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Lynne Featherstone (Hornsey and Wood Green) (LD): It would have been helpful if the Government's report had incorporated all the funding in support of the fight against crime. If so, we would know exactly what the Government are doing in the round and where the grant to the police authorities will be affected by movements elsewhere in their funding priorities. We have heard some of the detail today but have not had it before; if we had, we could better have assessed the shortfalls, of which there appear to be some.

Has the Minister taken into account that when, as he announced, extra funding is provided for security forces and counter-terrorism operations, which fall outside the police grant, there is a knock-on effect for local police, who inevitably see their work loads rising, to some extent, as they service and facilitate those extra activities? Hence, there is a need for extra funding to match that increase, as the local police and security forces often work together.

I have been in contact, like other Members, with the Association of Police Authorities as well as the Association of Chief Police Officers. Both have
 
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expressed serious concern about the grants. As the hon. Member for Arundel and South Downs (Nick Herbert) said, they face a funding gap, in broad terms, of £250 million, which would need an annual funding increase of at least 6 per cent. in 2006–07 and 2007–08. That would put many authorities in extremely difficult positions. They would either face cuts or have to raise council tax at a critical time for the country, a time at which we must support our police and enable them to carry out their job properly.

Police budgets now include the need to maintain the higher number of police officers we thankfully have. That increase in officers has delivered many benefits in reducing both the fear of crime and crime itself. All parties have welcomed the safer neighbourhood scheme and the return of policing and patrolling at the neighbourhood level. But the real cost will not be adequately funded by the grant in the report, and there must be a danger that police numbers will be reduced as a result.

Mr. Gray: As I understand her premise, the hon. Lady believes that we are satisfied with the level of policing in local areas and on the ground, and are merely concerned about how the grant will pay for them. She has not been to Wiltshire, where we are deeply unhappy about the level of policing. We are not seeing the police on the streets, and this grant will make that worse.

Lynne Featherstone: The hon. Gentleman is quite right. I am not saying that we are satisfied, merely that all parties welcomed the safer neighbourhoods scheme as a means to bring policing back to local areas. Whether it has come back to his area I cannot say; clearly, it has not.

The real costs will not be adequately funded by the level of grant in the report, and if it is not satisfactory now, it certainly will not be next year. Increasing burdens are imposed by pay inflation, new legislation and Government initiatives, and police authorities are inevitably going to find themselves short of a bob or two—or, indeed, a bobby or two.

Stephen Pound (Ealing, North) (Lab): Stop, stop. The hon. Lady is spoiling us.

Lynne Featherstone: Just a bit of humour.

The Government have introduced masses of new legislation, with all that that entails in what is expected of the police. There is now the burden, which will constantly increase, of enforcing those new initiatives, whether they be drink banning orders or enforcement matters, such as those on home furnishing companies selling cutlery to people under 18 years old. Also, the change that means all offences are now arrestable will, in itself, create more of a bureaucratic paper chain without, despite all the talk about technology, the on-street technology necessary for a modern police force, so that officers can spend more time on the streets. Even traffic wardens have gizmos that send messages back and forward. There are burdens from alcohol disorder zones, increasing numbers of antisocial behaviour orders, policing the one third of ASBOs that are
 
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breached, dispersal zones and new powers brought in under the licensing changes. An endless stream of new duties has been imposed on the police, and those new statutory responsibilities, as well as delivery of police reform, including the neighbourhood policing initiative, bring significant costs.

Hon. Members will no doubt speak—they already have, to an extent—on behalf of their own police authorities, but it is clear that a significant number of authorities feel that the increase in funding is inadequate and will cause difficulties in fulfilling expectations and keeping up the standards that the public want. They will struggle to meet ongoing cost pressures.

The Metropolitan Police Authority, on which I served for five years before I came here, is an example. My Liberal Democrat colleagues at the Greater London assembly have consistently asked for more money for London policing, not least because of the considerable extra burden on London caused by national and capital city functions, and so that it does not abstract officers from other areas. I was therefore disappointed to see that the MPA's total revenue grant entitlement had fallen by £1.764 million.

Under the new grant formula, the Met's entitlement increased by only 1.15 per cent. That is why the Liberal Democrats and the Mayor of London have been arguing about the Mayor's failure to persuade the Government to adopt a distribution formula that would give London its fair share. To avoid extreme changes in one go, the Government have used floors and ceilings. At the time of the consultation, the floor was set with a minimum increase of 3.2 per cent. for every police authority, with a formula entitlement of less than that. Hence, the MPA was due to receive a 3.2 per cent. increase, although its entitlement was only 1.15 per cent. As a result of the consultation, however, the Government adjusted the grant upward for some police authorities. Because the total available does not change, they have reduced the floor to 3.1 per cent., resulting in a reduction for the MPA, which will also apply next year. Even if the allocation were to increase, the authority would not necessarily get more money as a result of the floor.

We have heard of other grants today, and the Metropolitan Police Service also bid for about £140 million extra but has got around £30 million. It will all go on extra work and staff, so the service will be no better off. The Commissioner of Police of the Metropolis, who I understand has just arrived at the function that I was meant to be hosting, has said to the MPA that what is not funded will not be done. That is serious for London. Another part of the Met's work involves the security services, including MI5. Funding has been increased hugely, but that puts more pressure on the Metropolitan Police Service.

As for special payments, a report produced about two years ago showed that the MPS costs for the capital's royal and diplomatic protection were up to £45 million a year more than the special payments. Seemingly, despite Mayor Ken coming back into the Labour fold, he has been unable to persuade the Labour Government to recognise the importance of policing to Londoners. Does the Minister agree that the disappointing increase in the grant entitlement to the MPA, of slightly more than 1 per cent., represents either a failure of the Mayor
 
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of London to persuade the Government of London's particular needs, or a failure of the Government to understand London's needs?

I am concerned that the increase in police funding is increasingly being paid for by an increase in council tax. The 6 per cent. increase that the Association of Police Authorities and the Association of Chief Police Officers have termed necessary to meet costs will have to be made up by taking the money out of our pockets through the precept. It was said last year that council tax would have to rise to 12 per cent., but police authorities say that they will have to increase reserves to maintain the capped level. That will not happen two years in a row. In addressing the issues of crime and antisocial behaviour in our communities, the Government have been able to push more and more of the costs on to council tax payers through the precept.

Police forces now have to decide at what level to set their budget and to what level they want to raise council tax. Council tax is not a fair tax. It is not fair on the elderly, who have no chance of increasing their income to deal with council tax increases. That applies especially to women, whose pensions are a scandal. It cannot be right to fund ever-increasing police expenditure in this way. The amount of police expenditure that is funded through council tax has more than doubled. It now accounts for more than 21 per cent. of force expenditure compared to 12 per cent. in 2001–02.

We all agree across the parties that there is a need for   more police officers on the street and support for safer neighbourhoods. However, as I speak, the Government's proposals to merge police forces deliver a double whammy for local communities. People will be expected to fork out more council tax to pay for the funding gap. At the same time, they will have less of a say in how their police force is run. Indeed, there will be a triple whammy in that we do not know where the cost of the proposed merger will be lumped. Well, we can all guess.

We are faced with a rushed and expensive merger programme that will cost millions of pounds for our police forces to put in place. We all realise and acknowledge that smaller forces can struggle with complex cases, but they should be provided with a national resource on which they can call, or another form of commissioning on which they agree. They should not be forced into a merger that will seriously undermine local accountability.

It seems that the Government, especially given the written statement today, are determined to push on and, effectively, financially to punish police forces that do not wish to merge. Moreover, the Government are obsessed with micro-managing policing throughout the country. The latest example is the Police and Justice Bill, which is coming down the track at us. I raise the matter because the police grant to police authorities will be controlled, if we are not careful, by the Minister. The Bill will give the Home Secretary power to intervene in the business of local authorities; for example, who sits on them, what qualifications they have and how many members there are. Even more seriously, their autonomy will be removed and their function constrained by suggesting what police authorities should be focusing on in their own communities. That is not only Big Brother, but a rather nasty and controlling influence.
 
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While the grant will be given, local control will be taken away. The Home Secretary wants carte blanche to meddle in the composition of police authorities without having to ask for parliamentary approval. No reassurance is given to those of us who are concerned about the loss of local accountability under the police merger plan.

As we have heard, police authorities have continually and successfully exceeded their annual efficiency and savings target of 2 per cent., including cashable savings of 1.5 per cent. As has been said, the Chancellor of the Exchequer even paid tribute to the police service for its success on efficiency savings. Clearly paying tribute is cheaper than paying.

Separate to the settlement, a total of £125 million in capital funding over two years has been held back by the Government to be handed out to any police authorities volunteering for mergers under the Government's plans. Will the Minister announce where that £125 million is going? I would welcome a statement from the hon. Gentleman assuring us that all the police forces that do not merge will not suffer and will not receive less funding as a result.

The Government's grant proposal is not enough overall. There are some winners, but there are many losers. They will have to make a terrible decision between unacceptable cuts, given that we have a service that is only just recovering from the swingeing reductions in finance that were imposed on it by previous Governments, or increases in council precepts that will hit the most financially vulnerable in our communities.

6.46 pm

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