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Nick Herbert (Arundel and South Downs) (Con): I welcome the Minister's announcement that the grants will be made over a two-year period, which will help police authorities to plan, something for which my predecessor, my hon. Friend the Member for Sutton Coldfield (Mr. Mitchell), called two years ago, as the Minister may be aware. Given the amount of the settlement, police authorities will certainly need help.

The Minister says that the settlement is generous, but the truth is that the Home Office is giving police forces less money than at the 2001 general election. In this financial year, 2005–06, the Home Office general grant for police expenditure is £4,574 million, which, adjusted for inflation, is less than the £5,094 million given to police forces in 2001–02. I am happy to concede that there will be an increase in the grant over the next two years, but funding will still be lower in 2007–08 than at the 2001 election, when the Government promised that police funding would rise.

Michael Fabricant: Does my hon. Friend agree that the funding pressure will be exacerbated by—in some instances, forced—police mergers? The Minister talked about the provision of an extra £125 million to finance those mergers, yet some estimates are that it will cost as much as £550 million, so there will be a huge shortfall. Will not that make the situation even worse?

Nick Herbert: My hon. Friend is right—the costs of amalgamation will increase the pressures that police authorities will already face as a result of the settlement.

Mr. Blunt : I am grateful to my hon. Friend for giving the House the figures for 2001. That was the end of the Conservative Administration's three-year spending plan, which the Government took on in 1997. In fact, the Government's spending has fallen away from the plans they inherited in 1997 and stuck to for their first three years in office.

Nick Herbert: My hon. Friend is right. The burden has actually been met by local tax payers. As my hon. Friend the Member for Lichfield (Michael Fabricant) suggested, when amalgamations are taken into account, we can see that the real burden of police spending has not been properly quantified. It is being met by council tax payers.

When the Government came to power in 1997, £932 million was being raised for police forces by councils through the local police precept. Today, that figure is £2,335 million—two and a half times as much. In 1997, nearly 85 per cent. of police forces' gross revenue expenditure was financed by the Government. In 2004–05, the latest year for which figures are available, central Government's contribution has fallen to significantly less than 70 per cent. Meanwhile, the amount of police expenditure financed through council tax has almost doubled in real terms since the Government came to power. Council tax now pays for more than a fifth of police force spending, compared with just a ninth in 1996–97.

The Government never cease to boast of the investment, by which they mostly mean spending, that they have put into policing. In her statement on
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5 December, announcing the draft grant figures, the Minister for Policing, Security and Community Safety said:

However, as so often, the Government have raised the money by stealth from council tax payers. Every time that the Government seek to claim the credit for putting more police on the streets, we need to remind local people that they, not the Chancellor, have largely footed the bill.

Today, the Home Secretary announced in a written answer, not a statement to the House, that he intended to proceed with police force amalgamations. As my hon. Friend the Member for North Shropshire (Mr. Paterson) pointed out on a point of order, that is an extraordinary way to announce something that has major constitutional implications, as Her Majesty's inspector of constabulary conceded in his report. The allocations for capital results proposed in the December statement already show a fall in real terms in the second year. Moreover, the Home Secretary has announced that £125 million of that funding will be used to meet the costs of police amalgamations, so resources that should be spent on improvements to policing will be used to pay for management consultants, merged IT systems and new headquarters.

Andrew Selous (South-West Bedfordshire) (Con): Does my hon. Friend share the analysis put to Bedfordshire MPs last night, by those members of Bedfordshire police authority who are responsible for finance, that if significant merger costs are imposed on Bedfordshire police but not picked up by the Government, if the police precept is capped, and because the savings will be made some years ahead, it will mean in practice that that will affect the number of police officers on the ground over the next few years?

Nick Herbert: That analysis is absolutely correct. In the absence of the Government funding the costs of amalgamation, only two things are possible: either the police precept must increase or services must be cut. As the Government are saying that the precept cannot be increased—it will be capped—the result is that front-line services will be cut, unless new funding is provided to meet those costs.

As we pointed out last week, the Association of Police Authorities has quantified the cost of amalgamations at £525 million, based on the detailed calculations of each police authority. After the Home Secretary's provision of £125 million, that leaves a gap of £400 million, as was made clear by my hon. Friend the Member for Lichfield. The Home Secretary is providing less than a quarter of the amount needed to fund amalgamation. How will that be financed? Either more than two thirds of the entire capital provision for police forces, which the Minister has just announced, will be spent on amalgamations or, once again, local taxpayers must foot the bill.

The Minister has said that police authorities can finance amalgamations with prudent borrowing. We might have expected that suggestion. The Government are not exactly averse to borrowing, however imprudent
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doing so might be, but whether or not authorities borrow the cost will be met ultimately by local tax payers. Assuming that police authorities do not cut services, the average police precept would rise by 21 per cent. to fund the amalgamations. That would involve rises of between £15 and £37 on the average council tax bill on a band D property. That comes on top of already planned increases, which we will no doubt hear about later.

Michael Fabricant: I wonder whether my hon. Friend would be surprised to learn that at a recent meeting with the Staffordshire police authority and with the chief constable—John Giffard, who is in some ways the architect of all the mergers—a case was put for the merger for Staffordshire. However, of the 11 Members of Parliament present—in Staffordshire nine are Labour, only three are Conservative—

Kevin Brennan (Cardiff, West) (Lab): That makes 12.

Michael Fabricant: All 11 Members of Parliament present—there are 12 Staffordshire MPs of which nine are Labour and three Conservative—only two MPs were in favour of the merger. All the rest felt, as my hon. Friend says, that a merger would be not only inefficient, but a burden on the council tax in Staffordshire.

Nick Herbert: My hon. Friend is right about the scale of opposition to the merger in the west midlands, not just from hon. Members on both sides of the House, but from local people as well. In opinion poll after opinion poll across the country, local people have emphatically rejected amalgamations.

As I said, the police precept will have to rise by 21 per cent. to fund the amalgamations. The issue is how that fits in with the Minister's insistence that council tax rises should be minimised or else the Government will take capping action, to which my hon. Friend the Member for South-West Bedfordshire (Andrew Selous) referred. On the one hand, the Government are landing police authorities with a huge bill for a restructuring that most of them do not want, but for which the Government refuse to pay; on the other, they are threatening capping if police authorities try to finance the costs themselves. Police authorities cannot win except by cutting services.

The Minister for Policing, Security and Community Safety has dismissed the Association of Police Authorities' estimate of the costs. In that case, let us hear the Government's estimates. Today, the Home Secretary announced that he intends to proceed with police force amalgamations in four regions before he has received that assessment of the costs. He is driving the restructuring through, without local consultation, to an unnecessarily tight timetable and with no idea of what the costs might be.

On the figures of the Association of Police Authorities, the north-east regional force will cost £29.2 million and add more than £30 to Cleveland's council tax bills on band D properties. The three-force option in the north-west will cost £47 million and add £32 to Cumbria's council tax bills. The Welsh national force will cost £59.7 million and add more than £33 to council tax bills in north Wales. The west midlands force, to which my hon. Friend the Member for Lichfield referred, will cost £41.8 million, adding more than £30 to Staffordshire's council tax bills.
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The Home Secretary's written statement this afternoon will cost £175 million—nearly half of the capital provision for next year—and there are still five regions to go, assuming that the Government intend to proceed with amalgamations in those regions, setting aside London.

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