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Last year my hon. Friend the Member for Montgomeryshire (Lembit Öpik) spoke in the equivalent debate, making many of the same points as the hon. Member for Bromley and Chislehurst has just made and with which I concur. If a police authority, in this case, or a local authority has been put in place to represent a community, it is best placed to set priorities and to engage with and consult its community, as I know has happened in this case, to ensure that there is support for the proposed funding level. I am surprised that there are not more Surrey Members here to debate the issue, but the hon. Member for Mole Valley (Sir Paul Beresford) is in his place and has already made a significant contribution.
Sir Paul Beresford: If the hon. Gentleman looked at the debate that took place in Westminster Hall, he would find that 10 out of the 11 Surrey Members were present. We made it quite clear where we stood, and the Government just turned a deaf ear.
Dan Rogerson: I certainly appreciate that the hon. Gentleman has taken the trouble to attend and contribute to this debate.
I have contacted locally elected representatives in Surrey about the issues that are being debated locally. Their view is that, at all the local liaison forums and meetings throughout the area, people have made it absolutely clear that they are behind the police authority in protecting front-line policing. As the hon. Member for Bromley and Chislehurst said, the authority has taken steps to be as efficient as it can, as the Audit Commission has noted. The authority has some of the lowest costs and grants per head of the population. It has already looked to cut office staff, and it has made senior officers redundant, so it has done what it feels it can to be as efficient as possible.
The police authority has reached the stage where it is considering front-line policing, and local people are understandably concerned. They have taken the trouble to engage with the issue, and they have indicated their support for the authority’s decision to level a rate that is slightly higher than that which the Government feel appropriate—hence, we find ourselves where we are today.
Unfortunately, I have not had the opportunity to check the following statistic, and I am sure that the Minister will correct me if I am wrong, but one locally elected representative told me that the grant per head of population in Surrey is lower now than it was 10 years ago. That conclusion is arrived at after taking account not of inflation, but of the basic funding. It highlights the pressures on the police authority, and it shows that, by increasing the precept to that level, the authority had to take action that it did not want to take.
The views of the public are on the record, and I am sure that local newspapers and media will have followed the debate and reported it widely. The former Member for Guildford, Sue Doughty, has run a petition on the issue, and local authority members in the district, borough and county tiers to whom I have spoken feel that the police authority has made every effort to be as efficient as possible. There is no option now but to try to raise the money locally in order to protect what is an important, front-line policing service on which Surrey communities rely.
A number of issues have been raised in Westminster Hall and in another place noble Lords and baronesses questioned the Government on the topic and raised issues about the county’s proximity to London and its effect on policing issues, and the county’s transport issues. I shall not revisit all those questions, but I should say that my party clearly opposes capping and does not think it necessary. The principle should be that locally accountable people are in place to take decisions on behalf of their communities. Had the authorities completely ignored the will of the local community, gone against it and not taken steps to ensure its support, as they might have done in times gone by, the Government might have had slightly more of an argument for their actions today. However, it is clear that the people of Surrey are willing to pay the increase to protect the front-line services that they need in their communities.
The point that the hon. Member for Mole Valley made about the pittance that will be saved from most people’s council tax bills shows the arbitrariness of such action. It has been taken not in a measured way by looking at the details of the case, but in order to hold the line and send out a signal to other authorities.
I am disappointed that the hon. Member for Bromley and Chislehurst feels that his colleagues will not be able to oppose this measure; I suspect that they have aspirations for where they might be in a year or so, and they may be concerned about setting precedents. That, however, is for the future, and we will see what the electorate make of that possibility.
If the debate on localism, to which all parties have been contributing, is to have any meaning, it is crucial that we allow locally accountable bodies to speak up for their communities, deliver services and levy taxes that those communities have demonstrated they are prepared to pay. I shall listen to the rest of the debate, but I am minded to divide the House on this motion.
2.55 pm
Sir Paul Beresford (Mole Valley) (Con): The Minister should understand from my record that I am in favour of tight budgets, value for money and efficiency—and proportionality as well. The most interesting thing for me about this debate is that I expected to support enthusiastically my hon. Friend the Member for Bromley and Chislehurst (Robert Neill); unusually, however, I find myself supporting many of the points made by the hon. Member for North Cornwall (Dan Rogerson), although not necessarily the theory behind them. The hon. Gentleman has certainly done a little homework—presumably, it was for the Westminster Hall debate—on the background to the situation of Surrey police.
Surrey police force and Surrey police authority are very efficient, and have had plaudits from organisations such as the Audit Commission that have looked at them. The police force receives the lowest grant per head of population of any police force. It is rather galling to hear from Ministers about increases and how much money has been put into police forces nationally and then to look at the reality for Surrey. The grant for Surrey police has decreased in real terms. In 1997, it received £96 per head of population; now, 12 years later, it receives £93 per head. [Interruption.] I am sorry that the Minister is not listening; perhaps she will read
what I am saying later. The real-terms reduction in grant is 39 per cent.—a considerable clobbering for Surrey police.
This saga’s big complication, which has only just been touched on, is that the Government have made their calculations on a notional budget and hence a national council tax. In June last year, the chief executive of Surrey police authority was informed that the Secretary of State had decided to nominate the authority for capping purposes and that it would be given a notional budget. However, no constraint or capping level related to that notional budget was mentioned at the time. When, in contrast to the police authority, Surrey police force started doing its budgetary calculations, the idea of a notional budget was raised with the Government as a precautionary measure. In a reply dated 25 July 2008, Department for Communities and Local Government lawyers replied that
“there is no requirement on the Surrey police authority to calculate a notional level of Council Tax (based on the notional budget requirement) for 2008/09 and Surrey police authority will set their budget requirement and their precept for 2009/10...in the normal way”.
At the end of October, Surrey police force—the force, not the authority—was informed that if Ministers decided to use their capping powers, a notional council tax might be used. Again, there was a warning that no decisions had been made. In early November, Surrey police force—again, not the authority—sought further clarification and was told that the police authority was to be informed on the position regarding notional council tax in due course. That confirmation did not arrive with the police authority until 28 January 2009—literally within hours of the actual budget and precept being set.
The capping designation now is that Surrey police authority is faced with the ludicrous situation of rebilling all Surrey council tax payers for a minimal reduction. The squeeze on Surrey police authority’s grant and its budget ceiling means that it has had to cut staff progressively. It has calculated its manpower levels for the years 2009-10 to 2012-13. It commences, before the capping, with a reduction of 159 personnel for this year, moving to a total reduction of 373 policemen and women in 2012-13. This is before designation and rebilling take effect.
The cost of designation is a further £1.6 million cut. The cumulative effect over the same period is a further reduction of 55 policemen and women. The rebilling will cost Surrey police authority £1.2 million. It has used the rebilling authorities—the district councils—to assess this. That translates into a further reduction of 24 personnel—24 fewer policemen and women. In my area, Mole Valley, that works out at about £4.65 per bill. That means that at band D, it costs £1.47 more than the reduction: not until band F is the negative position reversed.
I hope that the Minister can visualise the huge sigh of relief in every band D household when their council tax bill drops through the door for the second time, giving them a huge annual reduction of £3.18. As most people pay in 10 monthly instalments, the reduction will be 32p a month. Most people will be confused; some will be bemused. If they are aware of the cost to their already strapped police force of the rebilling, in addition to the capping, they will be very unhappy, if not furious. Local authorities throughout Surrey will have to reset
their direct debits for every council tax payer paying by those means. Many thousands of Surrey residents who pay by bankers order will have to send a new bankers order form, probably costing 20 per cent. of the total saving just in the stamp and the envelope, and more if one includes the costs to the bank of changing everything.
It is a ludicrous, disproportionate situation. Bearing in mind the tiny saving, the Department could easily set the designation to next year, but for Surrey police authority alone, Ministers have decided to place a further cut, with the expensive, unnecessary, bureaucratic rebilling. Looming in the background is the prospect of a judicial review, which will be interesting, as I think I am correct in saying that nowhere in the new legislation does the word “notional” appear in relation to capping as regards either budgets or council tax. However, that is not my decision or the Minister’s—it will be for the court.
The additional cuts to pay for this rebilling have meant a lesser, more stretched police presence in difficult circumstances that will be exaggerated by the current economic climate. The Government do not have to require a rebilling, and common sense demands that they do not.
3.3 pm
Paul Holmes (Chesterfield) (LD): In the course of this short debate, three issues have arisen. First, there is the concept of a notional budget and whether that has any status in law. As we have heard, that issue may be going to two judicial reviews, one relating to Surrey and one to Derbyshire. Secondly, what is an excessive budget? Who decides what an excessive budget is, and what are the criteria for deciding that there is one? Thirdly, if there is an excessive budget, who takes the decision to stop it and to punish the local body—council, fire authority, or, as in this case, police authority—that is introducing it?
We have heard about the principle of local democracy and local accountability. Over the past year or two, a big buzzword in the Conservative party and the Labour party has been localism. We hear a lot of talk about localism, but see almost no evidence of any move towards delivering it. Localism—local democratic accountability—means that the local community elects its police, fire and local government authorities and decides what is best for local people. It decides on levels of council tax, on what services to introduce or cut and on how to deliver the wishes that local people have expressed through the ballot box. That is localism, giving real power to local people, as happens in just about every other democracy in the world.
In Germany, France, Sweden, Norway, Finland, any of the 50 states of the USA or the provinces of Canada, people cannot understand the system that we operate in which 90 per cent. of taxation is brought to No. 11 Downing street, and then some of it is handed out with strings attached. Local authorities, and through them the police and fire authorities, get about 20 to 25 per cent. of their money from local council tax and the rest, with strings attached, from the central Government block grant.
The system is alien to most democracies in the world. It was alien to how we operated in this country in the 19th century, when major leaders such as Joseph Chamberlain in Birmingham pioneered the first public transport systems, gas, sewerage and all the rest. That
was done by local authorities without their having to go to the Government, cap in hand, and say, “Please can we do this?”
Some of the first signs that we were abandoning that came in the 1970s. The famous Clay Cross rent rebels took action back in 1973, for example. Then in the 1980s, the Conservative Government introduced rigid rate capping. Labour opposed that in the 1980s and 1990s, but when it came to power in 1997, it continued the system. The Minister said that the Government had made it more flexible, and there is some truth in that, but they none the less continued the rigid control from the centre over locally elected bodies and local accountability. All the talk of devolution, accountability and localism is absolutely meaningless unless we give real financial power to local democratically elected people.
Who should decide whether a budget, in this case a police authority’s budget, is excessive? It should be local people. In Surrey, and in Derbyshire, which the Minister mentioned about nine times—I was counting—the police authorities got the full support of the local population through consultation groups. People said, “We think that the police in this area are so underfunded, under-strength and understaffed that we are prepared to pay a higher than normal council tax increase to support them.”
In both counties, it was a cross-party process. I know for a fact that it was in Derbyshire, and I understand from the Westminster Hall debate, in which I took part and in which, as we have heard, 10 of the 11 Surrey Members spoke, that it was in Surrey as well. It appeared from the consultations with electors’ groups and community groups that there was widespread support across all areas for setting the budget that the Government then decided was excessive.
Sir Paul Beresford: Surrey’s budget is supported about 49 per cent. by council tax and about 51 per cent. by the Government, so local toes are being trod on very badly.
Paul Holmes: I thank the hon. Gentleman. Surrey is one of the great exceptions, as it is one of the police authorities for which as much as 50 per cent. of the money comes from local people. I remember a previous Police Minister, two or three Ministers ago, saying a couple of years ago when we debated the underfunding of Derbyshire police that one way forward was to use the Surrey example of switching the emphasis from central Government to locally elected bodies and council tax. That was about three Police Ministers ago and nothing has happened since, but if we do that, it will take us back to the principles of accountability, democracy, local devolution and localism.
If those principles mean anything, they must mean that local people make decisions through the ballot box, and their elected representatives decide on the level of council tax, local income tax or whatever taxation is in use. If people are unhappy about it because the council tax increase or in this case the police authority precept is excessive, they will decide that through the ballot box. That is what ballot boxes are about, and it is what local democracy should be about.
There is a key question that I want the Minister to answer, because we did not get an answer when I posed it in the Westminster Hall debate. When the Government
use this power—I believe wrongly, because things should be decided locally—how do they decide that a budget is excessive? We have heard all the detailed statistics showing that Surrey is an efficient police authority, as the Audit Commission has stated. Derbyshire is the same. The police authority is very efficient and has made many backroom cuts in the past few years. The Government and the auditors have praised it for doing that. There is no fat to be cut. As the Government admit, every year since 2006, when they introduced a new funding formula, Derbyshire’s police budget has been underfunded by £5 million. This year, Derbyshire has increased the precept by £1.6 million to try to overcome some of that. If it is underfunded by £5 million a year and it has increased council tax by £1.6 million to offset roughly a third of the underfunding, how can the budget be excessive? If one should have £5 million more and one raises £1.6 million, one is still underfunded by £3.4 million.
According to the Government’s figures, in 2006, 2007 and 2008, Derbyshire police were grossly underfunded, but the Government will not let Derbyshire police authority, with the backing of all three political parties and community consultation throughout Derbyshire, do anything about it. That is illogical. Next year, Derbyshire could well be in the same position as Surrey. What was done to Surrey last year has been done to Derbyshire this year. The Government have said that they will not make Derbyshire rebill or cap it directly, but they will knock £1.6 million off next year’s money. Derbyshire, which has among the lowest numbers of police officers per head of population of any shire county in England, will have to lose 60 front-line police officers by next April to meet what is capping, in all but name, this year.
I repeat that I would like the Minister to answer, not so much the questions about accountability and localism, which we have debated previously, but the question that I asked in the Westminster Hall debate at the start of June. How do the Government decide what constitutes an excessive budget in the case of Surrey and of Derbyshire? If Derbyshire, on the Government’s admission, is underfunded by £5 million, how can raising £1.6 million towards that be excessive, when it makes up only about a third of the shortfall?
3.11 pm
Ms Rosie Winterton: I recognise the concerns that hon. Members have expressed today. I emphasise that capping is not something that we do lightly. Indeed, as I explained earlier, we have introduced a much more flexible system. In some years, no action has been taken, but we need to examine the overall situation and ensure that we get the right balance between local accountability and the Government’s role in ensuring that council tax rises are not excessive. Of course, it is, first and foremost, for local authorities to set their council tax and justify it to local electors. However, we also have a duty to protect council tax payers from excessive increases.
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