Memorandum submitted by East Midland Police
Authorities
JOINT COMMUNICATION FROM DERBYSHIRE, LEICESTERSHIRE,
LINCOLNSHIRE, NORTHAMPTONSHIRE AND NOTTINGHAMSHIRE POLICE AUTHORITIES
POLICE FUNDING
IN THE
EAST MIDLANDS
REGION
1. This submission from the five police
authorities in the East Midlands, is intended to inform the Police
Funding Inquiry by the Home Affairs Select Committee.
2. The five police authorities in the East
Midlands are working together, and with the Home Office, to develop
and implement models of joint working, to deliver improvements
in protective services, alongside continuing improvements in policing
in general across the region. The critical issue for the East
Midlands police authorities is funding.
3. The financial situation facing the region
remains stark, with all five East Midlands police authorities
facing a significant budget shortfall in 2007-08 (Table 1).
Table 1
THE BUDGET SHORTFALL FACING EAST MIDLANDS
POLICE AUTHORITIES IN 2007-08
| Police Authority
| £ million Shortfall |
| Derbyshire | 3.2 |
| Leicestershire | 3.4 |
| Lincolnshire | 4.3 |
| Northamptonshire | 4.9 |
| Nottinghamshire | 4.5 |
| Total for East Midlands | £20.3 million
|
| |
4. The East Midlands contains some of the most underfunded
police forces in the country, with all receiving less funding
per capita than the national average. The region as a whole is
on average in the bottom third of police authorities for expenditure
per head of population. This situation has existed for at least
a decade and has been a problem under successive governments.
Medium term financial projections put the shortfall in the region
of £129 million.
5. An independent study by Rita Hale OBE, an expert in
local government policy and finance, was commissioned in 2005
by the East Midlands Police Authorities. This study shows that
their combined income rose more slowly than inflation between
1995-96 and 2005-06 (in pounds per head terms, a rise of 23.8%
compared to an inflation rate rise over the same period of 28.3%).
6. When assessing gross police spending in 2005-06, the
study found the average for England was £174 per person.
When spending in the region is expressed as a percentage of this
average, as set out in Table 2, it is clear that all five police
authorities suffer in comparison to the rest of the country.
Table 2
GROSS POLICE SPENDING ASSESSMENT 2005-06
| Police Authority | £/head
| % of English Average |
| Derbyshire | 136 | 78%
|
| Leicestershire | 147 | 84%
|
| Lincolnshire | 126 | 72%
|
| Northamptonshire | 139 |
79% |
| Nottinghamshire | 158 | 90%
|
| East Midlands (average) | 143
| 82% |
| | |
7. The study also found that those Police Authorities
whose populations are growing rapidly tend to receive lower per
capita increases in Central Government support than those
with similar characteristics, whose populations are growing more
slowly. This is an important issue for the East Midlands Police
Authorities because:
— The region's population has grown much faster
than that of England as a whole over the period from mid-1993
to mid-2003, ie by 4.1% as compared with 2.7%.
— Two of the Region's Police Authorities—Lincolnshire
and Northamptonshire—have some of the fastest growing populations
in England as a whole.
8. For example, Lincolnshire's population grew by 10.6%
over this period, the fourth fastest growth out of the 39 English
police force areas. Consequently Lincolnshire's base funding position
at 2005-06 is historically low. Indeed, for many years now, it
has received the second or third lowest grant per head of population
throughout the country.
9. With the Milton Keynes and South Midlands growth area
certain to increase the region's population at an even faster
rate, it will be vital for funding to be increased accordingly
in order to meet future demographic demands.
10. The specific challenges and obstacles currently facing
police authorities in the region can be identified in a number
of key areas.
FLOOR FUNDING
11. The existing "floors and ceilings" arrangements
operate to the disadvantage of the East Midlands region, and whilst
there is a need to protect those police authorities whose combined
income from central government sources would otherwise fall—or
rise at a much slower rate than inflation—the cost of that
protection should be met by the Exchequer and not by other police
authorities. In aggregate, the East Midlands police authorities
lost more than £13.8 million of their central support in
2006-07 as a result of the operation of the floors adjustments
and will lose £14.8 million in 2007-08.
COUNCIL TAX
CAPPING
12. The capping regime has been used since 2004-05 and
unfairly restricts the abilities of Police Authorities to make
adjustments to their local budgets that are necessary to maintain
or improve local services, in the face of reduced national funding.
13. The police precept is typically one-tenth of the
council tax bill and a 10% increase in police precept would add
1% to the overall council tax bill. There are therefore opportunities
in many cases for a higher than 5% increase to be applied by the
police authority, which would not necessarily lead to a 5% total
increase in an individual council tax payer's bill.
POLICE COMMUNITY
SUPPORT OFFICERS
14. The region has fully embraced the concept of PCSOs,
and local communities have seen the benefit these officers bring
to supporting the work of the police. However, the funding basis
is not sustainable and is predicated on efficiency savings (which
are already inadequate to balance the books) and partnership funding
(which is restricted by budget deficits in local government).
15. Current levels of funding provides for 16,000 PCSOs
at 75% of their pay. This runs the risk of undermining the initiative,
and will lead to a debilitation of local policing as a result
of support not being at the anticipated levels. Uncertainty over
the future of funding for this specific area could potentially
lead to new posts not being filled while the risk of losing the
funding at some point in the future remains.
EAST MIDLANDS
SPECIAL OPERATIONS
UNIT (EMSOU)
16. The region has been innovative in pooling resources
to establish the EMSOU and has secured time limited national funding
for two years in total of £8 million. Local police forces
have seen a significant improvement in region-wide special operations
work, and EMSOU is a step on the way to closing the protective
services gap. It is one of the best examples in the country of
successful operational collaboration across several force areas,
and should in our view be used as an example of how to help close
the gap in other parts of England and Wales.
17. However, as things stand, central funding for EMSOU
runs out on 31 August 2008: should this funding be withdrawn,
then clearly the unit is not sustainable in its current form.
We would urge the Home Office to continue to support this valuable
resource, and to indicate this support as soon as possible to
ensure continuity of staff and service alike.
CRIME FIGHTING
FUND
18. The government has now sensibly relaxed the rules
around the crime fighting fund and this will be useful to some
forces in improving efficient use of resources through workforce
reconfiguration, however this must not be seen as the solution
to the budgetary gap as the opportunities are not equal across
the region.
MEDIUM TERM
FINANCIAL PROJECTIONS
19. To better understand the level of underfunding in
the region, the financial departments for each of the five forces
has made financial projections for budgets up to and including
2010-11. The projections have been developed on a consistent set
of resource assumptions as follows:
— Central Grant support increase at 2%—this
is in itself an optimistic assumption, given that the Home Secretary
has identified other policy areas such as immigration and probation
services as particular priorities for the immediate future.
— Annual precept increase capped at 5%.
— General Price inflation of 2%.
— Continuation of PCSO grant at 75%.
Table 3 below, shows the budget deficit in each force including
and excluding the impact of PCSO funding and the cumulative position
to 2010-11:
Table 3
| Total | Derbyshire
| Lincolnshire | Leicestershire
| Northamptonshire | Nottinghamshire
|
| Shortfall on Standstill Position (excluding impact of PCSO's)
| £m | £m | £m
| £m | £m | £m
|
| 2007-08 | 15.0 | 2.1
| 4.7 | 2.4 | 3.4
| 3.5 |
| 2008-09 | 24.4 | 2.5
| 8.2 | 2.4 | 3.9
| 7.4 |
| 2009-10 | 33.5 | 3.5
| 11.6 | 1.9 | 4.4
| 12.1 |
| 2010-11 | 40.0 | 4.4
| 14.9 | 1.4 | 5.4
| 13.9 |
Total Shortfall
over the period | 114.0
| 12.5 | 39.4 | 8.1
| 17.1 | 36.9 |
| Shortfall on Standstill Position (including impact of PCSO's)
| | | |
| | |
| 2007-08 | 19.2 | 3.2
| 4.3 | 3.4 | 4.9
| 4.5 |
| 2008-09 | 29.1 | 4.4
| 7.0 | 3.4 | 4.3
| 10.0 |
| 2009-10 | 38.7 | 5.4
| 10.5 | 3.3 | 4.8
| 14.7 |
| 2010-11 | 45.7 | 6.2
| 14.1 | 3.1 | 5.8
| 16.5 |
Total Shortfall
over the period | 133.8
| 19.2 | 35.9 | 13.2
| 19.8 | 45.7 |
| | |
| | | |
20. The headline figure of these financial projections
was that the funding gap for the region by 2010-11, excluding
the shortfall caused by PCSOs, is equivalent to the funding for
800 police officers per annum. This obviously has huge implications
for service delivery.
21. The position is further exacerbated by the impact
of the PCSO funding gap, which is a further shortfall of £20
million over the four-year period.
22. It is also important to understand that these figures
represent the standstill budget requirements, and developmental
needs, including those around protective services, are excluded.
23. The targets for efficiency savings, that commenced
in 1999-2000, expect the police service to be 30% more efficient
by 2010-11. To date, the East Midlands police forces have showed
cashable savings of at least £53 million. However, given
that more than 80% of the budgets are staff wages then scope for
further savings will be limited, unless further redundancies are
enforced.
24. Therefore the region will face stark choices when
deciding its approach to policing services to achieve the cost
reductions required (£129 million) to balance the books.
25. However, even if significant reductions in the cost
base were achievable, it is unlikely that these would be sufficient
to address the budget shortfall, and would leave the protective
services gap unfilled.
Table 4
SHOWS THE CASHABLE EFFICIENCY SAVINGS PLANNED/DELIVERED
IN THE REGION TO DATE
| Cashable Efficiency Savings | Total
| Derbyshire | Lincolnshire
| Leicestershire | Northamptonshire
| Nottinghamshire |
| £m | £m
| £m | £m
| £m | £m
|
| 2006-07 | 12.6 | 2.4
| 2.5 | 2.2 | 2.0
| 3.5 |
| 2005-06 | 13.2 | 4.2
| 1.6 | 2.5 | 1.7
| 3.2 |
| 2004-05 | 7.7 | 0.3
| 1.3 | 1.7 | 1.2
| 3.2 |
| 2003-04 | 3.6 | 0.1
| 1.3 | 0.7 | 0.4
| 1.1 |
| 2002-03 | 2.8 | 0.1
| 1.2 | 0.2 | 0.1
| 1.2 |
| 2001-02 | 4.7 | 0.4
| 1.2 | 0.8 | 1.0
| 1.3 |
| 2000-01 | 4.0 | 0.4
| 1.2 | - | 1.0
| 1.4 |
| 1999-2000 | 4.6 | 0.9
| 0.6 | - | 1.2
| 1.9 |
| Total Savings achieved | 53.2
| 8.8 | 10.9 | 8.1
| 8.6 | 16.8 |
11 May 2007
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