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Mr. McNulty: Yes, but every single PCSO in Norfolk would not be there without the investment, resources and policy of the Government. I had a very constructive meeting with—I think, to be fair—the Conservative leader of the county council, a range of his officers and others, and we had a very interesting debate about exciting plans to take Norfolk forward. I wish him well in that regard and the plan has the full support of
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district councils, the county council and everybody else. They need to make the judgment—I cannot make it for them—in terms of where they set their precept and what they do with their budget, but they did express some very interesting plans to me.

I apologise to the hon. Member for South-West Norfolk (Mr. Fraser), as I was flicking open the Dorset page and had forgotten momentarily—I do not say this in any nasty way—that he had shifted seats, so I am glad that he said Norfolk; otherwise, I would have quoted liberally about Dorset.

Mr. Fraser: That is good, then.

Mr. McNulty: Perhaps I should have been nastier, in that case.

To return to my speech—I will respond to individuals’ substantial contributions later if there is time—I hope hon. Members will indulge me if I do not dwell on the 20 pages left as a result of my taking so many interventions. I will just make some broad points.

I take seriously what hon. Members have said about damping the formula. Having looked, lived and breathed the figures for so long, I say in all sincerity that there is a need for a substantive debate on where we are going with the local element of police finance and the huge disparity between authorities. I do not say that in any way to cast doubt on how we have got to where we have. As I said to some hon. Members, history is largely responsible for it, but it cannot be right to have such a huge spread between the level of the precept and how much it contributes to the overall budget in what should be, taking account of variations in local circumstances, a national service delivered regionally and locally through constabularies. There will be issues around that.

Mr. Ian Taylor: I made a sedentary intervention earlier and the Minister noted that Surrey is virtually at 50 per cent. and will soon go through 50 per cent. of the precept. The problem for the people of Surrey is whether that means that, when it goes through the 50 per cent., the rules for Surrey police should be set by local residents rather than by the Government.

Mr. McNulty: The balance between the two is partly what I have been referring to. I think I mean that in the context of the outliers on both ends of the scale. It is even more complex in the sense that those with lower precepts are not necessarily those that have the lower contributions from a local level to overall police budget. It is not as simplistic and linear as that. When I talk about collectively having a look at the finance base and the local contribution, I do not necessarily mean that everyone should gather up to the Surrey level in terms of a contribution, although I know the precept is high. Nor do I mean that everyone should be down at the Durham and Northumbria ends, where we are talking literally of £88 for a precept in one case and just more than £100 and some contributions of 18 and 20 per cent. in others.

There must be a way of collectively having a debate that is not about the national contribution or the level of funding from the centre, but perhaps more about round the edges. Increasingly, what are national
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policing issues—above and beyond things like counter-terrorism, which should be funded from the centre—need to be balanced by an argument about what the local contribution should be. I understand the point. It is specific at that end—in part, the Met, though it has a large population base, and Surrey and Sussex and one or two others—and at the other end historically are some other parts of the Met and some of the northern authorities.

When we get to a situation where there has been significant investment over 10 years and where it is flatlining or becoming less in terms of growth—growth is still way above inflation—and there are these tight and serious decisions to be made on a force by force basis, the flexibility around the local contribution is a serious element of the equation.

Significant representations have been made about the settlement. I think that we received some 40 written representations, covering some 26 police authorities, including letters from the Association of Police Authorities, chief constables, police authorities and MPs. Representations were made—interestingly, I think—chiefly in nine areas. They are the original level of the settlement, capping and council tax policy, continued use of a funding floor, police grant for the next three years—in terms of the comprehensive spending review for 2008-09 to 2010-11—capital provision for restructuring, neighbourhood policing, funding flexibilities, police efficiency and specific grants. Broadly, those issues were covered by hon. Members in today’s debate.

Mr. Roger Williams (Brecon and Radnorshire) (LD): I understand that the Minister received representations from members of the Dyfed-Powys police authority, who were accompanied by a Minister from the Wales Office. The main issues were community support officers and how Dyfed-Powys producing its budget more prudently had worked against it. The Minister wanted to allow the authority to work towards having more community support officers, but not as many as it hoped to secure. Will the Minister comment on that?

Mr. McNulty: The hon. Gentleman is entirely right that the meeting with the police authority and some MPs from Dyfed-Powys was focused on those issues. Given the accelerated targets for PCSOs by April 2007—ably assisted and funded by my right hon. Friend the Chancellor to the tune of £90 million—Dyfed-Powys was one of the authorities that said that it would rather sit out from the target and then try and pick it up again subsequently. The authority was effectively penalised, through not fault of its own, so I promised that I would look again and see whether more funding could be found to get back on target—not just for Dyfed-Powys, but for Gwent and Cleveland. To be fair, we had squeezed the pot dry—if pots can be squeezed—to the extent that although I was pleased to find some moneys, I do not think that Dyfed-Powys should hold out much hope for further moneys from the centre as part of the exercise. I was pleased to find at least some.

Tony Baldry (Banbury) (Con): The Minister went through the various representations that he had received. Earlier in his comments, he said that he did not want to
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restrain the police authorities by flatlining them. He has made it clear that one of the main concerns of police authorities is that, over the remainder of the comprehensive spending review, it looks as though there will be flatlining. I do not understand how the Minister can reconcile his earlier comments about not wanting to restrain police authorities by flatlining them with the fact that over the next two or three years of the comprehensive spending review, they are going to be flatlined.

Mr. McNulty: With the greatest respect to the hon. Gentleman, that argument works only if police authorities are rather like a child and being spoon fed. If the resource base becomes static after 10 years of growth, there are ways in which police authorities and constabularies can look at everything they do to gain further efficiencies beyond what they do now.

The debate—in part, the wider financial debate—about contributions from the local level is one that I hope we can have. We need to see what the balance is and what it should be. It involves the notion of capping and the notion of the relationship between the local precept and the council tax. It involves the contribution from the centre and what it should be in all equity from local areas. There is much to be debated about that.

I take the point that we are achieving sustained, but far lower, growth over the comprehensive spending review periods than we have thus far. One of the advantages of two-year—and, hopefully, eventually three-year—settlements is that they can begin to be planned for. I do not accept the notion, which belies experience as well, that throughout those eight or 10 years of sustained and relatively high growth, all that police constabularies have done is put the money in their pocket and just carry on as they normally do. There have already been enormous efficiency gains across police authorities. Significant examination of how police authorities and constabularies do what they do has also taken place. To be fair, the picture today, 10 years on from 1997, of what they do and how they do it is enormously different. That must continue because things are ever changing.

To put it simply, the terrorism threat is enormous today compared with 1997. All forces work alongside local councils far more readily than they did 10 years ago on, for example, antisocial behaviour and community safety. There is now a genuine multi-agency approach, to use the lingo. The balance and mix throughout the country of police officers, police staff, other specialists and analysts is rightly different from the position 10 years ago. That should continue.

In short, police authorities and constabularies need to do significantly more in a different way with the high but fixed growth rate of resources. It is a case of much more than, “Daddy, stop giving us money, we can’t do things.” I appreciate that that is a generalisation of the comments of the hon. Member for Banbury (Tony Baldry); it is a form of short hand.

I shall now conclude my speech because I have been on my feet for 50 minutes or so, although about 30 minutes were taken up with interventions. I am grateful for interventions and happy to take them, but we need to move on. I also appreciate that there is a time limit on some hon. Members’ speeches.

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The comprehensive spending review years and the multi-year settlement provide challenges, with which forces will start to wrestle as they settle their budgets this week. There has been a good efficiency record and I expect it to continue. I believe that the police authorities and constabularies want it to continue because the efficiencies that they make release funds to spend elsewhere rather than being clawed back to the centre.

There is a good news story about what police authorities have to do and where their priorities lie. We have listened carefully to all stakeholders in determining the detail of the settlement, which is a good one. Our proposals will ensure that all police authorities in England and Wales receive a fair share of resources next year. We have added to that some funding flexibility so that forces get the work force mixes right locally, balance their budgets and continue to improve the service.

I am sorry that I have taken slightly longer than I anticipated but I appreciate the local dimensions to the debate and I wanted to take as many interventions as possible. I commend the police grant report to the House.

1.32 pm

Nick Herbert (Arundel and South Downs) (Con): I thank the Minister for Policing, Security and Community Safety for setting out the grant settlement for this year, but I fear that what he said left many questions unanswered.

It is clear that the police fear that the 3.6 per cent. increase in their budget this year means that money is already tight. The Association of Chief Police Officers and the Association of Police Authorities estimate that the police service needs an annual 5 per cent. increase in its budget simply to stand still. The president of ACPO said:

Mr. Nicholas Soames (Mid-Sussex) (Con): I am grateful to my hon. Friend for giving way so soon in his response. As a fellow Sussex Member, he knows that Sussex police have been asked to do more and more. The settlement will make it much harder for them to deliver the target of 525 police community support officers, for which they budgeted under earlier Government commitments. The current plan will leave them with 171 fewer PCSOs. Does my hon. Friend agree that, in his constituency and mine, that represents a genuine disappointment for people who appreciate PCSOs and know that they do a valuable job, especially on low-level vandalism and antisocial behaviour?

Nick Herbert: I agree. The consequence of the so-called flexibility that the Minister mentioned is the withdrawal of the promise of 171 PCSOs in Sussex, or 8,000 nationally—4,000 in the so-called respect areas that the Government announced only a week ago.
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Chief constables throughout the country were busy making promises to communities about the additional policing that they believed that they could provide. They will now be unable to do that.

Martin Horwood (Cheltenham) (LD): The hon. Gentleman is right to draw attention to the cut in the target for PCSOs. In Gloucestershire, that translates into 74 PCSOs that we were expecting and needed, but will not now get.

An additional problem is that the one-off funding that is being provided in lieu of the permanent final tranche is heavily skewed towards London and the Metropolitan Police Authority. In Gloucestershire, that means only £167,000 in one-off funding instead of the £1 million in permanent funding that we expected. Will the hon. Gentleman comment on that?

Nick Herbert: I agree. The Metropolitan Police Authority received the lion’s share of the remaining funding, although the Government withdrew £70 million. The Met received approximately two thirds of what remained, leaving the provincial forces even shorter of resources. That means that they cannot provide the promised number of PCSOs.

As ACPO’s head of finance pointed out, the settlement is not all that it seems. A range of specific grants, for example, for forensics, supports the general grant. In most cases, they have been frozen. Consequently, as ACPO’s head of finance, Dr. Tim Brain, who is also chief constable of Gloucestershire, said, the overall value of the general grant to forces and authorities has been substantially reduced. That will put further pressure on force budgets.

In my force in Sussex, the special formula grants for rural policing, forensic testing, special priority payments and south-east allowances will remain unchanged and frozen at last year’s levels. That amounts to a cut of 2.8 per cent. in real terms and will cause the force and the authority problems.

Albert Owen: The hon. Gentleman has been told that police inflation is some 5 per cent. However, a significant part of police expenditure is on pay. The settlement this year was 3 per cent. and the formula was 3.6 per cent. How does he calculate 5 per cent. inflation for the total budget? I am interested in his reply.

Nick Herbert: The hon. Gentleman is right: more than 80 per cent. of a police force’s budget is spent on pay. Pay increases generally outstrip the rate of inflation because the pay settlement is index linked. Other costs increase as the police’s mission widens. Consequently, as the Minister pointed out, forces have to make efficiency savings year after year.

The genuine question is not about this year, when forces are already beginning to face difficulties, but about future years under the comprehensive spending review. The Minister alluded to that, but we need to examine the matter. From next year, which is the first year of the comprehensive spending review settlement, the Home Office budget will be frozen in real terms, and the police have been told to expect an increase of no more than 2.7 per cent. It could be less than that. Consequently, police budgets from next year onwards will be frozen in real terms.

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The Association of Police Authorities and ACPO estimate that, by 2010-11—the third year of the proposed settlement—the police could face a funding gap of as much as £966 million. To put that in context, the police’s annual national budget is £10 billion, so we are considering a potential funding gap, as set out by the APA and ACPO, of 10 per cent. of the national policing budget. That will pose very serious challenges for the police. In a document called “Sustainable Policing”, the associations point out that the risk posed by under-resourcing is not that policing will suddenly collapse, but that with the contraction of capability the services provided to communities will erode, and particular functions will either be withdrawn entirely or unable to perform to acceptable levels.

Concerns are already being expressed up and down the country about the funding that police forces might have in future. The Police Federation has gone so far as to claim that 999 calls could take longer to answer, and that the number of fully trained officers will be reduced. I will refer to that in moment. The Hampshire force is already looking to make a 10 per cent. cut in services in the next financial year, according to the local police federation, and if there is no significant increase in funding, which there will not be, its police authority predicts that it will have to make a cut of 20 per cent. the following year. Durham constabulary is axing 100 police officer jobs and in the next financial year plans cuts of £3 million. Surrey has described its budget for the forthcoming year as insufficient. As my hon. Friend the Member for Mid-Sussex (Mr. Soames) has said, Sussex is predicting a budget deficit of £6 million and cutbacks. North Yorkshire police considers the situation sufficiently dire that the police authority predicts that even a 5 per cent. increase—which it will not get—would leave a £3 million deficit next year. West Mercia predicts a £1 million gap in funding, with further more acute financial concerns over the next three years.

Mrs. Maria Miller (Basingstoke) (Con): My hon. Friend has outlined several areas, including my county of Hampshire, that are experiencing great difficulty in delivering services, and yet we continually hear from the Government about policies such as increasing visible policing, which are not matched by the budgets to ensure delivery. The people who are left to pick up the pieces and deal with disgruntled residents, however, are the police, not Ministers.

Nick Herbert: I agree absolutely with my hon. Friend. Hampshire and other police authorities up and down the country will face a loss of promised police community support officers—there will be 206 fewer—which will affect her constituency of Basingstoke and others. The chairman of the police authority finance committee has expressed concern about that. It is a pity that in an area where, for instance, the non-emergency 101 number was piloted and customer satisfaction has increased as a consequence, the other side of the equation is a reduction in the front-line policing promised by the Government, diminishing the service available to the public.

Tony Baldry: Is not there another dimension that has not yet been raised in the debate? Given the overall chaos in the Home Office in relation to prisoner numbers and the need for new prison building, is not the danger that the police part of the Home Office budget will be squeezed even more than is projected?

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