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Police Funding (London)

4.21 pm

Dr. Vincent Cable (Twickenham) (LD): I am delighted to have the opportunity to introduce a debate on this subject and, because of the staggering of the debates, to have broadened my education on British motorways. I have introduced this debate for two reasons. First, I have a long-standing interest in police matters. I chair the all-party group on police, and I hosted the meeting on 15 October at which the Association of Chief Police Officers and the Association of Police Authorities gave a preliminary airing to some of their concerns over the looming financial difficulties of some authorities, especially the Metropolitan Police Authority.

Secondly, I am raising the subject as a London Member of Parliament. My particular part of London, the borough of Richmond, is by most indicators the most law-abiding in London. Although it is not law-abiding by the standards of many other parts of the country, by London standards it is considered to be a relatively low-crime area, and I accept the relative indicators on that. None the less, there is a major fear of crime, and much of that has burst to the surface during the past year.

I hosted a public meeting about a year ago in Hampton in my constituency, where the attendance was in thousands rather than hundreds—we had to turn people away and have the meeting in shifts. Part of that public anxiety was triggered by a particularly alarming murder, that of Marsha MacDonnell, but even before that a growing worry about crime was building up. That was underlined by the fact that most people in most parts of my constituency had not seen a police officer on the streets for many years. In that sense, my area was typical of many parts of London. Particularly in the early and mid-1990s we saw a quite catastrophic decline in police numbers; in aggregate London terms they fell from 29,000 to just over 25,000 in 1997–98. In my borough, the decline was from 336 in 1990 to 267 in 1998, a loss of more than 20 per cent. of the force. Street policing simply disappeared.

The situation has stabilised since then, and in the last year we have seen an increase to about 280, a slight improvement. For the first time, people are beginning to note a visible police presence, helped by the police community support officers, a welcome development. My borough commander has recently introduced a system of allocating a beat officer to every ward. That is a big change and a welcome improvement.

I have introduced the debate because I worry that that turnaround, which, if not dramatic, improves the visibility and numbers of police, may be undermined by the overall position of the Metropolitan police and the consequences of the local government finance settlement. The calculations that the Metropolitan Police Authority has made are provisional, so the Minister may want to correct or explain them, but its assessment is that London will lose in the order of £56 million in the next financial year, compared with what it would have received had the formula applied as before.

The reasoning behind that number has several elements. First, the growth for funding for London is apparently 3.3 per cent., as opposed to an average of 4.2

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per cent. None of us can understand why London's growth is less than the average. Any needs-based system would presumably reflect the fact that London has an intensification of many law and order problems such as gun crime. Any system based on costs would take into account the fact that labour and property costs in London are rising relatively rapidly. Yet for reasons that are unclear, London seems to have done less well than it would have done under the earlier needs-based formula.

The second reason for concern relates to the funding of those elements of the police budget that are described as national and capital city functions. There are a large number of tourists in the city, as well as the monarchy and the diplomatic service. A whole set of functions accrue to the Metropolitan police on account of our being the capital city. Quite properly the Government funds them separately. The growth rate here is about 2.5 per cent., which is even lower than the overall funding allocated to the Metropolitan police.

Again, the figures are difficult to explain. The rough notional sense that many borough commanders are getting is that abstractions, particularly from suburban areas into the centre, are growing rapidly. I was informally given an estimate of a 9 per cent. annual growth last year. These are police officers who, to maintain public confidence, are being removed from routine duties and transferred to the centre of London for those national capital city functions. Yet that has not been allowed for in the funding formula.

Mr. Mark Field (Cities of London and Westminster) (Con): In view of the constituency that I represent, I am well aware of the problem relating to capital city funding element within the Metropolitan police area. The hon. Gentleman will appreciate that, for historical reasons, the City of London police have a level of independence. I pay credit to the Government: the City of London police have received a good settlement this year to take account of terrorism and fraud. However, terrorism, and the fear of terrorism, are quite large factors. Does the hon. Gentleman have any thoughts not just about police numbers, which have been used as the big idea by both the Mayor of London and the Government, but about the management of the police in the Metropolitan police area? That is of grave concern to my constituents, and to his in a more suburban area.

Dr. Cable : There has been an enormous improvement in the management of the Metropolitan police in the last few years. I will shortly give a few indicators that show that. I certainly accept that the Metropolitan police were notorious for the inefficiency of some of their operations a few years ago. That has greatly changed. The hon. Gentleman referred specifically to terrorism. There is a query about how the Government will approach that. That is not a criticism. As I understand it, some 257 new security posts were to be created in London specifically to deal with the problem. The Metropolitan Police Authority and the police have no indication of how they are to be funded. The impression they have gained is that there is to be no additional funding for that purpose.

In addition to the difficulties of the basic national formula and the national duties allocation, there is a set of queries relating to the special grants. It would be

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better—I know that the Government are moving in this direction—if some of those special grants were simplified and consolidated. What seems to be happening is that existing special grants are being increased far less substantially than the London police have been led to expect. This is a further source of concern.

The community support officers are a welcome addition and have made a major difference to policing in the capital. Some 40 per cent. of them are women or from the ethnic minorities. They are making a big change to the face of London police. However, the funding that has been made available for them for next year is substantially less than London was led to expect. The Airwave project is key to efficiency and better communication. Again, there is a big drop in funding that will be made available for it. The crime-fighting fund, which is key to recruitment, is not being extended next year. The funding of existing officers is being reduced. The funding being made available for a whole set of specific grants is less then London was led to expect. That is on top of the losses from the overall funding allocation.

What are the potential consequences? As I understand it, there is a consultation process in which the Minister will be involved. It may produce a different outcome from the one that I am trailing here. There is a set of decisions to be made by London's elected members. It is not for the Government or me. That is right. They have to decide their own priorities. But it is clear on the basis of the provisional numbers that some painful decisions will have to be made. It is quite possible that the London authorities will steam ahead with their plans for expanding the number of police officers on the ground. If they do that they will have to increase substantially the council tax precept. A figure of 20 per cent. growth has been quoted but given the overall inequity and unpopularity of the council tax system, I suspect that that would not be acceptable to many boroughs.

The alternative is for the police in London to trim back some of their plans. In particular, I am worried that the Metropolitan police may be forced to abandon or seriously postpone their step change initiative, which was to give a new dimension to policing in London by introducing ward-based beat policing across the capital. The first stage was to involve three wards per borough, including mine. My understanding is that the funding is precarious and depends on an optimistic outcome to the negotiations with the Government.

Of course, the Government could say that the Metropolitan police could become more efficient. That point was made in an intervention. They could ask why the Metropolitan police do not save money. I remember being part of a delegation that went to see the Home Secretary—now the Foreign Secretary—about four or five years ago. He produced all kind of indicators of inefficiency in the Metropolitan police to explain why he was not being more generous to them, but since then there has been a big change. The Metropolitan Police Authority has been able to demonstrate that, over the past three years, it has made, I think, effective cuts of £100 million in expenditure, through improved productivity. According to most indicators of performance, when the Metropolitan police are compared with West Midlands or Greater Manchester

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police, which are comparable forces, they come out relatively well on things such as days lost and crime reduction. I am talking about burglary, car theft and many other key crimes. Public perception of and trust in the Metropolitan police ranks higher than for comparable metropolitan forces. There has been a big turnaround in the Metropolitan police, and the old argument about not trusting them with more money because they will not use it properly is becoming rather invalid.

To draw my thoughts to a close, I have two specific points. First, how it is possible to get a simple and more transparent system of Government funding for the Metropolitan and other police services? One of the points that people in the police service make is that they currently negotiate with six or seven Departments, and the European Commission. They deal with the Treasury, the Home Office, the Office of the Deputy Prime Minister, the Department for Transport—for the British Transport police—the Department of Trade and Industry and others. Can those different negotiations and streams of funding not be consolidated in a much simpler way? That ties in with the broader argument about the need for targeting to be reduced because it merely adds to the complexity and rigidity of funding. I know that the Government are moving in that direction this year, but targeting remains a major problem.

My other point is about the funding of major events. It is estimated that the Metropolitan police spent £4.2 million on the Bush state visit. Much of that was opportunity costs—police who could have been employed doing other things—but the sum is substantial. It is assumed that that will all be covered with the national and capital city funding formula, but there is an argument for treating big events separately. I suggest that that particular event could, and perhaps sensibly should, be covered separately by the Government. It was an entirely national activity and a one-off event, and should be separately funded rather than assimilated into the costs of the Metropolitan police. London has already paid for the visit in other ways because robbery rose 20 per cent. on the day in question. Many areas, such as mine, were denuded of their police officers. Londoners have already been asked to pay once, and they are being asked to pay twice.

On major events, I have another suggestion. I understand that the argument is not simply about asking taxpayers to pay more for policing. There is an argument, in some cases, for getting commercial operators to pay more. My constituency is host to the Rugby Football Union, as we are all aware, and I am proud of that, but I often question why the Metropolitan police should be expected to provide police officers outside the ground, at overtime rates, when there are major events. I did some costings about a year or so ago, and the cost is about £35,000 or £40,000 a time. Taking into account the major events over a year, the cost is probably £500,000. If the cost of events at Stamford Bridge and Highbury is added to that, we are talking about quite a large sum of money, and that is just for sporting events, not other events. There is an argument for asking the organisers, most of whom are now highly profitable owing to television revenues, to make a contribution to that. It should not just be down to the taxpayer.

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The major question is why London, despite its exceptional needs and costs relative to other parts of the UK, appears to have suffered disproportionately in the allocations for the coming financial year and seems to have lost a lot of money for reasons that are not clear.

4.35 pm

The Parliamentary Under-Secretary of State for the Home Department (Caroline Flint) : As a former Twickenham girl, I am pleased to respond to this debate, and I congratulate the hon. Member for Twickenham (Dr. Cable) on securing it. I also welcome the hon. Member for Cities of London and Westminster (Mr. Field) to the debate.

Such debates are always opportunities to air local concerns about issues around crime. The hon. Member for Twickenham raised the important matter of people's concerns about crime throughout the UK—in Richmond, Twickenham, London and the rest of the country. A major incident, such as a murder, is bound to induce people's concerns and fears about its handling in their local community and about how safe they feel. Much has been done on a number of fronts to tackle crime. In more recent times, the general public have welcomed the reality of our need for police officers. However, we need other people to be engaged in fighting crime, whether they be community support officers or neighbourhood wardens. Tackling antisocial behaviour comes top in my postbag and in my surgeries—it is the issue that people raise daily. People realise that unless we tackle that problem, it can develop into far more serious crimes committed by people who are engaged in such activity. Such matters are important, and I take them seriously as an MP, a Minister and a member of the Government.

As the hon. Gentleman will be aware, the 2004–05 provisional police funding settlement was announced on 19 November. Details were circulated to all police authorities and forces and have been communicated to hon. Members. The closing date for representations on that settlement is 9 January. Expenditure on policing supported by Government has increased by 30 per cent. since 1999–2000. That was indicated in the hon. Gentleman's comments on how police numbers had plummeted for a time, but were now stabilising, with the trend moving upwards. That is welcome. Next year that expenditure will be increased by a further 4 per cent., which covers police formula spending, specific grants and Home Office direct expenditure. Under the provisional settlement all police authorities will receive, within that total, an increase of police authority general grant of 3.25 per cent above inflation. To set a single rate increase is an exceptional step. I shall elaborate further on that, because it is at the heart of the hon. Gentleman's questions this afternoon.

The Metropolitan Police Authority was allocated a general policing grant of £1,764 million for the current year as part of the overall grant to the Greater London authority. That is an increase of 5.2 per cent., or £87.73 million, which places it at the grant ceiling level. It remains a ceiling authority for the next year, when its grant increases to £1,822 million—an extra £58 million. The GLA also received up to £140 million in grant for specific initiatives in 2003–04. The main items included

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£70 million for the crime-fighting fund to support more than 2,000 officers and £62 million for counter-terrorism. That is substantially more than the sum received by any other force. Specific grant allocations for 2004–05 are still being calculated, but we have already announced that the force will receive £73 million for the crime-fighting fund. It will also receive a range of other grants.

Specific and targeted grants were introduced as a direct response to what the police service and the public told us they wanted. The general police funding formula is not sufficiently flexible to allocate some funding streams or funds that may not be relevant to all police authorities. Specific grants enable us to target funds in the areas where they are needed. London is a beneficiary in that arrangement.

The hon. Gentleman and other hon. Members spoke about the impact of transferring the specific grant, which was previously earmarked for Airwave menu services funding, to the general grant. That does not increase the total grant, but was done to offer police authorities increased flexibility and scope to use their grants. However, it has become clear to us that a large proportion of the Airwave menu grant was already committed for long-term services. In the circumstances, we have agreed with the Association of Chief Police Officers and the Association of Police Authorities to consider again how to reduce any relative disadvantage to forces. We have written to both bodies suggesting a way forward that includes £30 million of additional funding. Those discussions are under way.

The hon. Gentleman talked about the mechanics of the formula and about providing for grant floors and ceilings and how it disadvantages the Metropolitan Police Authority. In the provisional funding settlement, we provide for a standard level grant increase for all authorities of 3.25 per cent. That requires authorities that would otherwise have received more to contribute towards bringing others up to the average increase.

The MPA would have received considerably more grant—about £56 million more for 2004–05—in the absence of floors and ceilings or standard increases. The GLA contributed about £10 million in 2003–04. The main cause of the difference is the grant formula review in 2002, which moved spending need assessments towards urban and metropolitan authorities, but the shift would have destabilised the finances of losing authorities. Several metropolitan authorities are net contributors to the 2004–05 standard 3.25 per cent. pot, and we are not trying to run away from that. In the absence of a large grant increase overall, it is simply impossible to give the full benefit of formula change to the winners without unacceptable damage to the losers. For example, without a floor, several authorities would lose 5 to 6 per cent. of this year's grant in 2004–05. The situation is difficult because London representatives feel that they have a case to make and lobby for. However, so do many other colleagues around the country who know that to go below the floor would have been unacceptable.

We will continue to keep the grant formulas up to date, so that if and when floors can be lifted, the MPA will be in a fair position to take an increased share of grant. For example, the provision in the formula for national and capital city functions, which the hon. Gentleman raised, was increased from £202 million to

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£207 million in 2004–05. The gain is locked into the formula and will be realised in terms of grant increase when grant can be eased.

The Metropolitan Police Service increased its budget to £2.208 billion this year: an increase of £170 million or 8.3 per cent. in line with the 8.5 per cent. average increase across police authorities generally. The precept was increased by £28.5 million or 21.9 per cent. I acknowledge the pressures, and hon. Members have referred to the inescapable pressures on precepts and to the possibility of having to tackle issues relating to police authority budget capping. I have no doubt that authorities will need to look at that matter responsibly when considering precepts for next year. They will make well-justified cases for any increases; it is important that they are accountable to local people so that they can explain why increases are necessary. They should want to consolidate the recent gains in police numbers that command universal public support.

In a number of areas, London benefits more than other parts of the country because there is recognition of need. In one of my areas of responsibility—drugs—the Met has been allocated £1.9 million for adult arrest referral, which is committed funding for the next three years until 2005–06. The Home Office is funding the Met to conduct drug testing on charging in selected basic command units—there are 12 at the moment, and another five will be added after April next year. That, along with other specific grants, should be recognised as part and parcel of the fight against crime and the effort to support communities. It also recognises the particular needs of London.

On police numbers, I would like to take the opportunity to congratulate the MPS on reaching record police strength. There were 28,845 police officers on 31 August 2003, some 861 more than in March 2003, and 2,168 more than in March 1997. That is an important part of ensuring police numbers in London, and I am pleased, too, that police support staff numbers increased by 905 in the year to March 2003. Many of the extra staff will be used to free-up police officers from paperwork.

I was pleased to visit Southwark police recently; they provide support to victims of crime who can ring in and discuss their case with civilian personnel. Victims do not therefore have to wait for the police officer involved to come on shift or to come back from leave or from being off sick; a civilian member of staff will act as case manager and give the victims vital support and up-to-date information on their case. There are plenty of good examples of the family of policing growing daily. It should not be forgotten that the Government pay considerable money to support recruitment and retention: 75 per cent. of the cost of the London allowance and £2.4 million towards free travel for Metropolitan police officers. They also try to tackle the problems of housing and additional costs involved in retaining and recruiting police officers in London.

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The MPS received capital grant and credit approvals of £41 million in 2003–04, which may be used for capital investment at the authority's discretion. I cannot say more now, but we hope to announce capital allocations for 2004–05 in a few weeks. We are funding the bulk of the capital cost of the MPA command, control and communications information system. The costs up to 2005–06 are estimated at about £160 million, of which the Home Secretary has agreed to meet up to £140 million. That will provide a centralised "one-stop" call handling despatch operation, improve performance in responding to 999 calls and provide more efficient command control, which is to be welcomed. It will reduce call handling centres from 32 to three and the use of civilians in that process will release about 800 police officers for other duties.

The hon. Gentleman mentioned the state visit of President Bush. I congratulate the MPS on its handling of the security for that visit; I understand that about 5,000 officers were involved and the extra cost was about £4 million. Unlike other forces, the MPA receives an annual grant of just over £200 million for its specific national and city functions, and I have indicated that that will rise next year. It includes extra work for state visits. The £4 million for supporting that event represents 0.2 per cent. of the force's annual budget.

The hon. Gentleman also mentioned further security; there is an element for security in the formula. In addition, in 2003–04 we provided £62 million for the MPS, £6 million for community support officers and £9 million for CSOs to be more widely used. I will get further information on the terrorist situation if the hon. Gentleman wants it, as I do not have it to hand. We are considering the issue of the role of the MPS and other agencies in tackling terrorism on the streets of the capital city.

I hope that the hon. Gentleman feels that we recognise the strength of the MPS and what it does in the city of London. However, there must be a balance; we must ensure that we take into account all forces in the United Kingdom and provide accordingly for special grants and the recognition of special needs. In a number of areas, London is receiving considerable funds for that purpose.

Finally, on asset recovery, I am pleased to say that a multi-agency asset recovery team incorporating a money-laundering team will be established in London, paid for from the proceeds of crime, to the tune of £5 million. A very good job has been done in London with Customs and Excise in respect of Operation Payback, which has been a great success. I am considering incentivisation for police forces, not just in London but elsewhere, to ensure that they look at criminals' assets, to ensure that where we can do so we get those back and use them for good rather than for bad purposes.

Question put and agreed to.



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