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Mr. Coaker: I am grateful to the hon. Lady for her comments. In this debate, I have tried to avoid saying—apart from in my opening remarks—that police numbers have gone up and crime has gone down, because although that is true in Dorset, as there are more officers, community support officers and staff, and crime has fallen, it is also true of every constituency. Notwithstanding that, there are issues with how the funding formula works. I have tried hard, together with the Home Secretary and colleagues from the Department for Communities and Local Government, to ensure that this financial settlement provides stability in difficult times. The vast majority of responses—we had far fewer this year—asked us to
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ensure that we implement the funding amounts that we said would be introduced in 2009-10 to provide that stability. After 2010-11, we will enter the new comprehensive spending review period, and that is when we can try to address some of the concerns about the funding formula.

The hon. Lady has raised some of the issues with the formula, and other hon. Members have raised others. My right hon. Friend the Member for Leicester, East (Keith Vaz) raised issues that affect Leicestershire and the east midlands. All those matters require discussion and review, and we have to try to find a way forward. People come at the issue from the point of view of their area—rightly, because they represent that area. But as the Minister, I have to see the issue from a national perspective. We are trying to be fair to police forces in every area, and the fairest way to achieve that is to provide the stability that is achieved in this settlement.

Simon Hughes: The Minister makes a fair point about the need for balance in the national allocation. He knows that part of the allocation is based on the number of people coming into an area, and part of it on the number of residents. Can he assure us that the Department will take into account the underscoring of the population in areas where the Office for National Statistics figures for resident population are significantly behind the real numbers? London is an obvious case. There are far more migrants coming to London than the figures for the resident population suggest.

Mr. Coaker: Population is one of the factors that are taken into account, and the exact measurement of population is an area of controversy, and something that needs to be taken into account. [Interruption.] I am reminded that I gave way to the hon. Gentleman earlier, so he has had two bites at the cherry.

Migrant numbers do have an impact on costs, and that is why the Government have set up a fund, available from April 2009, to help local services with those costs, such as translators. That money will be made available to Government offices, including the Government office for London.

Growing numbers of specialist police staff are taking on roles as scene of crime officers, fingerprint analysts and intelligence officers. Additional police staff are also increasingly taking on the routine elements of case file preparation, prisoner supervision and station inquiries, freeing police officers from administrative work. Although overall numbers are important, it is crucial to make the best use of officer and staff time so that those people are in the right place at the right time to deliver for the public. Getting the best possible work force mix of officers and staff will also help to ensure that the most responsive possible service is provided.

Operational police officers are spending more of their time on front-line duties. Overall crime is falling or stable. The overall level of crime recorded by the police in July to September 2008 fell by 3 per cent. compared with the same quarter in 2007. Within that overall figure, violence against the person fell by 6 per cent. and firearm offences fell by 29 per cent. The British crime survey figures published on 22 January 2009 show that, according to interviews, in the year to September 2008 the overall level of crime is stable compared with that in the previous year. So is the risk of being a victim, which remains at a historically low level.

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Levels of violent crime, domestic burglary and vandalism were also stable compared with the previous year, and vehicle-related thefts fell by 10 per cent. In the 12 months to September 2008, there was a statistically significant decrease in the proportion of adults with a high level of worry about violent crime.

May I place on record my thanks to the police service of this country, which has responded well to the many and various demands placed on it? New challenges continue to arrive and we must ensure that the service is in the best possible shape to meet them. That includes not just funding but getting the best possible service from the police.

The policing Green Paper “From the neighbourhood to the national” represented a radical new deal for the service, freeing it up to focus on tackling local issues in each neighbourhood and to respond to the challenges of serious organised crime and terrorism. We announced that we would scrap all top-down targets for forces, with the exception of one—local confidence. We have done that.

The Green Paper declared that we would create a new model of police accountability, with a stronger role for police authorities and Her Majesty’s inspectorate of constabulary. We are doing that. It highlighted the work that we are doing, not least through Operation Quest, to maximise the efficiency and productivity of the service. It said that we would invest in the police leaders of tomorrow, which we are doing through a new senior appointments process and a national police leadership college. All that combined means that the service can be more flexible in meeting the challenges of 21st-century policing.

We remain absolutely committed to neighbourhood policing as the bedrock of local policing in the 21st century. We are building a more responsive, locally accountable and citizen-focused police service through a programme to transform policing at a local level to meet the needs of the communities. The current phase of work is to ensure that neighbourhood policing is embedded into core policing activity and that teams increase their focus on working with local communities to identify and tackle local problems together while continuing to provide high-visibility policing, and reducing antisocial behaviour and the fear of crime.

HMIC has today published “Get Smart—Planning to Protect”, which is its report, commissioned by the Government last year, on the planning that forces undertake to deliver protective services. These are particularly significant areas of policing, such as major and organised crime, critical incidents, and domestic and child abuse. HMIC has identified variations across forces in the quality of service planning, and I am committed to seeing improvement made. The National Policing Improvement Agency is working to deliver a comprehensive programme to help develop and support forces in their protective service planning. Police authorities will also be inspected for the first time in 2009 and we will ensure that necessary improvements are made in this area. Legislation is in hand to strengthen collaboration and to ensure that it continues to be a key means of improving protective services.

Total Government revenue spending for police authorities in 2009-10 will be £9,482 million—an overall increase of 2.8 per cent. on 2008-09. Of that general provision, £8,281 million is for police general grants, which will
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increase by 2.7 per cent. In addition, £1,201 million is for specific grant funding, which I shall come back to later. We have kept ring-fenced funding to a minimum to allow maximum local discretion over how to allocate and spend resources.

The police grant report for 2009-10 deals with Home Office general police grants for revenue expenditure. The amounts payable to individual police authorities are listed in the report that I have presented to the House. Additionally, police authorities in England and Wales receive revenue support grants from local authorities. Overall, general grant allocations to police authorities were set out in my written ministerial statement of 21 January. Within the general grant provision for 2009-10, we have set a funding floor of 2.5 per cent. That means that each police authority in England and Wales is guaranteed an increase of at least that level.

We have provided a settlement that encompasses more than a degree of stability for all police authorities while at the same time acknowledging that there are areas with greater relative needs. There will be increases of up to 3.9 per cent. in the west midlands. There will always be a dispute over how far the needs-based funding formula should be allowed to prevail over the stability provided by the grant floor. My right hon. Friend the Home Secretary and I have tried to strike a sensible balance in the settlement and will continue to do so in the future.

There has been no change to the rule 2 grants, which were mentioned by the hon. Member for Montgomeryshire. They are former specific grants, now allocated with the general grants, that total £208 million. Police authorities have complete flexibility on how best to use that resource. Before the comprehensive spending review, we consulted on whether to put the funding back into the formula funding pot, but that could have had a major impact on grant distribution and we decided, on balance, to retain the status quo. That move was widely welcomed by many police authorities, particularly smaller ones that had come to rely on rule 2 funds, such as the rural police fund, as core funding. The position and implications will be reviewed in full before we make any further changes to the special formula grant.

Let me turn to some more specific elements within the funding settlement for 2009-10. We have retained the crime fighting fund in its present form. That fund of £277 million played an important part in supporting growth in police capacity between 2000 and 2004. However, since its introduction the story has moved on, with the employment of more police staff to replace officers in roles where constable powers are not needed and the engagement of police community support officers, who play an important role alongside police officers. The strictures imposed by the CFF’s system of financial penalties had, by 2006, limited the flexibility of forces to engage the right people with the right skills in the right jobs. The Government therefore suspended the CFF criteria in December 2006, allowing local chief officers and chairs to develop the optimum work force mix without losing funding. The move ensured that decisions on the mix of police staff and officers lay where they should, with the chief constable. That was welcomed by the Association of Police Authorities and the Association of Chief Police Officers.

There is clear evidence that a good number of forces are using their CFF freedom to release police officers for the front line, replacing police officers in back-office
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functions with police staff when there is a clear business case that it is right to do so. In some forces, officer numbers are fewer than they were in March 2008, but the essential point is that the replacement of police officers in back-office functions has not had a negative impact on front-line capacity. In a good number of cases, it has increased front-line capacity. The most recent figures show that some forces have increased police officer numbers while others have decreased them.

From 2002 until March 2008, we invested more than £700 million in introducing PCSOs and neighbourhood policing. Home Office funding for neighbourhood policing, including PCSOs, in 2008-09 is £324 million, an increase of 2.7 per cent. For 2009-10, funding has increased by a further 2.7 per cent. for each force to a total of £332 million. A further uplift of 2.7 per cent. is planned for 2010-11.

The basic command unit fund was introduced in 2003-04 for a two-year period that has subsequently been extended. The BCU fund will be £40 million in 2009-10, the same level as in 2008-09.

For several years, the Home Secretary has provided additional funding to ensure that Welsh police authorities receive at least a minimum increase in grant in line with English authorities. For 2009-10, we have again adjusted the Home Office police grant for Welsh police authorities to maintain consistency with England. That additional support will total £15.5 million next year.

We have received 15 representations on the funding settlement from 14 police authority areas. That is considerably fewer than in previous years, and most of the representations have to do with the future. For next year, we have again maximised the increase in general grant and ensured that all police authorities have received a guaranteed minimum increase in grant of 2.5 per cent. The delivery of efficiency and productivity gains, as well as prudent budgeting and making full use of available funding flexibilities, means that there is no reason for excessive increases in the police precepts on council tax. The Government expect an average council tax increase in England of below 5 per cent. Council tax in Wales is a matter for the Welsh Assembly Government. We also expect the relentless focus on value for money, which is now more necessary than ever, to continue.

Capital grant and supported capital expenditure totalling £222 million will be allocated in 2009-10, with each police authority receiving the same allocation as in 2008-09. We have also announced additional sums of money for mobile information devices and we have identified additional resources to tackle gun and knife crime. That is something that we will do, as necessary, as we move forward.

We have continued to listen carefully to all stakeholders in determining the detail of this police funding settlement. It gives police authorities the stability that they all need to plan ahead, and it will support the police service in delivering effectively for the public. I commend the report to the House.

1.11 pm

Mr. David Ruffley (Bury St. Edmunds) (Con): I thank the Minister for his comprehensive speech. I want to begin my remarks on behalf of Her Majesty’s Opposition by expressing the sentiment that the police in this country
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do a very difficult and often very dangerous job on our behalf, and I pay tribute to their service. The police need resources from the Government, and indeed the taxpayer, to discharge their duties in upholding law and order. That is why this debate is so important to us all.

Last year’s crime figures showed that violent crime has risen by almost 80 per cent. in the past decade. Crime has not increased in every category in that period, but violent crime certainly has and that causes great concern to the public. In addition, the economic downturn has placed even greater strain on already tight police budgets. Sadly, the analysis from the Home Office that predicted a rise in crime as the economy worsened has been borne out by the latest quarterly crime figures. In the last year, burglaries have risen by 4 per cent., while fraud and forgery are up by about 16 per cent. and the number of street robberies committed at knife-point have increased by 18 per cent.

This year’s settlement is the second part of the three-year 2007 comprehensive spending review. Excluding additional grants for counter-terrorism and other specific grants, the police settlement increase will be 2.7 per cent. this year, as the Minister said. A total of 20 police authorities will receive the lowest increase, of 2.5 per cent., and the Minister mentioned that there was a bigger-than-average increase for the West Midlands authority.

There is no doubt that the police grant settlement is extremely tight, as the Minister would be the first to accept. Last year, the Association of Police Authorities said that the three-year settlement was one of the “tightest for many years”. In its submission to the 2007 CSR, the joint APA and ACPO expenditure forecasting group said that there would be a funding gap, even with an annual grant increase of 2.7 per cent. The group’s most optimistic assumptions suggested a funding gap that by 2010-11 would be in the region of £660 million. Using less optimistic assumptions, the group calculated that the gap could be as high as £996 million.

The economic downturn has had an adverse impact on the financial position of police authorities. The collapse of Icelandic banks has wiped out about £95 million of police authority reserves, according to information that I have received from the APA. Lower interest rates of course mean that there is less investment income for police authorities, and proceeds from asset sales are lower in a depressed market. The Gloucestershire police authority, for example, estimated in January that the current grant settlement and economic conditions mean that it could lose up to around 60 police officers and 28 PCSOs, as well as 50 police staff posts.

The estimates used by the expenditure forecasting group assume that the police precept on council tax would increase up to that maximum of 5 per cent., but the Minister for Local Government announced in a statement on 28 November that seven police authorities, including Cheshire, Leicestershire and Warwickshire, would face precept increase caps of 3 per cent. in 2009-10. In his reply, I hope that the Minister will confirm that those authorities will receive less than the 5 per cent. precept cap.

Of course, Her Majesty’s Opposition oppose excessive increases in council tax, especially in these dire economic times. The Minister will be very well aware that some police forces with historically low police precepts believe that they have no alternative but to seek more revenue from local council tax payers. Does the Minister think
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that in some police force areas there is a public demand—not a councillor demand—for an increase in locally funded police spending above the cap limit? Has he received any representations from members of the public along those lines?

In last year’s debate, the Minister’s predecessor said that he expected the 2.7 per cent. growth in the police force grant to apply to this year as well, and the Minister has confirmed that today. However, I should like to hear his views on the pre-Budget report statement of 24 November, when the Chancellor announced

On a point of clarification, will the Chancellor’s demand for extra efficiency affect the 2.7 per cent. increase? I have seen minutes from Lincolnshire police authority and the Met that express the concern that they might be expected to find extra efficiency savings at short notice. Will the Minister clarify the position in relation to that efficiency target? The 2007 CSR set a target for police authorities to make 9.3 per cent. efficiency savings over three years, so will the Minister say whether police authorities are still expected to meet that target? Alternatively, is there a new target—explicit or otherwise—that he wants them to work to, as a result of the catastrophic downturn in the economy and in the fortunes of the Government finances since the CSR statement for the three-year period that we are currently in was made?

I should also like to hear the Minister’s views on some other statements by the Chancellor, who recently announced plans to bring forward £3 billion of capital spending to assist the economic recovery. How much of that accelerated capital expenditure has been channelled into the policing sector, in its widest definition? Many people in the police authorities believe that accelerated local investment could assist improvement in the police estate and also support the local construction industry.

I turn now to some of the minutiae of how the police grant is distributed. The calculation is notoriously complex, and is based on five separate components. The first, the needs-based formula, is easily the most important and is otherwise known in the trade as the principal formula. Its main determinant is the projected resident population, which is then adjusted to take into account several “police crime top-ups” that adjust the main principal formula to take into account socioeconomic and demographic factors that may impact on crime levels. Those factors include how many licensed bars, people in long-term unemployment, daytime residents or residents in terraced accommodation there are in an area, as well as its population sparsity.

Secondly, in coming to a grant settlement, the Home Office will also apply additional rule 1. I will not detain the House on the minute working of that rule, important though it is. It affects the grant provision for South Wales police and redistributes it to other police authorities in Wales.

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