4 Police
Police Funding allocations
61. Police forces receive funding in two main
ways:
- from the Home Office through
the police grant under the Police Act 1996. A Police Grant Report
(England and Wales) is laid before Parliament each year by the
Home Secretary setting out aggregate amount of grants for police
purposes that it is proposed to pay under section 46 of the Act
and the amount of grant proposed for each police authority under
the same section.[49]
- funding from a precept on Council Tax determined
by each police authority. Council tax now counts for 23% of police
force expenditure finance, compared to 13% in 2001-02.[50]
62. In addition, police forces receive funding
through the Crime Fighting Fund, Neighbourhood Policing Fund and
capital allocations.[51]
63. In its written evidence, the Government Office
for the East Midlands state that:
In 2009-10 the East Midlands region received £511.8million
in police general grants, an increase of 3.1% (15.2 million) over
2008-09. Every police force in England is guaranteed a grant increase
of at least 2.5% every year until 2010-11. In 2009-10 East Midlands
received an increase above this level. In total Government police
grants to the East Midlands region increased by £256.5 million
(66.4%, or 27.1% in real terms) between 1997-98 and 2009-10.
Nationally the Police Service has benefited from
a significant increase in resources over a sustained period. On
a like-for-like basis Government grant for the police will have
increased by over 60% or over £3.7 billion between 1997-98
and 2010-11.[52]
64. In its evidence to our inquiry, the East
Midlands Police Authorities state that the current funding situation
means that "the East Midlands is not a well funded region.
[It] receives the 4th lowest level of general Government funding
for the police and the 4th lowest level of grant funding per head
across the 9 UK Government regions."[53]
They argue that 'Lincolnshire Authority receives the lowest level
of grant per head of any force nationally.'[54]
65. According to the Police Authorities, "the
Government's decision to phase in the new funding formula means
that each year forces in the East Midlands subsidise taxpayers
in other regions."[55]
They estimate that each East Midlands resident loses out on £4.31
of police funding, which amounts to £19 million per year
across the East Midlands, the second biggest regional loss of
grant nationally."[56]
66. In recognition of these problems, the Government
has promised to review the formula again for the next Comprehensive
Spending Review. It has also established the Police Allocation
Formula Working Group which includes representatives from the
Association of Chief Police Officers and the Association of Police
Authorities.[57]
67. However, the East Midlands Police Authorities
assert that the main problem is not the formula itself, but that
it has not been implemented fully due to the application of a
floor damping mechanism,[58]
which ensures that all police forces and authorities receive a
minimum year on year increase of 2.5%.[59]
Chief Constable Richard Crompton, Lincolnshire Police, said "in
the East Midlands, all five the constituent forces lose out as
a result of [the] damping formula. Were the funding formula to
be implemented to its full extent, we would actually receive 6.8%
more in our budgets and be able to afford something in the region
of 518 additional officers as a result."[60]
68. Janet Birkin, Chair, East Midlands Police
Authorities Joint Committee, added "[W]e recognise in the
East Midlands that although there is a floor of 2.5%, this year
we received 3.1%, and next year we will receive 3%. So we recognise
that the Government have some recognition of the challenges we
face; but clearly when we should be receiving an additional 6.8%
it is not sufficient to address the risks that the East Midlands
face. I am sure that you will all remember that in the "Closing
the Gap" Report by Denis O'Connor, we were seen as the Government
region that had the highest risk."[61]
69. The East Midlands Police Authorities estimate
that "if the formula were implemented entirely, it would
deliver an extra £19 million of Government funding to police
the East Midlands which is very close to the extra £22 million
which the five East Midlands Police Authorities estimate they
need to spend to address the immediate policing risks they face".[62]
70. When asked about consultation on the floor
damping mechanism, Janet Birkin said:
To use your words, Judy, it comes from on high. There
is no consultation whatsoever. Whereas there is a fairly transparent
process with regard to the funding formula, there is none of that
with regard to the damping issue.
71. We recommend that the Government
introduce more transparency and consultation on the way floor
damping applies to police funding.
72. We commend the Government
on the increases in police funding since 1997. However, we are
disappointed that the Government has not implemented the funding
settlement in full. The region is missing out on £19 million
of police funding which would mean an additional 518 officers.
We recommend that the Government should implement the funding
formula in full and phase out the floor and damping mechanisms.
The Comprehensive Spending Review
73. The Government has announced that the next
Comprehensive Spending Review is to be delayed due to the current
uncertain economic situation. On 9 December 2009, when introducing
the Pre-Budget Report in the House of Commons, Rt Hon Alistair
Darling MP, Chancellor of the Exchequer, said "for as long
as extraordinary uncertainties remain in the world economy, this
is not the time for a spending review. We have already set out
clear and firm departmental budgets for the next financial year,
but to try and fix each Department's budget now for the next five
years is neither necessary nor sensible."[63]
74. The CSR has provided some certainty to planning
and resource allocation. Its delay is seen by some witnesses both
as a problem and an opportunity to improve it. For example, Janet
Birkin, Chair, East Midlands Police Authorities Joint Committee,
stated that the three year Comprehensive Spending Review (CSR)
period means that "our planning and budgetary decisions are
much better informed. However [...] we were disappointed that,
at the same time, there wasn't the opportunity, or the Government
didn't take the decision, to phase out the damping and floor."[64]
She was also concerned about delays to the new CSR period, "one
of the issues caused by having a late response on the new CSR
period and if our grant funding is cut back, which is anticipated,
[...] because of the current economic climate-much of our costings
will be around staffing at 80%-will be that clearly, police officer
numbers will have to reduce. This is the only way that we can
make quick changes to our budget, whereas if we had a longer lead-in
time, maybe that would not be affected in quite the same way."[65]
75. We urge the Government to
ensure that the delay to the next Comprehensive Spending Review
does not impact on police funding in the East Midlands.
Review of the police funding
formula
76. As mentioned previously, the Department for
Communities and Local Government and the Home Office have established
another review of the funding formula. In their evidence East
Midlands Police Authorities accept that "no funding formula
can provide the 'perfect' distribution of resources." The
police argue that the "current formula has been developed
and refined over many years to offer a relatively objective grant
distribution system and provides a good assessment of the needs
faced by all Police Authorities." They warn that wholesale
changes to the current system could risk making funding disparities
much worse. They go on to argue that specific reforms would be
much more effective in ensuring funding quality. The main flaw
they identify with the current funding formula is the lack of
currency in population data and the failure to recognise population
growth.
77. Phil Hope MP, Minister for the East Midlands,
accepted that this may be a potential problem:
So I share your view: if you have a population-based
allocation formula, how often and how regularly should you update
that, based on a census that goes on every 10 years and is then
amended? These are real challenges, but we are doing it as best
we can. The Government are doing the best they can.
Does this region, in some way, disproportionately
suffer from lagging population because we have growth that isn't
compensated for? Certainly, if you have evidence about that I
would be interested to hear what that was and we might, therefore,
take that forward.[66]
78. We recommend that the Government
and the Office for National Statistics ensure that as up to date
as possible population figures are available for police funding
decisions.
49 The Report also states the considerations which
the Home Secretary took into account in making her determination.
In determining the allocation among police authorities of the
whole or any part of the aggregate amount of grants, the Home
Secretary may, under section 46(4) of the 1996 Act, exercise his
discretion in applying such formulae or other rules as she considers
appropriate. The Report does not cover police grant for capital
purposes made under section 47(1) of the 1996 Act, police grant
for the safeguarding of national security made under section 48(1)
of the 1996 Act, or police grant made for any other specific purpose.
The Report has to be agreed by Parliament. Back
50
House of Commons Library Standard Note, SN/SG/2616 Back
51
Qq 20-26; see also Ev 103-105 Back
52
Ev50 Back
53
Ev 67 Back
54
Ibid Back
55
Ev67 Back
56
Ibid Back
57
Ev 50 Back
58
Floor Damping: This is now a permanent part of grant
distribution. Grant floors are set for different classes of authority.
Those whose grant increase is above the floor will have their
grant scaled back to pay for those protected by the floor. (definition
from Greater Manchester Police Authority: Revenue Budget and Capital
programme 2007-08, published February 2007, para 3.10) Back
59
Q 3 Back
60
Q 1 Back
61
Q 3 Back
62
Ev 74 Back
63
HC Deb, 9 December 2009, cols 368-369 Back
64
Q 26 Back
65
Q 26 Back
66
Q134 Back
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