UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 104-i

HOUSE OF COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE THE

EAST MIDLANDS REGIONAL COMMITTEE

 

SHARE OF FUNDING RECEIVED BY THE EAST MIDLANDS

MONDAY 30 NOVEMBER 2009

(WESTMINSTER)

JANET BIRKIN and RICHARD CROMPTON

LAURA DYER, ANNE RIPPON and SEAN TIZZARD

 

Evidence heard in Public

Questions 1 - 55

 

USE OF THE TRANSCRIPT

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Oral Evidence

Taken before the East Midlands Regional Committee

on Monday 30 November 2009

Members present:

Paddy Tipping (Chairman)

Judy Mallaber

Sir Peter Soulsby

 

Examination of Witnesses

Witnesses: Janet Birkin, Chair, East Midlands Police Authorities Joint Committee, and Richard Crompton, Chief Constable, Lincolnshire Police, gave evidence.

 

Q1 Chairman: A warm welcome to Janet Birkin, Chair of the East Midlands Police Authorities Joint Committee, and Richard Crompton who, I think, acts as the chief officer of the group but is also the Chief Constable of Lincolnshire. Thanks for coming here. We were originally scheduled to meet in Loughborough, but for a variety of reasons, that wasn't possible. So it's good of you to come here at short notice.

This is perhaps an appropriate meeting, because I know, Richard and Janet, that you and colleagues in the East Midlands have been concerned about the funding levels of police authorities in the East Midlands for a long time. This is our first evidence session for an inquiry that, in broad and basic terms, asks, "Does the East Midlands get its fair share of resources?" So let's start with that. Tell us what the position is with the police in the East Midlands.

Richard Crompton: Thank you. The basis of our argument here today is really that, no, we don't receive the funding we should receive in the East Midlands in policing terms, despite the fact that we absolutely accept that there has been an increase in police funding right across the UK, and we have seen some of that increase within the East Midlands. The funding formula, which is currently used to decide how the national pot for police funding is apportioned across the 43 forces, is subject to a dampening mechanism. In the East Midlands, all five of the constituent forces lose out as a result of that dampening 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 police officers as a result.

 

Q2 Chairman: But you just mentioned all five forces. Tell me about Northamptonshire, because I thought it was in a slightly more advantageous position than the other four.

Richard Crompton: It is true to say, sir, that Northamptonshire currently does lose out through the dampening to the tune of, I think, £0.6 million, which, in comparison to the other four forces and authorities, is a much smaller amount. It is equally true to say that it has been in and out, either side of the line, so to speak, during the years; but, collectively, of course, we rely upon one another working collaboratively, and Northamptonshire certainly feels the impact of that as well.

 

Q3 Chairman: I think I saw last week the provisional allocation for next year-I did not read it as thoroughly as I might-but it is subject to damping again.

Richard Crompton: That is correct, sir, yes.

Chairman: Can you just fill that in a bit?

Richard Crompton: The dampening mechanism was introduced really to ensure that all forces and authorities across the country received as a minimum an increase year on year of 2.5%. So I suppose that from our point of view, in a fairly strange way, a funding formula was decided about six years ago on the basis that national funding was not apportioned according to need and risk, but it was then immediately dampened to ensure stability, which I can understand. However, unlike other public authorities, that stability has been maintained through the dampening mechanism, and the funding formula has not been allowed to be implemented at a staged rate.

Janet Birkin: Perhaps I could add something to that by saying that we recognise in the East Midlands that although there is the 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 face the East Midlands. 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.

 

Q4 Chairman: So, Janet, what's to be done about it?

Janet Birkin: Well, what would be the best thing to happen is clearly that the funding formula was fully implemented, and as I am sure that you are aware, that was one of the recommendations from Sir Ronnie Flanagan's latest review-that there was some movement towards implementing the funding formula fully. From our perspective, we fully recognise that it would be very difficult to do that in a single sweep. There is some disappointment that the Government have chosen not to show an element of phasing in the funding formula over the three-year CSR period, which, of course, they have done in other key local public services. At this moment in time, we do not see that there has been any recognition to do that, but that for us would be a significant improvement to our current situation and would address much of the gap we already have.

 

Q5 Chairman: Why is that? I know that you've been on the case for a long time. What's the Home Office saying to you?

Janet Birkin: I think the Home Office-I am sure, working in conjunction with the CLG-is saying to us that it recognises the issue. In fact, I can say personally that when we have been to see the Policing Minister, he has been very aware and supportive of the challenges we face.

Chairman: Supportive, but not giving you the cash.

Janet Birkin: Exactly, and actions speak louder than words, do they not? However, having said that, I believe they probably feel that they want stability and realise that if the funding formula was implemented in full, it would mean that there would be authorities and forces who would lose out. But equally, it would be fair to say that there are officials who have used the words, "They would want to treat all their children fairly." At the moment, we don't feel we are, because we have been losing out for a number of years.

 

Q6 Chairman: Richard, you said at the beginning that you'd had extra resources. The figures we've got are an extra £256 million, or a 27% real-terms increase, between 1997-98 and 2009-10, but you've still got a deficit. What would you use that money for?

Richard Crompton: First of all, if I may say how the additional money has been used, of course, we've used it to invest in neighbourhood policing. We've used it to invest in protective services across the region. If the funding formula, however, were to be implemented to its full extent and we received the extra £34.2 million that we would receive as a consequence, that, as I said, would give us resources to the tune of 514 extra police officers. Undoubtedly, there would be a considerable call on those additional officers to fill some of the protective services gaps that were identified by Her Majesty's Inspectorate of Constabulary, in the review both in 2005 and 2008. In Derbyshire, for example, there are over 70 organised crime groups that have been recognised and mapped by that force. They are involved in things such as homicide, gun crime, knife crime and the supply of class A drugs. The simple fact is that the force is not in a position to properly address all those organised crime groups because it simply does not have sufficient resource, and the same could be said to a greater or lesser extent for all other forces in the East Midlands.

 

Q7 Chairman: If you got up to your funding formula at the appropriate level, would you be happy with that, or would you still be knocking on the door?

Richard Crompton: It would be a strange chief constable who said they absolutely have enough, but recognising the realities that we all face, it would make a very significant difference. It is true to say, however, that we have identified and costed additional risk within the East Midlands region, to the tune of an additional £22 million. So although the implementation in full of the funding formula would assist greatly and make a very real difference, I still would not be able to put my hand on my heart and tell you that we were absolutely fully funded to meet the risks that we currently face. But, as I say, I think that all chiefs and chairs of authorities recognise the difficult economic situation that everybody is in.

 

Q8 Chairman: Let me just ask you a couple of other things and then we will turn to Judy. First of all, Lincolnshire is the lowest funded force?

Richard Crompton: Yes, we are.

 

Q9 Chairman: How has that come about?

Richard Crompton: I think you have to look back historically. Over the years, Lincolnshire has always been-for as long as people can remember-a low, or the lowest, funded force within the country. That is partly due to the fact that, as I hope we have made clear in our evidence to you, we are funded at the lowest level in terms of the grant that is shared out across all forces.

It is also true to say that in Lincolnshire, during the years when some authorities were introducing relatively high levels of council tax to raise additional funding, for a range of reasons the police authority in Lincolnshire chose not to do so. However, that situation no longer pertains. You may recall that two years ago, following the authority's seeking a very significant increase in the precept, we were capped but we were capped at 26%, which I think recognised the severe difficulties we were in at that point. So there are a range of historic reasons that have brought us to the position we are in today.

 

Q10 Chairman: Both of you have a long-standing and outstanding record of working in the public services and you will read the political runes as well as I do-probably better than I do. Everybody tells me we are about to move into a range of austerity-when it happens, how deep it will be and for how long remains to be seen. However, wouldn't it be better to get you up to a fairer funding formula in a time when there were increased resources rather than in the period we now look as though we're going into, where the rate of increase might be very limited or might even decrease?

Janet Birkin: Could I start our response with a point of clarity? We do not have an issue with the funding formula. You mentioned a fairer funding formula. We sit quite comfortably with the revised formula. Our real argument is about the fact that it has not been implemented and about the whole of the damping mechanism; it seems to be a little cloudy as to how that mechanism is arrived at.

 

Q11 Chairman: It is easier to look after your children, to use your phrase Janet, if you have some money in your pocket than when you haven't any money in your pocket. I suspect that we are moving towards that spectrum.

Janet Birkin: Yes, and we are very mindful of that. Going back to the point that Richard made, there has been underfunding for many years across the East Midlands. In fact, if I just bring that alive by talking about Derbyshire as an example for one second, when the funding formula was reviewed it gave us an additional £11 million in grant. To date, we lose £5 million year on year of that grant that we have not seen. So we recognise that. It has meant that from an efficiency point of view, the region has had to show considerable efficiencies, which means that when we move into the more austere times it is much more difficult to make the efficiencies that are required. That is particularly challenging for us, because one has to recognise that efficiency is all about maintaining services. We don't want to cut services, which is ultimately where we could be.

Could you just repeat the question?

Chairman: If you are going to get to the required level, it is easier to do it in a time of affluence, rather than austerity.

Janet Birkin: Yes, so the point I wanted to raise there is that we would really agree with that. The point is that we have to balance the setting of our budget with a capping regime that has been brought in by Government. Four of the five force authorities in the East Midlands have suffered through the capping regime in the last five years-Derbyshire being the latest this year. Although we were not capped, we were nominated, and we do feel there is an element of unfairness there, when we are trying to play our part, particularly when we had done so much consultation with the community, who wanted us to be brought up to a level that was equitable with our neighbours and could address the risks, particularly when we had support from cross-party MPs and particularly when, as an authority, we did not want to go into conflict with the Government. The budget and precept we set did fit within the previous capping guidelines. So it gives us additional challenges for all those reasons.

 

Q12 Chairman: We've talked a lot about Derbyshire and Lincolnshire, for understandable reasons, but I'll be in big trouble back home if I don't mention Nottinghamshire. They are in the same position, aren't they?

Richard Crompton: Yes, indeed, they are. You will have to forgive me for referring to my note here. The failure to implement the funding formula to its fullest extent, as I have explained, has lost the region £57 million. In Nottinghamshire, their share of that equates to 211 additional police officers. You have made the point about Northamptonshire, and you are absolutely correct that they are at the balancing point in this debate, but the other four forces in the East Midlands lose considerably from that failure to implement the funding formula.

 

Q13 Chairman: Can you give us the Leicestershire figure as well?

Richard Crompton: Yes, I can.

 

Q14 Judy Mallaber: What was the amount they were short in Nottinghamshire, in millions of pounds?

Richard Crompton: The cash amount?

Judy Mallaber: I am sure it is in here somewhere. You said the figure for Derbyshire was £11 million. What is the equivalent for Nottinghamshire?

Richard Crompton: For Nottinghamshire the figure is £7.6 million. In Derbyshire they could have afforded 139 additional officers, and in Leicestershire, 86. In Lincolnshire, my own force, the number is 69, and as I said, in Nottingham it is 211. In Northamptonshire it is nine officers.

 

Q15 Judy Mallaber: I'm going to go over some of these questions in a little more detail to make sure, for the purposes of our report, that we are absolutely clear. Going back to the police funding formula itself-though we know the problem is the implementation-I was slightly unsure because you said you would obviously live with that quite happily, but you also said that you had identified an additional £22 million risk. Was that the wish list on top of the current funding formula? I wasn't quite clear whether that was in addition.

Richard Crompton: I wouldn't describe it as a wish list, but all forces within the region, as you would expect, have done a lot of work to try to assess the risk that the people we serve face in each of those constituent forces. We do that in a number of ways, but one of the most significant ways, of course, is by mapping organised criminals and their activities within the region. These are only estimates, but the estimate within the total East Midlands region is that we would have to spend an additional £22 million on top of that which we currently lose out from in relation to the funding formula to properly meet that risk.

Janet Birkin: To add to what Richard has said, for forces and authorities it is the case that when that strategic risk assessment has been completed, the genie is out of the bottle. It is about knowing the unfunded risk that we have to balance and that the chief constable has to balance in all his or her decision-making processes.

 

Q16 Judy Mallaber: I come back to the funding formula without that £22 million. If we were to get it, do you think that that is fair, as between different regions? Do you have any complaint about the balance between regions?

Richard Crompton: The balance between regions is frankly quite stark. Our region is in the lower half.

 

Q17 Judy Mallaber: I meant on the formula, not on the implementation of the formula. If we had the formula, although obviously everybody would be able to identify more money that we desperately need, would you feel that it was fair as between regions?

Richard Crompton: As Janet has said, no formula is perfect. We could always argue about some of its manifestations but, yes, in general terms everyone in the East Midlands is content that the formula itself is sound and, were it to be properly implemented, we would feel we were getting a fair share of the nation's resource that is being put to policing.

 

Q18 Judy Mallaber: Have you been able to influence the formula when it has been drawn up?

Janet Birkin: No. Well, let me clarify that, Judy. When we knew that there were to be changes to the formula, there was consultation to which all authorities could contribute. We feel that the decision taken at the time with the actual funding formula that we have now would be seen to be fair. It feels about right for us.

Even if we had the additional £19 million-which would go some way, as Richard has pointed out-we have to remember that we have a £17 million budget deficit across the East Midlands. We have also the £22 million of unfunded risk, and we would have some difficult decisions to make about where the money would be spent, because we would also want to think about how we could invest in collaboration for some more longer-term savings. We can only spend the money once. As for the point you were alluding to, Judy, when you asked whether we would see that fair across other regions, we have lost out for a significant number of years.

I shall give you a comparison from region to region. We all see much of it with regard to levels of officers. We have the lowest number of officers. We have 24.6 police officers to deal with 1,000 crimes across the region compared with the North-East that would have 36.3 officers to deal with 1,000 crimes. In police officer measurements, we are significantly disadvantaged.

 

Q19 Judy Mallaber: I am trying to identify the particular different aspects involved. Does the funding formula itself adapt? I know that we are not getting it implemented, which is our first problem, but is it adapted to take account of changes? If so, how regularly does it take account of, for example, population changes, which is obviously an issue for us in the East Midlands?

Richard Crompton: We smile because it does, but only years after the event. For example, our current funding is based on the mid-year population for 2004. As you will all know, the East Midlands is a rapidly growing region. Northamptonshire and Lincolnshire are the number two and three fastest growing counties in the country. We have grown hugely since 2004, but the funding formula is linked to the population estimates that existed at that time. My understanding is that, when we go to the next CSR, it will be based on the population estimates for 2008; none the less there will still be a considerable lag. Our argument is that it would be possible to inject some additional flexibility into the apportionment through the formula based on the annual estimates of population through the Office for National Statistics, but that is not done.

Janet Birkin: Adding to that point, I am sure that the CLG would say that, even based on the 2004 population statistics, it will make some proportionate changes to it; but clearly, once the CSR has been set, those are the population figures that would be used. If we are talking about the East Midlands where there is a significant increase-plus 11% is expected by 2016-the demands of an ever-growing population are not adjusted for. It continues, and is not dampened like the formula. The demand for policing increases with an increase in population, and the formula, because of damping, stays the same.

 

Q20 Judy Mallaber: Are there any other particular features of our region that should be taken into account, but you feel maybe aren't?

Richard Crompton: Yes, I believe there are, as we've made clear-for example, the policing grant disadvantages in the East Midlands. Of course, there are other sources of funding as well. Specifically, I am thinking of the Crime Fighting Fund, the Neighbourhood Policing Fund and the capital allocations that are made each year. When you look at each of those funds, again, we are significantly disadvantaged. In relation to the Crime Fighting Fund, Lincolnshire police receive the lowest level per capita of any force in the country, and the region is, I think, the fourth most disadvantaged in the country.

 

Q21 Judy Mallaber: How is the funding for the Crime Fighting Fund determined? How is that grant determined? What do they take into account?

Richard Crompton: I am not sure we can answer that question today, if you will forgive me.

Judy Mallaber: It would be helpful, because for us just to talk about the funding formula and not specific grants, we need to be accurate.

Richard Crompton: We could certainly supply the Committee with that detail.

Janet Birkin: It would be fair to say, wouldn't it, Richard, that the Crime Fighting Fund was set up specifically for forces to meet set police officer numbers?

Richard Crompton: Yes, indeed.

Janet Birkin: That has only recently been relaxed to a degree to allow an element of work force modernisation and changes in the work force mix, but any further additional information, we can let you have.

 

Q22 Judy Mallaber: Richard, which are the other grants again?

Richard Crompton: If I may, in relation to the Neighbourhood Policing Fund, Derbyshire is the lowest funded force of all, and we are the second-lowest funded region in relation to that. It continues in relation to capital grants-we are the third lowest region.

 

Q23 Judy Mallaber: Can I hold you off about the Neighbourhood Policing Fund? To what extent is Derbyshire underfunded because the authority and the chief constable at the time did not want to apply for PCSOs, or is that not relevant?

Janet Birkin: I think that, in truth, it isn't relevant, and I don't say that in any defensive way at all. At the time, the police authority and the chief constable, because of our very low number of police officers, felt that money was better funded in officers rather than PCSOs. Of course, the Government brought in their 75% funding on PCSOs. Our numbers would be comparable with neighbouring forces, had the final tranche of PCSOs been allowed, but the Government withdrew that, which is one of the reasons why we are the lowest funded.

 

Q24 Judy Mallaber: So Derbyshire didn't start at a lower base because of that original decision?

Janet Birkin: Yes, which we felt was the right decision at the time.

 

Q25 Judy Mallaber: And the other fund you were about to go on to?

Richard Crompton: The final fund is capital allocation. Again, the East Midlands received the third lowest level per capita across the nine regions in the country.

 

Q26 Judy Mallaber: It would be helpful to have a few more details about how they determine those, and where we fit in into that. Otherwise we are not doing the full picture.

You mentioned the CSR. We don't yet know what the arrangements are for the next one. What effect has that delay had in terms of how you are planning to use and allocate resources?

Janet Birkin: We really welcome the fact that we have a three-year CSR period, because it means that our planning and budgetary decisions are much better informed. However, as we've said earlier, 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 the floor. 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, as was said earlier by the Chairman, 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. That 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.

 

Q27 Judy Mallaber: I don't know much about the police allocation formula working group. Can you tell me what it is, how effective it is, whether we have East Midlands representatives on it and which bits of this process it has a part to play in?

Janet Birkin: The police allocation funding formula group is part of the CLG. It works closely with the Home Office through Michael Romberg's area. It is a group that is re-looking at the funding formula. We did not know that group existed until we invited Michael Romberg up to the region, together with Karen Sussex who works on that group. We had a constructive and productive conversation with them. We have never been invited to sit on that group. That will be done at a national level, I would imagine through ACPO and the APA. However, we were invited to submit our evidence to that group, which we will do by the end of this year. I believe they anticipate coming to a decision by the middle of next year.

 

Q28 Judy Mallaber: Are police forces and authorities consulted on the damping arrangements and their impact, or do they just come out from on high and you have no say until after the event, when you are complaining about it?

Janet Birkin: 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.

 

Q29 Judy Mallaber: Just a final question about the impact. You have said how many extra police officers we could have. You talked about some elements of risk. You gave Derbyshire as an example and the number of gangs. What are the main areas of potential risk that you would identify as a result of the formula not being implemented?

Richard Crompton: It is best answered in this way. I have drawn attention, through my comments in relation to organised crime, to one of the more dangerous elements of the risk that we carry, but you will also appreciate that we have, for example, to work in relation to the management of dangerous offenders and sex offenders. We have to work in the area of child exploitation. All of these things are either risks or emerging risks within the East Midlands. Janet has also drawn attention to the ratio of officers per crime. The amount spent in our region compared with other regions does not compare favourably in relation to each crime. At the neighbourhood level, we also see the results of the year-on-year failure to implement the funding formula in fewer officers at that level and a propensity among the forces to remove officers from the neighbourhood level in order to fill some of the gaps at the serious and organised end of the criminality that we have to combat. So it is an across-the-board impact that is felt within the region as a result of our funding difficulties.

 

Q30 Sir Peter Soulsby: You tell us that, as a result of the funding that you have, the East Midlands has a lower number of police officers per 1,000 crimes than any other region. That could to some extent be choice in how the money is spent. Is it also the case that the grant per crime and spend per crime are at the bottom of the table, or are they somewhere else?

Richard Crompton: Yes. Let me give you the specific figures. In the East Midlands, in relation to grant-to-crime ratios, the region receives £1,330 to deal with every crime committed in the area. We compare that with the North-East region, where the amount is £800 more in relation to urban crime. I can give the figures for police officers per crime again if you wish, but it is a similar situation. In relation to the spend per crime, which is the other area that you were interested in, in the East Midlands region, forces spend an average of £1,950 on every crime committed. Again in the North-East region-it feels like we're picking on the North-East region-they actually spend £2,597. That's some £650 over what we spend in the East Midlands.

 

Q31 Sir Peter Soulsby: That's very helpful, thank you. You also referred to some of the specific sources of funding that the forces receive. I just wonder whether, if you take all those specific grants together, you could give us a flavour of where the East Midlands comes in terms of funding.

Richard Crompton: I'm not, at the moment, able to parcel them all together, but in each of those specific areas, we are at the lower end of the apportionment in relation to other regions across the country.

 

Q32 Chairman: Could you do the sums for us and let us have a new total?

Richard Crompton: Absolutely, yes.

Janet Birkin: Perhaps I could add to that, Richard, for Sir Peter. If you take the Crime Fighting Fund, we're the fourth lowest funding per head of population. If you take the Neighbourhood Policing Fund, we're the second lowest. If you take capital grants, we're the third lowest level of capital grant. We're the fourth lowest for grant funding per head. Clearly, when you put all that together, we are going to come in at around the fourth lowest, I would anticipate.

 

Q33 Sir Peter Soulsby: Increasingly, forces are collaborating together in the East Midlands, as elsewhere. Could you give us a flavour of to what extent synergies have been achieved as a result of that collaboration?

Richard Crompton: Yes-perhaps I could start off, Janet? We are quite proud of what's been achieved in the East Midlands in relation to collaboration. We have been collaborating together for a decade or so now in the East Midlands Special Operations Unit, which you may well be familiar with. It is a specialist resource to which all forces and authorities contribute: some 160 officers and staff are there to help us address serious and organised crime right across the region. It is something which has been identified by the inspectorate as good practice, and indeed has been held up as an example that others might follow.

Since the debate on force amalgamations from 2005 and since it was decided that forces would not amalgamate but that emphasis would be on collaboration, we have kept a full-time team working on our behalf in Newark, working up ever more opportunities to collaborate. At the moment, we collaborate on round about 67 issues across the East Midlands region. Of those, there are some very significant areas, such as, for example, witness protection, which is looking to share the responsibility for that across the region and actually provides a model, which I anticipate we will see more and more next year and in the years to come, of hubs within the region, if I may describe them as that, to provide each of the five forces with specialist resource. Specialist covert technical support would be another example where we see the benefit of additional collaboration.

We have made significant savings through collaborating together on procurement. We have also, it has to be said, managed to bring into the region significant sums of money through Government because of our collaborative style. For example, over £8 million was brought in last year and this year to enable us to invest in over 5,000 mobile data devices, which will free up officer time and make them more efficient. It has been, I think, an important element of the way in which we not only manage money but also manage the operational risk that we face, but I would have to say that it is not the panacea, and it will certainly not solve all our problems.

 

Q34 Sir Peter Soulsby: I recognise that, and I recognise that it is not just about the money when you collaborate, but I wonder whether you have actually tried to quantify the financial effects of the collaboration.

Richard Crompton: In terms of-?

Sir Peter Soulsby: In terms of savings. You mentioned something as you were going through there; I just wondered whether you have tried to put them together.

Richard Crompton: In terms of the amounts saved and the amount brought into the region, we can certainly give you hard figures. Again, I have to say that the amount saved does not amount to a massive amount of money. We are in a position where collaboration tends to enable us to provide an enhanced operational response and resource in the region, as opposed, at the moment, to making much in the way of hard cash savings, although, going back to procurement, I think it was £1.3 million through procurement. When you add together the total of all our cash savings and the additional money that has been brought into the region, it is just shy of £12 million.

 

Q35 Sir Peter Soulsby: If amalgamation were back on the table, would that make a significant difference? Is there the prospect of big savings from amalgamations?

Richard Crompton: In 2005, I led the team which looked at this in the East Midlands and we costed what it would amount to to bring all five forces together in the East Midlands; the total cost was around £95 million. It would have taken a decade to have recouped that amount of money. To hammer that home, they were not just our figures; they were audited through the Home Office and we agreed on that sort of figure. It is true to say that there are savings to be made, but it requires a very significant injection of cash to get it started and it would take an awful long time to see the benefit in terms of cash.

Sir Peter Soulsby: Thank you very much.

 

Q36 Chairman: Can I just pick up on two or three of those issues for people who follow our proceedings, particularly our good friends in the press? Could you just make it clear, Richard, that this base in Newark, which is very close to me, is at the embryo regional stage?

Richard Crompton: I am very happy to do that. It is in a unit on an industrial estate. It could hardly be described as a prototype for a new regional headquarters, I assure you.

 

Q37 Chairman: I know that, but other people don't. Turning to EMSOU, the East Midlands Special Operations Unit, I know it but I have lost sight of the funding. Initially it was 100% Home Office funded, then it was 50% Home Office funded. What is the position?

Richard Crompton: You are quite correct and thank you for prompting me. We currently, this year, enjoy £2 million funding for EMSOU, down to £1.5 million next year and then we are told there is no further funding. While we are grateful for what we have received, it does add to our concerns about the future, given all the things that we have discussed this afternoon.

 

Q38 Chairman: Just finally, I am not entirely sure what the role of the Department for Communities and Local Government is in this. That is more around the figures and the material that goes into the formula. What I guess I am saying is, who calls the shots? It is a Home Office issue, isn't it?

Janet Birkin: You raise an interesting question. Certainly, when we were threatened with capping, of course it came from the Minister from the Department for Communities and Local Government. Interestingly, it was a Policing Minister last week who announced what the funding settlement was going to be. I would imagine that there is an element of close working and co-operation between the two Departments with regard to policing.

Chairman: Well, let's just keep that in our imaginations, shall we? We won't put it higher than that. Can I just thank you for coming? Our interviewing techniques, Richard, may not be up to your standard and that of some of your colleagues. When you are reflecting on the train back home and think, "I should have confessed to this" or "I should have told them that", don't be shy to drop us another note if you want. I am grateful for your coming. We hope to produce the report some time about the middle of February, so the sooner you can let us have the material you promised us the better. Thank you both very much.

Richard Crompton: Thank you for the opportunity.

 

Examination of Witnesses

Witnesses: Laura Dyer, Executive Director of the Midlands and South West for Arts Council England, Anne Rippon, Regional Strategic Lead, Sport England (East Midlands), and Sean Tizzard, Regional Policy and Partnerships Manager, Big Lottery Fund (East Midlands) gave evidence.

 

Q39 Chairman: Having got the police off the scene, let us now turn to lottery funding in the East Midlands. We have Anne Rippon from Sport England, Sean Tizzard from the Big Lottery and Laura Dyer from the Arts Council. All of them have, among other things, an East Midlands regional remit.

When the lottery came out in the early years, there was a strong view in the East Midlands that, to put it crudely, we were not getting our fair share of the action. Was that true then?

Laura Dyer: From an arts point of view, that was true in the early days. What we have striven to do over the past 10 years is to work really hard. It was actually slightly about raising ambition and aspiration for some of the big projects, particularly for the large capital awards. We were slow off the blocks in terms of starting and getting in those large-scale applications. Obviously, over the past 10 years that has transformed. Last week, with the opening of Nottingham Contemporary, we completed a programme that invested upwards of £140 million into the region, into nine new or greatly improved buildings, in both cities and rural areas.

Q40 Chairman: Would that be the same for the Big Lottery?

Anne Rippon: Yes, that was certainly one of the concerns that we had in the early days. We were getting quite a lot of small projects through, so the actual numbers, in cash terms, were quite low compared with other regions, but we had lots of projects coming through, so there were lots of projects, but smaller projects. What we have tried to do over the years is work together to look at areas of need and address some of the issues that are behind that.

Sean Tizzard: From the Big Lottery Fund's perspective, based on statistics of population deprivation, we would look for the East Midlands to get about 7.9% of the national pot. We are currently at about 7.6%, so we are a little bit down, but just about on track. Recently, we have had some big successes. The "myplace" programme, which has a non-lottery funded programme working with the Department for Children, Schools and Families, got £27.5 million into the region, including £5 million in Sir Peter's constituency, which is 11% of the total pot.

Village SOS, which is a programme that we run in conjunction with the BBC, looks at enterprise within villages. We have recently gone through the process of shortlisting those projects. Of the 17 in England, five are in the East Midlands, so there is a definite positive wave in the East Midlands.

 

Q41 Chairman: Shout me down if I have got this wrong, but has it been about the slowness of getting the big capital schemes off the ground? Has that been the essential problem in the East Midlands?

Anne Rippon: Yes, one of the issues for the East Midlands is having Nottingham, Derby and Leicester rather than having, say, a Birmingham as they have in the West Midlands. We do not have the large city authority to take forward the really big projects.

 

Q42 Chairman: Be careful what you say. I can see a hole opening up here. So, there is no big major international conurbation.

Laura, how did you get the new contemporary gallery off the ground in Nottingham? I think I'm right in saying that David Hockney is there today and, unfortunately, I am here.

Laura Dyer: The same with me, missing lunch with David Hockney. Obviously, though, I'm delighted to be here.

The developments in Leicester, Derby and Nottingham worked closely with the local authorities, because in each case they were the driver for Capital Build. So they worked very closely with officers and members about what their needs were. As Anne says, although we do not have a large metropolitan centre, speaking from the arts point of view, if you put together the cultural assets of the three cities, they outstrip Birmingham, Manchester or Liverpool in terms of what they have to offer, and, most importantly, the audiences that they draw. So people do engage very highly with those facilities.

Elsewhere we obviously have some great arts organisations with huge ambitions. First Movement in Derbyshire is leading with a project that is revolutionary in working with people with profound learning disabilities and physical disabilities. In Northampton, the theatre down there was led by the arts organisation; and also there is the New Art Exchange in Nottingham. So we have great examples, where a combination of individual vision and the organisations that have driven it are coupled with really strong support from local government.

 

Q43 Chairman: Tell me, because you all accepted in the early years that there was not a fair share of resources, did you as distributors take a conscious decision that this was not right and that you would put in place remedial measures, as it were, to sort it out?

Anne Rippon: Yes. We certainly had the lottery distributors forum working across the East Midlands, which brought us all together to look at where there were issues. Sometimes they were common issues and sometimes they were different, but where there were common issues we worked together with bodies such as funders forums and local authorities to identify where the projects might come from and what issues were holding them up.

Laura Dyer: I would add in terms of our own investment that the lottery is about 17% of our spend as an organisation. The vast majority is obviously grant-in-aid from the Treasury. We have looked strongly at where we spend our resources in terms of our infrastructure, and then looked at what we call our cold spots. In our case, they are particularly Northamptonshire and Lincolnshire.

We have tried to take some corrective action by working directly, particularly with the Lincolnshire coast and Northamptonshire, to try to generate more applications. Although it is an open application process, and of course one needs strong applications, there are ways in which we can use our resources and staff time to help stimulate the expertise and demand in those areas.

Anne Rippon: Similarly, we have identified areas where not so much is happening, but we can say that 13.6% of the sporting and lottery funding that we distribute has come to the East Midlands. That is based on the 7.7 mark that we were talking about before. That is quite a good achievement for the East Midlands.

 

Q44 Chairman: Sean, tell us, you mentioned a figure of 7.6 and a target of 7.9. There is still a bit to go.

Sean Tizzard: The target that we set for East Midlands funding is 7.9, of which we are at 7.6. That is based on the population of the East Midlands and levels of deprivation.

 

Q45 Chairman: When will you reach that target?

Sean Tizzard: Hopefully soon, with the successes of myplace and village SOS.

 

Q46 Judy Mallaber: What other courses do we have? It is a rather disparate region. On points 1 and 2, as you said, Laura, the trouble is that we are dependent upon applications. The difficulty is that it is quite hard to spread the benefits fairly to places that may not have people bright and skilled enough to even think of putting in an application, or who might have a bright idea but no one to follow it through. The third point was about the twists and turmoils that you have to go through to get applications through for all but the very small grants.

Laura Dyer: We work closely with local government, and one of the challenges-I do not want to pre-empt questions on what is around the corner-is that we can definitely see that where there are capable and active cultural teams in the local authority that we can work with, we get a strong response. For example, if there is not an arts development officer for us to work with directly on the ground, it is often harder to give that support to people as they emerge. We certainly do that. We also send more and more of a challenge to our artists and arts organisations that we fund through other routes to act as a kind of host and a sort of talent development agency. So there are lots of ways in which different arts organisations are working with artists who may be finding it harder to make those applications to again generate that kind of interest.

 

Q47 Judy Mallaber: Can you explain what mechanisms you use? I am in the unfortunate position of being in an authority area that has just got rid of its arts development officers and most of its sports development officers. How would any developments be stimulated in a situation like that? I am sure there are large parts of the East Midlands where the local authorities have never particularly engaged in that kind of initiative.

Anne Rippon: In terms of the issues you have talked about, we appreciate the fact that you have been quite vocal about making sure that we keep sports development officers where we can. In each county, we have established county sports partnerships, which bring together the local authorities and their sports teams, sports clubs and anybody else who is interested in sport in that area to try to get a joint approach. Those county sports partnerships have been doing a good job in getting information about grants and in supporting people who want to make bids for grants to let them know what is around and how our small grants, which are very important for small clubs, work. The information we have so far is that, in our new small grants programme, we are getting a good proportionate share of the small grants that are available for small clubs. Derbyshire has done particularly well thanks to the work of the county sports partnership.

Sean Tizzard: Our approach to helping groups is slightly different. We do work with local authorities, but the key groups that we work with are councils for voluntary services and voluntary action groups to ensure that the groups are skilled up to a level to be able to apply successfully. Within our Bases programme, we have funded 35 projects around the region to the sum of £9.5 million. That is funding of voluntary action groups and CVSs to ensure that those groups can be skilled up to apply.

To touch on something that was mentioned earlier, where there are pockets where there isn't perhaps the skill, we have been working over the past year on a number of outreach areas, looking in particular at our Awards for All programme and Reaching Communities to understand where, across the region, groups are not perhaps getting their fair share. We then work again with the voluntary action groups and CVSs in those areas to try to upskill them. That is something that we have been doing as a regional team. The Public Accounts Committee commended our outreach worker on that front.

 

Laura Dyer: Similarly to Sport England, we have arts partnerships at a county level and a county arts officer. There is still an arts officer at every county level doing the work of looking at where there is no provision and then working with arts organisations. Artery, for example, has done a lot of good work with emerging organisations and artists to give them some sort of support and advice. We ourselves do roadshows, so we travel every year and do a series of roadshows in different locations. We spread those out. We also do very specific targeted workshops for artists, taking them through the whole application process and getting them to do a dummy assessment themselves, so that they really understand how the assessment process works.

We have also helped establish a series of forums, so there are organisations such as East Midlands Participatory Arts Forum, which is about organisations that work at a community level having the opportunity to share good practice and experiences. There is also the work we do with organisations such as Voluntary Arts Network, again reaching those voluntary, third-sector community arts and amateur arts organisations that we might not have direct contact with, but that they have networks into.

 

Q48 Judy Mallaber: On the large projects, has it been possible to do anything to smooth out the difficulties that applicants face when they have to get match funding and go around one organisation after another with everyone saying, "We won't fund you until they do"? That is a perpetual problem. Has there been any work done to try to ease that path? That applies more to the Big Lottery Fund than some of the others.

Sean Tizzard: On the Big Lottery Fund's application, groups need to have match funding. We would say that, with our Reaching Communities programme, groups could apply for 100% of what they need.

 

Q49 Judy Mallaber: The problem is that every organisation that would be part of the funding won't say yes until all the others have, which can sometimes send you round in circles.

Laura Dyer: We do, actually. As the Arts Council we are often the first funder, so we step in often in the first instance and give that surety for others, particularly when we are working with European funding and particularly with local government funding. For example, in Leicester we put our £10 million on the table for Curve straight away.

Anne Rippon: One of our important roles is the brokering of those deals for people. If somebody comes with the germ of an idea, we may not be able to put money directly on the table immediately, but clearly we will work with them to help them find other funders that might be interested. There has been some good collaboration, looking at different aspects of funding. For example, with the development agency we have found that money that has come from regeneration has matched up with Sport England money, and other money, to make projects happen.

 

Q50 Sir Peter Soulsby: It strikes me that your three organisations have rather different roles and relationships with the people who are on the receiving end of your grants. It is not just what you are about, in each case. I wonder if each of you in turn could give some flavour of the balance between what you have at the regional level and what you have at the national level, and to what extent you see yourselves as the distributors of grants as opposed to, perhaps, the promoters of particularly desirable ends, or the advocates on behalf of the region to the national level of the organisation.

Laura Dyer: We operate an incredibly devolved situation in the Arts Council, so our authority lies at a regional level. We have a regional arts council with 15 members, one of whom is a Department for Culture, Media and Sport appointment because they also sit on our national council, and we have six local authority representatives who have to be an elected member. They make all decisions on grants to do with our Treasury grant-in-aid-up to £800,000-and make recommendations to the national council on grants over £800,000. So decision making is at a devolved level. Similarly with grants for the arts, we operate a very tight turnaround time of five or 12 weeks, depending on the level, and all those grant decisions are made at a local level and then scrutinised by our regional council.

We feel that we have strongly stuck to the desire that decisions are best made at a local level, closest to the point of experience. Those 15 people, who are all volunteers except for our chair who gets a small remuneration, bring an enormous amount of wisdom and knowledge to the table, coupled, obviously, with officer expertise. The national level gives us a real sense of national pulling-together-an overview and expertise that we can draw on, that we couldn't possibly provide at a regional level in every single region.

At the moment we are going through a process of cost saving, and we will be getting our administration costs down to a level of 6% moving forward. Our lottery resource is critical to us. It came about fairly early in my career in the arts, and it has transformed the arts landscape and what we have been able to do. But it is a small part in terms of our financial model and, critically, what we would say is that we are a development agency for the arts and, of course, as any good development agency, we have resources that we are able to apply to meet those aims. But we see our role very much as brokering, influencing and being able to demonstrate how the arts truly can transform people's lives.

Sean Tizzard: We have two operation centres in the Big Lottery Fund that assess all the applications-one in Birmingham and one in Newcastle. It is very much part of the role of the regional team to supply regional context for all the assessments that we have. We have a regional committee member, so when decisions are made committee members take on board not only the assessment from the operational teams, but also the comments that we have put into the mix.

We are in the process of developing a set of new programmes, one of which will revolve around a community funding theme. That is being worked out for launch in 2010 and is going to work very closely with local wards and local communities.

Finally, on the point about how we can influence nationally, an example is that in the East Midlands a voice that was coming out very strongly was about the area of continuation funding. So if a grant is coming to an end, what do we do then? We held a conference at The People's Centre a couple of weeks ago, where that message came out again. So we are influencing centrally and I know that there is going to be some movement around continuation funding as a result of the voices from the East Midlands.

Anne Rippon: We are obviously a national organisation and with our new strategy we are charged with getting 1 million people doing more sport by 2012-13. Our focus is on delivering those specific outcomes and, as such, a significant amount of our funding-£480 million of lottery funding over the four-year period-will go through the national governing bodies of sport.

In addition to that, we have some other funding that the region will directly benefit from. We are funding the county sports partnerships at £200,000 a year. There is £13 million of Exchequer funding going into school sport. Our sustainable facilities fund is £10 million, with £6 million of lottery money and £4 million of Exchequer money, and it is going to capital projects. Those are all dealt with on a national basis, but of course our role in the region is to make sure that we are the eyes and ears and that we are helping to ensure that people know about the schemes and opportunities that are available, and also that we are helping them to make good and appropriate bids. We don't want people putting in bids that are not going to get there; we want to make sure that they are really good bids, which are going to help us achieve our overall objective of getting 1 million people involved in sport.

We also recognise that at local level there are sometimes some issues in some areas, so we have a themed rounds programme. There is a competitive round across the country, but the recent round was for rural communities and clearly that has an impact for the East Midlands. So we were able to ensure that people in the East Midlands were aware of the opportunities for the rural-themed rounds and that they got their bids in, and I am pleased to say that clearly we are doing well on that at the moment and already we have a good proportion of schemes through to the second round.

Then there is the small grants programme too. The first quarter's figures show that 47 of the 100-plus projects have gone through from the East Midlands. So we are doing really quite well in getting those projects through, even though there is not a regional decision-making element in the grant aid process. It is a national decision-making process, but it depends very much on us getting good schemes through from the East Midlands to ensure that happens.

 

Q51 Sir Peter Soulsby: Do each of you have in place a mechanism for assessing the impact of the spending?

Laura Dyer: Yes-in various ways. In terms of our capital investment, at the moment we are conducting a longitudinal study with East Midlands Development Agency, which looks at the social and economic impact of that investment. We are doing that over a long period of time. So there are very specific pieces of research that we do.

In terms of the regularly funded organisations, which are organisations that receive grants for up to three years, there is quite a rigorous monitoring process in train for them. For example, they have to complete quite detailed assessments, which give us statistics and other material that we can feed through to the Department for Culture, Media and Sport to show the efficacy of those organisations. In terms of grants for the arts, we conduct assessments of those grants in terms of the brokerage, the people reached and how our money is reaching different communities. So the different grants all have different reporting requirements.

Sean Tizzard: The Big Lottery Fund classes itself as an outcomes funder. In the assessments, we are looking at the difference that a project will make to the beneficiaries. Grants officers will monitor activity both during the project and at the end of the project. For capital projects, there is an ongoing period of post-grant monitoring too. So, yes, monitoring goes on.

Anne Rippon: We monitor every award with clear key performance indicators and regular monitoring evaluation on a quarterly basis. Every award has its own specific contract, so we sometimes write in conditions in relation to things that we particularly want to see happen. The active people survey conducted by Sport England every two years is also showing the levels of participation within each area so we are actually using it as one of our outcomes, particularly when the national governing body is a supporter involved. We want to see it getting more people taking part in sport and we need evidence, and the active people survey is helping to provide it for us.

 

Q52 Sir Peter Soulsby: At the moment, a lot of funding is being distorted by one big thing-the Olympics. What is your assessment of the impact on your spending in the East Midlands? Will we be getting our share? Will we be getting part of the legacy?

Laura Dyer: The Arts Council sees the cultural Olympiad, in particular, as a real opportunity. In the region, post the closure of the regional cultural consortiums, we are taking the lead on the cultural Olympiad on behalf of all the cultural agencies, so we are hosting the post at our office. We are looking at a range of activities and managing a programme of the legacy trust, which has some very exciting work. We are leading on a number of key projects such as artists taking the lead. It was recently announced and had the crocheted lions as our project in the East Midlands. There are some great opportunities for all communities in the East Midlands-artists and participants-to take part.

 

Q53 Chairman: In terms of total spend, Laura?

Laura Dyer: We are not seeing a huge impact. Obviously, the lottery total receipt went down slightly, but we have dealt with that. One of our challenges is that we have now dipped slightly below the 50% success rate. We are on about 46% success rate for applicants. That is a challenge. We prefer to be above the 50% so that people have more than a 1:2 chance of putting in an application and being successful. But that is outweighed by what we see as some of the benefits such as the work of volunteering and people being passionate about engaging and seeing how their work can have a really positive effect in the East Midlands.

Sean Tizzard: We recognise that the Olympics can have a fantastic benefit for all the communities that we want to serve. At the Big Lottery Fund, we put £29 million into the legacy trust for the Olympics. As Laura mentioned, we anticipate many benefits from ongoing volunteering as part of the Olympics.

When I go to funding fairs, groups often say, "Oh, the Big Lottery Fund. You haven't got any money, have you?" We have therefore to work very hard internally to get the message across that that is not the case. Actually, lottery ticket sales are holding up and although there was a diversion of money, it does not mean that we have no money at all.

 

Q54 Chairman: Is the amount of money you have in the East Midlands going down?

Sean Tizzard: The initial budgets up to 2012 are tapered going down. Lottery ticket sales are holding up, so in the next release of our budgets in March 2010, a different picture might be showing.

Anne Rippon: We, of course, are very enthusiastic about the Olympics, as you might imagine-probably more so than some of our colleagues. Clearly, there are lots of advantages from the Olympics in the East Midlands. One of the things that we have clearly seen is the impact of the pre-games training camps work. Loughborough announced that the Japanese team will be coming, and there are all sorts of spin-offs from that, some of which stem back to the funding that we have put into Loughborough in the past, but it has certainly meant that it has a place on the world stage of sport. Recently, it recently signed a deal with the Japanese Olympic Committee, which will go on beyond the Olympics in London in 2012. It will also bring in money to Loughborough university, which is a good thing, too.

There are other spin-offs. For example, the local authorities have all got together and funded a post that will be a young people co-ordinator to make sure that there is real benefit for young people in the East Midlands. They are doing a lot of work linked up with the Japanese team, and making sure that there are links with local languages colleges and so on. Having said that, the sports angle is very important for us. We have just recently put £900,000 into Holme Pierrepont to uprate the canoe slalom course, which will be used by the British team in its preparations until the new slalom course comes on nearer to London. There is a really good picture and quite an exciting development move going forward.

 

Q55 Chairman: I have a last question for you all-a quick answer if you could. If you could do one thing to make things better for lottery funding and recipients in the East Midlands, what would it be? This is a place of wish and dreams.

Laura Dyer: For me, it would be to give a higher profile to what it achieves. We have extraordinary people in the region doing extraordinary things, with a whole range of communities, and it is sometimes hard to get that on the local media platforms.

Anne Rippon: When £1 billion of lottery funding had come into the East Midlands last year, we announced it and much press activity went on. A lot of people did not realise that anything like that amount of money had come into the East Midlands. It is quite an important thing for us to hold on to really.

Chairman: Sean, you can phone a friend if you want.

Sean Tizzard: No. I would echo those two points. I shall pick on a point that was made earlier about the complexity of application forms. From my perspective, it is something that the Big Lottery Fund is looking at through online applications. I would absolutely look to improve our customer service option by making those application forms simpler. That is a personal view. I know that it is something that is being worked on centrally.

Chairman: Thank you all very much. That was very helpful. Thank you for seeing us here rather than in Loughborough. I am sorry if we have put you out a bit. I am sorry that you did not get to meet David Hockney. I was devastated, too.

Laura Dyer: I know. It would have been a very big table.