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I wonder whether anyone present—with the possible exception of one or two Home Office civil servants—has any idea how the police grant formula works. It is based on a projected population multiplied by the result of the police basic amount plus police crime
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top-ups 1 to 7, plus police incidents top-up, plus police fear of crime top-up, plus police traffic top-up, plus police sparsity top-up.

It is also revealing to examine the detail of what makes up the formulae. If a resident of Surrey sees that “single parent households” and “student housing” each appear under three different top-ups and that, to cap it all, under police crime top-up 7 a negative factor is applied for people identified as “wealthy achievers”, they might then begin to get the general idea that all the formulae will take money and funding away from the county of Surrey. That has, indeed, been the case. One need only examine what has happened in respect of funding per head of population in Surrey since 1997-98 and the introduction of all the formulae and their consequences: the amount of money that Surrey has received from central Government has bumped along the bottom of the floor set by the Government. Indeed, the formulae were set in such a way that if there had not been a floor, I rather wonder whether Surrey would be getting any money at all from the Home Office.

The formulae are entirely impenetrable to outsiders; it is impossible for them to find out what they mean in fact. What they mean for Surrey is that it has received no extra money in cash terms in Home Office police grant per head of population since 1997. In saying that, I might be guilty of misleading the House because the truth is that in 1997-98 the Home Office grant per head of population for Surrey was £57.80, whereas this year it has risen to the princely sum of £58.33, so it has in fact gone up by 53p per head in cash terms during the 10 years of this Government. Meanwhile, however, in order to deliver policing in Surrey, the council tax per head of population that goes to support the police has increased from £19.51 to £77.15.

The Minister has said that the proportion of Surrey’s police funding coming from the council tax payer is approaching half, but national non-domestic rates are also raised in Surrey. Only 40 per cent. of the national non-domestic rates raised in Surrey are then spent in Surrey, and that is scored as national expenditure for the purposes of the Minister’s definition of national, as opposed to local, expenditure on the police. If one scored the national non-domestic rates raised in Surrey as local expenditure, about 64 per cent. of funding for the police in Surrey would be coming from Surrey taxpayers in one form or another.

Surrey’s position is extreme, and to see that, one has only to look at the different sets of formulae that were introduced in this House in 2005, all of which acted in precisely the same way to ensure that Surrey’s expenditure was sustained only by the floor that the Government have put in place. I am afraid that the conclusion that my constituents and I are entitled to reach was summed up by the sedentary intervention by the hon. Member for Carlisle (Mr. Martlew). When Surrey’s expenditure was mentioned he said, “They can afford it.” Some £5.4 billion-worth—or, by other accounts, £5.9 billion-worth—is being exported from the county to be spent elsewhere in the country, and there comes a limit. That limit has been reached.

As an aside, I shall examine the interesting additional rule 1 to be applied by the Home Secretary. I wonder why something similar to what applies in Wales does not appear to apply in England. The rule states:

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which includes the capital of Wales—

Instead of being given to the police authorities in England and Wales, that money is simply redistributed among the Dyfed-Powys, Gwent and North Wales police authorities. If additional rule 1 is good enough for Wales and allows some adjustment to be made for over-expenditure in Wales’s highly populated area to ensure that the policing challenges of its more rural areas can be addressed, why cannot something similar be done for England? Why cannot something similar be contemplated for Surrey, given the crisis that is overtaking Surrey police authority?

The Minister will be well aware that I use terms such as “crisis” advisedly. Surrey’s police force has been in the top end of all the performance indicators over the past 10 years, and it has supplied other areas with some distinguished police officers, Denis O’Connor and Ian Blair to name but two. I have accompanied both of them, and the chairman of the police authority, on delegations of Surrey Members of Parliament to previous Policing Ministers to point out that what was happening in Surrey was going to be unsustainable, yet year in, year out Surrey has sought, through imaginative policing and restructuring solutions, to stem the tide of its enormously difficult financial position. Above all, Surrey council tax payers have ridden to the rescue to ensure some form of sustainable policing in Surrey.

We now face the extremely difficult consequences of this settlement. On 23 January, Surrey’s chief constable wrote to the Minister, saying:

Behind these formulae lies a basic absurdity in how the conclusion about how much money should go to Surrey is reached. The absurdity is that even if one accepts that the formulae are arrived at reasonably and are a reasonable assessment, they take no account of Surrey’s location.

If Surrey were moved bodily to the middle of Wales, which is a much lower crime area that has no major crime centres around it, Surrey would receive exactly the same amount of money under the formulae. As we have heard, 59 per cent. of serious organised crime in Surrey comes from outside it. I cannot better the chief constable’s remarks about this. He says:

All that should be more than familiar to the Minister, and, as my hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley) was good enough to make clear, it comes from a police force that has performed at the top end of everybody’s expectations in terms of its administrative efficiency.

On 11 February, the Surrey police authority will have to set the force’s budget, and this grant formula puts it in an impossible position. I understand that it cannot
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meet the Home Office’s requirements on targets and performance within the current budget without busting through the capping limit. I understand that the proposals that will be made to the Surrey police authority on Wednesday for its decision on 11 February will become public. The chief constable has asked the Minister for feedback and urgent discussions on the prospects for a solution. The chief constable’s solution is a special grant of £54 million over three years, which would serve only to give Surrey the average funding of other forces around London.

The Minister’s opening remarks directly acknowledged the fact that Surrey faces a particular problem, and he must take these concerns seriously. If he does not intervene, I would be astonished if the Surrey police authority is able to set a precept that does not smash straight through the capping limits. If the police authority proposes something above 5 per cent. I would expect him to cap it, but I must tell him that he would then have to meet the chief constable, the chairman of the police authority and hon. Members who represent Surrey constituencies to explain how he will address the problem centrally. Without a shadow of doubt, Surrey has a completely solid case, given the consequences of how the funding formulae have rolled out over the past 10 years.

6.38 pm

Mr. Brian Binley (Northampton, South) (Con): May I thank the Minister most sincerely at the start of my contribution—before he quickly leaves—for two reasons? First, I thank him for meeting representatives from across Northamptonshire’s policing body. They were most grateful that he saw them, and I hope that he will have words for me tonight that show that the meeting was worth while.

Secondly, I wish to thank the Minister for his opening remarks on the issue of sustainable community areas. He said that he was cognisant of the fact that the tardiness of the grant for those areas was a real problem. I do not want to talk about the east midlands, because that region has already been well covered by my hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley) and my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg). However, I make no excuse for speaking in detail about my own county of Northamptonshire and the impact on my constituency.

The Minister will know the arguments, and I know that if he were in my position his arguments would be just as robust and strong as I intend to make mine tonight. I hope that from that perspective he will understand why I am raising the issue and that he will agree with me and go away and do something about it. He is the sort of man whom I would expect to think in those terms, so I am hopeful.

The reason for making the case for Northamptonshire is simple. Northamptonshire police will receive an increase in formula funding of 2.5 per cent. The Minister knows that figure, but when it is added to the special grant funding—and we have to look at the whole of police funding—Northamptonshire will receive an increase this year of 1.4 per cent. That is less than this Government’s tardy recommendation for police pay. How can we add the figures up for Northamptonshire? The Minister
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knows, I know and my electorate know that they simply do not add up. That is why I make this appeal to the Minister.

The right hon. Gentleman mentioned the sustainable communities programme, and Northampton and the county around it have some of the fastest population growth rates in the country. That leads to some serious problems. The county faces two double whammies. First, it has a real problem with formula funding, which Ministers recognise, because they tried to introduce a new formula for police funding. While that helped Northamptonshire, it did not help some of the areas to which the Government are friendlier, and it will not do anything to improve our present position as the second lowest funded council in the country. The second aspect of that double whammy, which adds woe upon woe for the people, is that the Office for National Statistics has said—as the Government recognise—that there will be no growth in Northampton between 2001 and 2008, even though we are a sustainable communities growth area. That latter point is the first aspect of the second double whammy, and the second is that the area has one of the largest eastern European immigrant populations in the country. Northampton alone has had 10,600 immigrants from eastern Europe register for national insurance numbers in the past three years. That is the second highest in the country.

I hope that I do not need to tell the Minister that Northamptonshire is a part of the Milton Keynes-south midlands growth area. The Government want us to have a 50 per cent. population increase, with 167,000 new houses to be built across the county by 2031, with most of them being built in the early years of that period. Indeed, planning applications for 45,000 houses are already in play, which will mean an increase in population of at least 100,000. And the police have had a 1.4 per cent. increase.

Mr. John Hayes (South Holland and The Deepings (Con): My hon. Friend makes a robust case for Northamptonshire, but Lincolnshire people look on that county with envy. We are the worst funded authority, as my hon. Friend will know. Does he agree that Northamptonshire and Lincolnshire share a dilemma with Surrey? Because of the gap created by lack of funding, we must raise the precept, but we cannot raise it beyond the cap. Is not that an impossible situation for police authorities, as the Minister must know?

Mr. Binley: I am most grateful for your intervention and I welcome its robustness—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I have to make the point again to the hon. Gentleman who, despite some experience in this House, continues to fall into that little technical trap.

Mr. Binley: I am grateful for that guidance, Mr. Deputy Speaker. I learnt my bad habits as a local councillor and I apologise.

My hon. Friend underlines the point that both the east midlands and Surrey suffer as a result of formula funding, and that puts them in an impossible position. My hon. Friend will also know that when the Government’s growth agenda is added on top of that,
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the position becomes even more impossible—if that makes any sense at all. I see heads wagging, but it is true. We need to find 1,100 additional hospital beds, 20 new upper schools and 60 new primary schools, to say nothing of leisure and sports facilities, doctors’ surgeries, area health clinics, water, sewerage and the police to police the county.

I pay tribute to Peter Maddison, the chief constable, for the work that he has done. The county’s policing is improving, and the Minister will know that. We have done our bit, but we do not have the money to do the job that he wants us to do.

Mr. Ruffley: Does my hon. Friend agree that it would be sensible for the Opposition to vote against the motion on the grounds that the formula is not being applied fairly, and the dispositions and allocations in the report are inadequate?

Mr. Binley: I would be delighted if we were to proceed in that way, and that gives me a little hope— [ Interruption. ] It gives me hope, I can tell the Minister, because my party is obviously thinking in the right way.

I have already said that my area has the largest number of immigrants from eastern Europe, but we also have one of the largest Somali immigrant communities—to say nothing of other communities. The consequences, for policing in Northamptonshire, include an interpretation budget that has increased from £53,800 in 2004-05 to £237,000 this year, an increase of 450 per cent. in four years. That has not been taken into account by the Minister—at least, not to date. I am hopeful that he might change his mind.

The number of non-British people arrested last year increased by 4.1 per cent. It might be argued that that is a comment on the well-being of the immigrant community in Northamptonshire, and I am willing to accept that, but the rise was still well above inflation and above the money that the police are paid to deal with it.

The number of hate crimes has risen by 10.1 per cent., which suggests the problems that are beginning to emerge in the area, which we need to note. I am fearful that the 1.4 per cent. in total increased funding will not allow us to deal with that issue in the way that we would wish.

The Local Government Association has been especially supportive of Northamptonshire’s case. In a submission to the House of Lords Economic Affairs Committee inquiry into the economic impact of immigration, the LGA pointed out that a substantial number of migrants have gone to towns such as Northampton that have little experience of receiving international migrants. It is much more costly when those involved are on a steep learning curve, and that is exactly where we are. That is a real concern.

I do not need to tell the Minister that traffic has increased by 20 per cent. in recent years in Northamptonshire—the fastest rate of increase of any town in the country. That underlines the growth of immigration into the county and of the sustainable communities programme that I have already mentioned. When I tell the House that the chief constable talked about reducing the number of operational police officers by up to 400 over the next three years, Members will realise the difficulties we face.

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Mr. Hayes: My hon. Friend makes his case with the eloquence of Pericles and the strength of Hercules. Will he acknowledge that inasmuch as the formula is insensitive to local details and unresponsive to change it particularly disadvantages rural counties? They are changing, in some of the ways that he describes, not just in Northamptonshire but in Lincolnshire and elsewhere.

Mr. Binley: I thank my hon. Friend for that intervention and I completely accept his comments. He gives me the opportunity to point out that on top of the growth in sustainable communities we face the general trend he describes, which adds to our difficulties.

The Minister will know that we have tried to bring our case to the attention of the Government. I have already thanked him for meeting colleagues from Northamptonshire. We also met the Minister for Local Government. In November, I questioned the Home Secretary about underfunding and was delighted when she told me that I had made

I was also delighted when she went on to say that she would

You can understand, Mr. Deputy Speaker, how my hopes rose, but when the grants were announced what a tragedy for me to find that those were empty words and empty gestures. I am hoping against hope that the Minister can put things right this evening.

As I said, Northamptonshire police received a total grant increase of 1.4 per cent. when formula funding and the special grant are added together. We have to do that, because community policing is part of the special grant provision. We cannot leave out that element and say that it does not matter. Of course it matters, especially in a county such as Northamptonshire.

The truth of the matter is that the people of Northamptonshire increasingly believe that the Government are letting them down. Equally, and of more concern, the police in Northamptonshire believe that the Government are letting them down. I wonder whether the Minister will be honest with me— [ Interruption. ] I am sure he will. There is a way out of the problem; the Minister could work with his colleagues in the sustainable communities programme and tell them that there is a special special reason for doing something about my county, because 167,000 houses are being dumped—I use that word carefully—on the county in a very short time indeed. We are taking more than our fair share.

I hope that when the Minister sums up the debate, he will tell us that he will talk to his Government colleagues who are responsible for the sustainable communities project to try to find ways of easing out extra money to ensure that Northamptonshire policing can benefit, because we face such a massive growth agenda. However, if that is not possible, the very least the Minister can do for me and the people of Northamptonshire is to tell us why funding has been so restricted. Why have we had such a bad settlement this
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year? If the Minister is honest he will tell us the truth—that when his colleague the Prime Minister was Chancellor of the Exchequer he made hay while the sun shone to such an extent that we now face massive financial problems, and that much as the Minister would like to do what I ask he is unable to do so, because the former Chancellor acted to the detriment of the people I represent.

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