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When the Minister replies, will he give me one simple bit of information? The division introducing unwanted new local authorities has been imposed by the Department on the basis that it will not only improve
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the facilities but will be much cheaper and more efficient, and will roll us forward to a fantastically bright future. Cheshire county council made a freedom of information request to ask why there was a direct and clear difference between the figures originally given to the county council by the Department and those that were published subsequently: why was no FOI request accepted?

If the report asked for by Paul Rowsell, to get an independent assessment by the Institute of Public Finance of the costs of reorganisation, was so strongly supportive of the Department’s attitude, why are we not allowed to read it? If someone had said what a good job I had done, I would have thought that it might be a good idea to make that public. Indeed, I might seek to give it to everybody who inquired—but somehow or other, we are told, that is not the case.

The draft Cheshire (Structural Changes) Order was laid before Parliament on 31 October, and will create two new authorities with, we were told, annual savings of £16 million and transitional costs of £25 million. Those numbers cannot be recognised from the original proposal to create two new authorities, which said that the ongoing savings would be £30 million with transitional costs of £16.6 million. In effect, the Government are saying that they do not accept the district figures. To put it another way, the headline transitional costs have increased by 50 per cent., the headline savings have reduced by 50 per cent. and the payback period has doubled to almost four years.

Before the Department takes even more money away from Cheshire ratepayers and before it is prepared to accept that we will lose 80 officers on the front line, whatever its decisions are, it should think seriously about how it intends to justify those policies. It may find that rather more difficult than it seems to anticipate.

5.40 pm

Chris Huhne (Eastleigh) (LD): I am delighted, as always, to follow the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), who spoke a great deal of sense, drawing on the experience of Cheshire. She anticipated some of my remarks. I note that in a recent MORI opinion poll conducted in that county, 87 per cent. of people said that they were willing to pay more for the police. However, there are substantial difficulties in doing that, given the nature of the settlement and the capping of the council tax. If we consider the difficulties that the police in Cheshire have faced in several high-profile recent cases, such as that of the terrible murder of Garry Newlove, we can sympathise with the hon. Lady’s remarks.

I agree with the attack that the hon. Member for Bury St. Edmunds (Mr. Ruffley) made on the Government. Clearly, there is serious concern among the public about crime. There is excessive violent crime, which has doubled since the Government came to power. The deterrent effect is, crucially, composed of not merely the severity of the penalty but the likelihood of detection. That is why the police service is so crucial in the fight against crime, and why the dangers of demoralising it seem considerable in the wake of the decision to phase the police pay settlement.

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Several observers have pointed out that we are considering the tightest police grant settlement for a decade, at 2.7 per cent. As the Association of Police Authorities and the Association of Chief Police Officers pointed out in their joint budget exercise, even if full use is made of the leeway allowed on council tax, there is a danger of a shortfall of £1 billion by 2011.

The stress points are already clear. They appear, first, in the Government’s announcement. The flatness of the settlements to so many police authorities tells us that the sum that the Government can use to make genuine progress in closing the gap for individual police authorities with their needs-based formula is limited. Several hon. Members have outlined the problems that are likely to arise from that. Nearly half the police authorities will effectively get the floor increase, which is evidence that there is not enough money in the settlement to make genuine progress towards closing the gap in authorities such as Avon and Somerset, and Cheshire.

Tom Brake (Carshalton and Wallington) (LD): Does my hon. Friend agree that because the budgets are so tight, if something external to the police, such as, for example, the closure of the local magistrates court—in my area, that would be Sutton magistrates court—occurred, the knock-on effect of the additional police time taken to go elsewhere would mean that the police could not cope with such external events, over which they have no control?

Chris Huhne: My hon. Friend makes a good point about one of the pressures on the budgets.

Another example of stress appears in the figures. External provision for the police amounted to 85 per cent. of gross revenue expenditure in 1996-97, but is now projected to be down to 61 per cent. That represents an extraordinary drop and an extraordinary increase in the amount of funding expected from the council tax payer, particularly when one bears in mind what an incredibly rotten tax the council tax is, how regressive it is and how unfortunate a burden it imposes on those who are least able to pay, and whose households are under considerable financial stress.

There is also clear evidence of stress in the Home Office’s handling of its own budget over the past year, such as the sudden announcement in the middle of the year that the previously agreed level of funding for police community support officers would be cut. All those factors combine with the pressures from pay and general inflation to bear down on a budget that will clearly be inadequate for the demands put on it in the year ahead.

We know that about 80 per cent. of police costs are staff related. If we are looking, as the Government are, for a more than 9 per cent. efficiency gain, all of which is meant to be turned into cash over the three years of the comprehensive spending review, it seems likely that we will be looking at job losses. It would be honest of the Minister to give us any projections that the Home Office has made of the likely sacrifice, in terms of both the police and their support staff, if the efficiency gains are insisted upon, given the extraordinary proportion of staff costs.

What is the way out? Clearly efficiency is one way.

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Mr. Hogg: I entirely agree that efficiency is one of the ways forward, but the hon. Gentleman should also keep in mind the fact that any staff wastage or loss will almost certainly be associated with redundancy payments. That, too, bears down on the police budget.

Chris Huhne: The right hon. and learned Gentleman makes a good point. In the police service, although less so in the service staff, the capacity to lose people through natural wastage, as the unfortunate euphemism goes, is extremely limited. We might well be looking at redundancy payments, therefore, which would further increase the pressures on already stretched budgets.

IT has a cost, too. The introduction of IT is devoutly to be wished—I am sure that nobody in the House wants the police to be involved in any unnecessary avoidable paperwork. The capacity of IT to reduce that paperwork is important, but that comes at a cost, particularly given the Government’s track record on IT projects and overruns. Another important element, which we are beginning to see in the Metropolitan police area, is the provision of figures at a low local level—at ward level, rather than at basic command unit level. That will allow us to burrow into truly effective local command units and spread best practice, and that has to be good, too.

David Taylor (North-West Leicestershire) (Lab/Co-op): The hon. Gentleman talks about IT project failures, which have been legion over 20 years or more, but we are not really talking about the type of project with the capacity to improve data collection in the police service and thereby reduce forms; rather, we are talking about the introduction of hand-held computer devices and things of that kind. That is not the type of project that has typically caused such angst, overruns or excessive costs. Does he recognise and accept that?

Chris Huhne: I certainly hope that the hon. Gentleman is right to think that there will perhaps be fewer overruns on such a project. However, I do not share his confidence, having tabled a number of written questions to different Departments a few years ago, when there were overruns with IT projects almost regardless of the type, and particularly with networked IT projects. Although the proposal is for hand-held devices, they still have to be connected to a network, the software has to be compatible and a large number of external consultants have to be paid. For some reason, there seems to be a serious problem with the ability of the Government—not just this Government; the hon. Gentleman was right to point out that this has been a long-standing problem—to handle IT projects and bring them in on time and to budget.

Tom Brake: Does my hon. Friend agree that when budgets are tight, even if the IT projects are successful there is a risk that the training budget associated with training people to use the IT systems will be cut, so that officers often cannot make effective use of them? That point was put to me by a police officer on the march a few days ago.

Chris Huhne: My hon. Friend makes a good point; I am happy to agree with him.

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It is also crucial that the Government begin to think about the big picture with regard to improving police efficiency. One way of doing that would be to reduce the demands imposed on the police by an entirely legislation-happy Home Office. Since 1997 it has introduced 3,400 new criminal offences for which the police are expected to bring prosecutions. That is extraordinary, because the vast bulk of the crimes that our people are concerned about are those that have been an offence in this country for as long as anyone in this House has been alive, and probably a good deal longer. Simplifying the legislation and reducing the demands on the police are thoroughly desirable objectives, about which we have not yet heard enough from the Government.

The House will not be surprised to hear that we believe that savings could be made on the Government’s identity cards project. Those savings should instead be put into visible front-line policing to reassure our communities. We now know from the safer neighbourhood teams in London that that is a successful way of reducing crime.

We believe that the settlement is eye-wateringly tight, and that it will lead many police authorities and police forces into making wholly unacceptable decisions on job cuts, such as those described by the hon. Member for Crewe and Nantwich. I understand that the Cheshire constabulary has already reduced its head count in the past year. For precisely those reasons, we shall protest against the settlement in the only way we can—by voting against it. We shall do so not because we think that it is not providing enough money, but because we think that the police deserve more.

5.52 pm

Mr. Douglas Hogg (Sleaford and North Hykeham) (Con): I should like to begin by offering the House an apology, because what I am going to say will be of particular interest to the people of Lincolnshire and of perhaps rather less interest to other right hon. and hon. Members. In that respect, I shall be following the hon. Member for Crewe and Nantwich (Mrs. Dunwoody). An excuse—if we need one—is that this is one of the few occasions on which we can articulate on the Floor of the House the problems that face our own police forces. So I apologise to the House, but I am going to speak primarily about the difficulties being faced in Lincolnshire.

I acknowledge that the Minister for Security, Counter-Terrorism, Crime and Policing has been good enough to see me on at least one occasion to discuss the problems of Lincolnshire. I also know that he is seeing the chairman of the Lincolnshire police authority on 7 February, and I think that the chief constable is going to be there at the same time. He has also seen members of the police authority on previous occasions, as have his officials. He will be aware that the Lincolnshire police have produced a financial recovery report, which they submitted to the Home Office last year, and I am sure that it has been the subject of considerable study in his Department. I therefore acknowledge that he has considered—although perhaps not addressed—the problems that Lincolnshire faces.

I should like briefly to summarise the issues that the Lincolnshire force is facing. First, it has the lowest funding of any force in England and Wales. The next
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lowest funded force gets £11 million more. Secondly, as I said in an intervention on my hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley), the police authorities are under a statutory duty to produce a balanced budget. They do not have the legal right to operate at a deficit. That is important, because, unlike most authorities, they have to adjust their spending to reflect their revenue stream. They cannot resort to borrowing; they have to bring about economies.

In the absence of additional funding for the Lincolnshire force, there will be a deficit of £7 million in 2008, of £12 million in 2009 and of £14 million in 2010. Such figures would not be huge in the context of the metropolitan forces, but they are very considerable in the context of the Lincolnshire force. The hon. Member for Eastleigh (Chris Huhne) fairly pointed out that about 80 per cent. of the costs incurred by police authorities were staffing costs. In the case of Lincolnshire, the figure is nearer to 85 per cent., and if we want to bring about a reduction in costs, we inevitably have to look at staffing levels.

There are only two groups of people in a police force: the police officers and the civilian staff. Police officers are Crown servants, and cannot be made redundant. The force can be reduced through wastage or by voluntary resignation, but not by sacking. Consequently, if staffing levels are to be reduced, the non-police-officer content has to be considered. That has at least two consequences. First, there will be heavy redundancy costs which will have to be incorporated into the spending plan in any budget. Secondly, any cuts in the civilian staff will result in many of those posts being filled by police officers who could otherwise be out on duty. I am not for a moment saying that we cannot bring about efficiencies through a reduction in staff. That might be possible, and the use of information technology is a way forward. We must bear in mind, however, that there are immediate and serious funding problems associated with such decisions and that, in any event, many of the holes would have to be plugged by serving officers.

Mr. Heath: The right hon. and learned Gentleman should make no apology for talking about Lincolnshire. That is what these debates are for. Will he address another significant funding issue? He has concentrated on the question of revenue expenditure, but there is an equal—if not even more worrying—squeeze on capital expenditure, which will prevent forces from taking the very steps towards improved efficiency that could mitigate the effects of a tight revenue budget.

Mr. Hogg: The hon. Gentleman is right. Such measures would, for example, constrain the ability of any police force to introduce new IT provision, because that comes largely out of capital expenditure. Alternatively, a force might find that it had to cut back on its building programme. The hon. Gentleman is quite right to raise that serious issue.

I should like to put a bit of flesh on the generalities that I have outlined. If we wished to achieve the savings in Lincolnshire that will be required in 2010-11, we would have to find a saving of more than 200 officers.
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In fact—if I can read my writing—the figure would be 275, which is one quarter of the total force. Alternatively, if we were to concentrate exclusively on civilian employees, their number would have to be reduced in that year by 364. Those are substantial numbers.

I want to turn now to the grant itself. I am sorry that the Minister for Security, Counter-Terrorism, Crime and Policing is no longer in his place, although I appreciate that it is not possible to be here at all times. On the face of it, the grant of 3.1 per cent. to the Lincolnshire force is not out of line with the grants that have been made to other forces. It suffers from two problems, however. First, it ignores the fact that the Lincolnshire force is the lowest funded force in England and Wales by at least £11 million, as I have already mentioned. Secondly, it ignores another critical point, which is that, in 2007-08, there was a special one-off £3.4 million grant. If that is taken into account as it should be, we see not an increase of 3.1 per cent. but a decrease of 1.9 per cent., or £1.37 million—and those are all significant figures.

Let me next address the question of what can be done about the problem, given the realities of life. There are only three sources of finance available to the police service. One is central Government funding through the grant; the second is special one-off grants; and the third is the precept. I shall speak briefly on each of those sources.

On the formula that produces the annual grant, ever since I have been a Member of Parliament, from 1979, rural forces have faced particular problems because of their sparsity—and in forces such as Lincolnshire, there is a particular and perverse difficulty. We are very sparsely populated as a county, but there are no large spaces of emptiness. In North Yorkshire or Cumbria, for example, there are large areas of emptiness, where there is nobody around—and very nice it is too, I might add—but in Lincolnshire that is not the case. It is a very large county, but all of it is populated. There are small settlements, separated by a few miles, which may well be true of other constituencies. That makes for a special problem when it comes to policing, but that particular problem associated with sparsity is not taken into account at all in the formula. I would like to see the formula looked into again in that light. I have been calling for that for nearly 30 years, but it has not been a successful call, so I am not unduly optimistic now. On behalf of forces such as Lincolnshire, I say that it is imperative that the formula be looked at again. One has to ask whether that is going to happen in the next two weeks, and the answer is obviously no.

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