Examination of Witnesses (Questions 51-59)
MR TONY
MCNULTY
MP, MR DAVID
BURGE AND
MR PAUL
REGAN
22 MAY 2007
Q51 Chairman: Minister, thank you very
much, we are very grateful to you. As you know, we have had this
short inquiry, just one evidence session, and written evidence
because we received a number of representations from ACPO, APA
and other bodies about the likely CSR settlements, and it is our
intention to produce a brief report based on the evidence we have
had today and the written evidence as a result, and thank you
for coming. Possibly you could introduce your officials to us
for the record.
Mr McNulty: I should think they
could manage that themselves.
Mr Burge: I am David Burge, Head
of the Police Finance Unit and I work to the Minister here.
Mr Regan: I am Paul Regan, also
in the Police Finance Unit.
Q52 Chairman: Minister, can I start
by asking you a question that we have just put, I hope reasonably
robustly, to ACPO and the APA. There has been clearly a big overall
fall in the level of crime over the past 10 years and there has
also more recently been a very big increase in police resources
out there in terms of police officers, police staff and PCSOs,
but, if we look at the recent data about the number of offences
brought to justice, the increase is almost entirely explained
by fixed penalty notices, cannabis cautions and increases in other
cautions for presumably more minor offences. There has not been
what we in the public might have expected, a significant increase
in the number of offences actually being brought to court, indicating
they are more serious. Have we really got real value for money
out of the resources that the Police Service just had over the
last four or five years?
Mr McNulty: I think we have, but
I take the nuance behind the question and I would just indicate
that it is a whole series of meetings around every aspect that
goes to make up what stands behind those figures in terms of,
as you say, the offences brought to justice, the use of fixed
penalty notices and penalty disorder notices back to the counting
rules that the police employed in terms of crime and including,
as a prelude to the CSR, a really fundamental review of the PSAs
and the overall target regime as well as, in a couple of weeks
I think, we will introduce a new crime strategy. I think both
the timing of this session and the advent of the new CSR does
afford us collectively across the policing family, if I can use
that term, a real opportunity to ask ourselves very strongly the
same question that you have just asked, and I think that is an
entirely fair question.
Q53 Chairman: So actually it is a
fair question to ask whether at the moment we are getting the
fullest value for money?
Mr McNulty: Well, I think it is,
not least in the wake of some eight to 10 years of, as you say,
continuous investment and growth, albeit from local and national
sources, I fully accept that, and the changing nature of the crime
profile, the changing use of summary justice, restorative justice
and the criminal justice system, so I think it is more than appropriate
now to take stock in approaching the CSR, but overall I would
say, I think, value for money certainly.
Q54 Mrs Dean: Minister, you mentioned
the use of local resources. The proportion of total police expenditure
funded by council tax has increased from 13% of gross revenue
expenditure in 1997-98 to 21.5% in 2006-07. Could you tell us
why the burden of police funding is falling increasingly and more
heavily on the local taxpayer?
Mr McNulty: Well, I think, to
be fair, the burden is not falling more heavily on local taxpayers.
The balance between what is raised locally and what comes from
the centre has shifted certainly, but still overwhelmingly much
of the money, quite rightly, comes from government, but I do accept
the figures roughly that you say, 13% to 26%, that sort of territory.
I think the more interesting point underlying that is that, if
you look at the 1996-97 figures, they were all, in numerical terms,
roughly the same, £50-odd a year, maybe some deviation of
£4 or £5 either way. More interesting to me is the disparity
in terms of police precept locally now, and I think the figures
range from £88 to some £230 in the Met, but equally
the disparity within that of contribution to overall budget, which
again ranges, I think, from something like 18% through to 46%.
I think the question that I want to ask without pre-empting an
answer necessarily is: this is essentially, central functions
aside, a universal service and of course there will be differences
from Suffolk to Devon and up to Northumbria, but essentially it
is a universal service, so why over the years, as there has been
an ebb and flow of national funding and local funding, but all
broadly in the right direction, to go back to your point about
investment, has that disparity occurred and is that something
which should continue or is that something we should look at?
I said at the police settlement debate that it really is an area
that we should look at. I am not clear myself in public policy
terms what would be an appropriate cut-off point for local contribution
versus national contribution, but I think that is a really interesting
debate.
Q55 Mrs Dean: The 5% cap on council
tax over the next year is a political commitment. Is it right
to risk under-funding vital local public services in order to
make a political win in that way?
Mr McNulty: I think the other
half of the question I have just given which prompts an answer
is: can you have that proper debate about the balance between
local and national funding in the curtilage of the overall funding
for policing without looking at the issue of capping? I think
that is a fair point which I know probably APA, ACPO and others
will have discussed with you. We have said that we remain committed
to 5% overall for council tax. To be perfectly fair to those on
the police precept side of that argument, much of the substantial
increase in council tax has come from the broader, general council
tax than the police precept side, but I take it as my role, and
this is not a public policy pronouncement—God knows, I would
not make that, not in these difficult and changing times—but
I think it is appropriate, when looking at finance, to look at
not overall council tax and capping, but to look at the issue
of the police precept and whether it remains appropriate for that
to be capped. We have in exceptional circumstances looked on a
case-by-case basis at the increases year on year. When they have
been over 5%, sometimes the criterion has been that, with less
than a 6% increase in budget, capping does not prevail. Unusually
in this last year there were any number that went fairly significantly,
and very significantly in one place, over budget, but the cases
were well met and I would happily defend each of those increases
from Durham's 34.9% down to Norfolk's 7% or so, and there is a
sufficient justifiable back-story, if you will, in each case.
So long as there is flexibility and an overall commitment to trying
to keep council tax levels down, I think the balance is about
right, but you are absolutely right, you cannot have that serious
debate about the finance of police and the balance between local
and national without including capping in the process.
Q56 Ms Buck: We have been hearing
from representatives of the police, as you know, this morning
and one of the issues that has been raised with us is the question
of the funding gap which arises from the CSR, and I just want
to ask you most straightforwardly: do you accept the contention
that there is a funding gap?
Mr McNulty: I accept the contention
that we are at least plateauing in resource terms rather than
constant growth as there has been for the last six, seven or eight
years because I have read the same submissions and actually I
broadly agree with the thrust of the Sustainable Policing
document, but I do not accept many of the presumptions and assumptions
made behind what is going to happen over the next couple of years
in terms of inflation, police pay and others that get to this
huge gap.
Q57 Ms Buck: Does that mean that
you do not recognise the figures that are put forward?
Mr McNulty: No, I recognise the
figures. Some of the presumptions in terms of the level of police
grant within the accepted or starting premise of the Home Office's
CSR settlement, some of the assumptions about pay, some of the
assumptions about inflation, some of the assumptions about efficiency
savings and natural growth in policing, I think, are entirely
fair, but they are not the figures I would throw into the equation
when speculating about the next couple of years.
Q58 Ms Buck: So the figure that you
will have seen is that funding is estimated at £656 million
in 2008-09 rising to £966 million. Now, are you saying that
you accept that cash figure as a shortfall?
Mr McNulty: No, I am saying I
do not because of all of that range of four or five different
assumptions that go into them which are actually perfectly fair,
they are not wild assumptions, but they are not the assumptions
that I would necessarily agree with. We have this perennial in
the public service where people suggest a service-based inflation
rate above and beyond CPI. Now, that is always going to be a point
of dispute between the Government and the policing family, but,
given that 80%-plus of those resources are used on pay and we
know roughly what pay may or may not be, I do not accept some
of the 5%-plus figures they put in for inflation. I know that
the Police Service has done a huge job in terms of gaining some
efficiencies over the last eight to 10 years, but I do not accept
the assumptions they make about that process slowing down and
I think there are still efficiencies and productivities that can
be made. They are very, very pessimistic, and I would not blame
them, on the settlement figure. They say it is more like, or closer
to, 3, 2.7 or 3, and that is a fair assumption, but not one which
I would absolutely accept as a given, and they make assumptions
about pay that I do not necessarily follow, although pay is a
huge issue, so I understand how they get there and, having understood
that, recognise the figures, but I do not accept the presumptions
and would say that there will be tight years ahead in terms of
the CSR settlement, and that is beyond doubt, but I think there
are ways across the whole piece that the policing family are dealing
with that.
Q59 Ms Buck: I think some of those
points will be probed by other people's questions, but one of
the other assumptions is that each £100 million shortfall
that may arise equates to between 2,000 and 3,000 jobs and I think
we would probably all agree that, with 80% of the budget being
accounted for by staff costs, it does imply that, whatever that
shortfall may be, it is likely to have an impact on staffing costs.
Would you accept that estimate of 2,000 to 3,000 jobs with a £100
million shortfall?
Mr McNulty: Well, we could argue
that, but, for the sake of debate, I think that is a reasonable
assumption to make. We can argue around the edges of it, but,
as you say, given that 80%-plus is police staff, police officers,
PCSOs, then of course, if there are not quite the efficiencies
or the settlement figures go wrong or pay comes in at an unaffordable
level and, therefore, the gap increases, then clearly bodies of
individuals is one key area that they have to look at, but it
is my job to try and make sure that the assumptions I have in
my head prevail rather than the ones fairly arrived at which they
put in their pessimistic view.
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