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Ms Blears: The hon. Gentleman is correct to say that the proportion borne by precept payers has increased in recent years, but the amount of investment from the centre has increased even more. There has been an increase of 30 per cent. in funding from the centre, and therefore there is no attempt to push the burden on to council tax and precept payers. Equally, where there is a demand for good, effective, visible and accountable policing in communities, it is a local responsibility as well as a national one to ensure that funds are in place to enable that to happen.
Across Government, we will also invest £1.3 billion in the national drug strategy next year, which will make a real and significant contribution to breaking the link between drugs and crime.
Simon Hughes (Southwark, North and Bermondsey) (LD): Does the Minister recognise that her colleague Robin Wales, who chairs the Association of London Government, speaking on behalf of all London councils, has called her settlement disappointing for the Metropolitan Police Authority? The impact of the new formula, together with the transfer of funding mentioned by my hon. Friend the Member for Twickenham (Dr. Cable), is the equivalent of a 9 per cent. council tax increase. Do the Government accept that their new formula for London will be the direct cause of 9 per cent. extra on the police budget for London council tax payers in April this year?
Ms Blears: No, I do not accept that in the terms in which the hon. Gentleman chooses to put it. I will come to the settlement for the Metropolitan police, but they will get a significant increase in general grant as well as in many of the specific grants, including the formula for capital city functions. Extra funding will also be provided for the costs of the counter-terrorism work in which the Metropolitan police are particularly involved. I certainly do not accept the hon. Gentleman's formulation.
There have been hard choices to make this year. We were always clear that this would be a difficult year in the spending review settlement, and I am very aware that recent changes to the funding formulato better reflect forces' needs and to distribute police grant more fairlywere implemented for the first time only this year.
Funding formulae always involve difficult decisions, but we must try to ensure that the funding system operates as fairly as possible for everyone.We have decided, exceptionally, to provide a standard general grant increase of 3.25 per cent. for each police authority in England and Wales in 200405. That is in recognition of the financial pressures on police authorities and our concern to avoid excessive burdens on council tax payers when police authorities set their final budgets for next year. Some authorities would benefit considerably were we to distribute general grant solely according to the needs-based formula. However, we have had to take full account of pressures across the board to ensure that all authorities could keep police precepts at sustainable levels next year and that policing services continue to improve. The general grant increase is well above inflation and will meet, in particular, the pay increases announced for next year. I want to assure hon. Members that we will try to get back to some better reflection of the funding formula in future years.
I shall give some examples of the effect of the flat-rate settlement. Essex will gain more than £15 million, Kent more than £14 million, Surrey £15 million, Sussex £10 million and Thames Valley nearly £5 million. It is clear that there are some significant gainers from the operation of the system this year, and some significant losers, too.
Mr. David Heath (Somerton and Frome) (LD): The Minister has just said that she expects council tax increases this year to be sustainable. Elsewhere, she has said that she expects them to be low. Her ministerial colleague with responsibility for local government has suggested that any council tax increase for local authorities that is greater than a low single figure percentage increase would be unacceptable. Is that the sort of increase that she expects for police authorities, and if the increase is higher, does she intend to cap them?
Ms Blears: Clearly, the exercise of capping powers will be a matter for the Office of the Deputy Prime Minister but, as I said previously, I have been keeping in close contact with my right hon. Friend on those matters. I understand that the local government settlement is 5.5 per cent., which is a significant real-terms increase that builds on previous significant real-terms increases, so it is perfectly proper to ask authorities to try to keep their increases to low single figures in view of the amount that has gone into local government services. The hon. Gentleman will know, as I do, that the extra money found in December£340 millionwas specifically targeted on social services and the liveability agenda, so that is extra help for local government, too.
The Home Secretary is writing to the 10 police authorities that we think are likely to be at the high end of police precept[Interruption.] I can certainly supply the hon. Member for Southwark, North and Bermondsey (Simon Hughes) with a list of those authorities. The Home Secretary and I will be in direct contact with a wider range of authorities to discuss those issues. The issues are serious; it is not simply a matter of setting arbitrary figures, but of trying to support the authorities in making appropriate settlements.
For next year, we have done everything possible to maximise the increase in general grant. Time and time again, authorities say that they want more flexibility to spend the money as they see fit, so we have added £140 million from wider Home Office resources to general grant provision. We have also taken £100 million from existing and planned specific grantsnot just the Airwave moneyand central spending to try to increase the scope for police authorities to determine their own spending.
As in the last two years, we have made arrangements to ensure that Welsh police authorities receive support comparable to that for police authorities in England. We are providing special grant totalling just under £14 million to Welsh authorities next year. That is provided from outside the general grant settlement, as there are not enough forces in Wales to apply the floors and ceilings, and that will bring their allocations up to the 3.25 per cent. increase, in line with their English counterparts.
I have already dealt with matters relating to Airwave, and I hope that the extra money that we are providing will assist forces in that regard.
As part of the consultation exercise on the funding settlement, I have received 63 representations covering 32 police authority areas. I have received letters from chief constables, police authorities and hon. Members. I have met as many hon. Members and delegations as I possibly could during the consultation period. People expressed concerns about 10 big issues. Naturally, the biggest was the overall level of the settlement, because everybody would like more money, but the second biggest was the suspension of the funding formulaa point that has already been raised by hon. Members today. There were also concerns about the rural policing fund, the Airwave grant, the fact that there were no extra funds from the Chancellor's pre-Budget report, the effect on police precepts, the floors and ceilings, the area cost adjustment and the assumed national council tax ratewhich I have endeavoured to understandand its possible effect on the police precept.
I have taken into account all the representations made to me, whether in writing or at meetings, but I want to deal with a couple of those concerns. The first is the suspension of the funding formula. The funding formula is a fair guide to relative needs and we minimised use of it this year only with the greatest reluctance. The formula is based not only on crime rates, but on employment, density, population, including residential population, and tourism, and it provides an accurate measure so that we can direct our resources to the places with the greatest need. This year, obviously, we have taken exceptional decisions.
We have tried to protect police authorities from excessive year-on-year fluctuations by the introduction of floors and ceilings in 200203, but this year, with a standard-rate increase, the floors and ceilings are, in effect, at the same level. Through that arrangement, nine forces have contributed about £106 million to increase grant for forces that would have been below the floor of 3.25 per cent. I recognise that many of those making contributions to the funding floor feel that they are not
getting their full share of the funding pot, but I have had to consider the need for financial stability across the board.
Mr. Paul Truswell (Pudsey) (Lab): The situation for West Yorkshire is an example of what my hon. Friend has just been talking about. Does she acknowledge that the authority has not shared in the record increase in police officers, that the number of police per head of population in West Yorkshire is less than in any other metropolitan area, that as a result of floors and ceilings over the last two years we have lost grant of about £16 million and that the authority faces exceptional expenditure of more than £13 million as a result of the Bradford riots? Will my hon. Friend take that into account both when considering the precept and disbursing the extra money to which she referred earlier?
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