed.

Mr. Heald: For absolute clarity, is the Minister announcing genuinely new money in the third year, over and above the comprehensive spending review, or is the money part of the comprehensive spending review that we already know about?

Mr. Clarke: As the whole House knows, we are undergoing the next comprehensive review and the process will be concluded next June for the next three years.

Mr. John Greenway (Ryedale): Is that June 2000 or June 2001?

Mr. Clarke: With effect from June 2001. I am sorry, Mr. Deputy Speaker. I am at risk of misleading the House. I responded to the hon. Gentleman's comment, which was made from a sedentary position. I cannot remember the legal term, but he is briefing his colleague, the hon. Member for North-East Hertfordshire, on exactly how to operate. In June 2000, the outcome of the comprehensive spending review will be clear, so we shall know what the position is. It covers the three coming years. In the context of that review, which is taking place, the additional costs arising from the PSRCP will be taken into full consideration as we see where we can make progress. The force as a whole welcomes the service, although aspects of it have been controversial. Generally, it will affect the nature of policing and increase its quality substantially.

Mr. Todd: I thank my hon. Friend for giving way again. Does he recognise that, with no change in the support given to implement the new service, which he

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rightly says is welcome, it has been calculated that a force such as Derbyshire would have to cut the equivalent of about 173 officers to meet the cost, either through the additional revenue cost of the system or through additional contributions to the capital cost from revenue?

Mr. Clarke: I acknowledge that that representation has been made by Derbyshire and appreciate the way in which my hon. Friend makes his point, as he said that those could be the implications "with no change" being made. My right hon. Friend the Home Secretary has already announced changes, such as the extra £50 million to which I referred a moment ago, and there may be other changes further down the line. I am experiencing slight wry amusement as I am new to this game. Whatever forces attacked--the cost of the PSRCP, the sparsity factor or the National Criminal Intelligence Service--they had drawn up a little equation about the cost of one measure versus more bobbies on the beat in each particular locality and ran that argument every time. I appeal to hon. Members to listen to the advice of my hon. Friend the Member for Northampton, North (Ms Keeble), who said that, although we should consider police numbers, we should also look at what we are doing to reduce crime. That issue has to run through the whole debate.

The fourth issue on which I received representations was that of police pensions, a difficult and problematic subject. The Government have recognised the increasing costs of police pensions: we increased the proportion of funds to be distributed for pensions from 13.2 per cent. in 1998-99 to 14.5 per cent. in 1999-2000.

The arrangements whereby police pensions costs form part of each police authority's budget are long-standing. They have some merits in ensuring that police forces concern themselves with, for example, the number of unnecessary medical retirements that they permit; but we accept that rising costs are a matter of concern to the police service.

The absence of a funded scheme is not the only or, indeed, the main reason for the increasing costs. That is why we did not advocate a move to a funded scheme in the March 1998 consultation exercise. In the light of the consultation, we have been giving further consideration to the case for a funded scheme. No decision has been made, but a funded scheme is not an easy option, given the extra start-up costs. Those are substantial--around £25 billion--and the money would have to come from somewhere. That is why the focus of the review has been on a more affordable scheme for new entrants, and the improved management of ill-health retirements for current as well as new officers.

Mr. Chope: How many of the 1,642 medical retirements of police officers and the 839 medical retirements of civilians that took place in the last year for which figures are available does the Minister think were unnecessary?

Mr. Clarke: I cannot answer that at the Dispatch Box, but I do not wish to demean the hon. Gentleman's point. There are serious issues relating to the operation of the system and the way in which it has moved forward. I have had a number of discussions with chief constables about the possibility of establishing more effective systems to control such important personnel decisions. I am not

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prepared, and would not be prepared in any circumstances, to speculate about how many retirements are reasonable; I do not think that that is the right way in which to proceed. The right way in which to proceed is to introduce a more rigorous method of examining the issues to which the hon. Gentleman refers.

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