6Police funding
Current levels of funding
153.The latest police funding round was announced on 31 January, covering the 2018/19 financial year. If all Police and Crime Commissioners maximise their income from the council tax precept, total direct resource funding for England and Wales will increase to just over £11.3 billion in 2018/19, from just over £11.0 billion in 2016/17—a cash rise of 2.5%.226 CPI inflation was 2.5% in the 12 months up to February 2018, so this represents a flat settlement in real terms. £270 million of the £450 million increase will be dependent on use of the maximum precept, and precept income varies significantly between forces.
154.The NAO’s recent report on police financial sustainability stated that legal requirements prevent police forces from running a budget deficit, so “any problems caused by funding reductions are likely to manifest themselves in a force being unable to provide an adequate policing service rather than in financial failure”. It highlighted evidence that the service is under strain, including figures on the average time it takes to charge an offence, which increased from 14 days for the year ending March 2016 to 18 days for the year ending March 2018. It criticised the Home Office for its “light touch” approach to accountability, meaning that “forces’ financial sustainability has not received proper attention”, and pointed out that there are “no common standards for measuring all demands for police services and their costs”, with the result that there is “no national picture of what forces need”. Further, it concluded that there is “no overarching strategy for policing”, limiting the Home Office’s ability to plan investments and programmes of work over the longer-term.227 Gavin Thomas, President of the PSAEW, reportedly responded: “Policing is now utterly reliant on fewer people working longer and harder. That exploits police officers and defrauds the public.”228
155.It was made clear to us throughout this inquiry that the police service is deeply dissatisfied with current funding levels, which many regard as unsustainable. Chief Constable Thornton told us that the service got “more than we expected” in the last settlement, but “we did not get what we asked for”. Commissioner Dick told us that the Met has made £700 million’s worth of efficiencies in “the last few years”, and they have “another couple of hundred million to find”, but that difficult choices need to be made:
I am sure everybody would say there is probably a little bit more efficiency they could squeeze here and there, but what we see is this huge rising expectation and demand that is putting a massive strain on our people, and it cannot go on without hard choices: [ … ] more money, smaller mission, [or] greater risk appetite”.229
156.As well as widespread concerns about the level of police funding, witnesses also complained about the manner in which it is delivered. City of London Police said that “Annualised funding allocations result in short term strategies that deliver short term impact”, and described them as a “constraint on the development of skills and technology”.230 Stephen Mold, PCC for Northamptonshire, said that the “imposition of one year funding settlements [ … ] hampers effective long term financial planning”, potentially deterring forces and PCCs from making long-term investments.231 Martyn Underhill, PCC for Dorset, described the “absence of any indication of funding beyond 12 months” as “disappointing”, and said that it compromises the ability to formulate “a realistic medium term financial plan”, placing the police “at a disadvantage and out of step with the rest of local government”.232 Dame Vera Baird also called for three year funding packages to allow for effective medium-term planning. The Police Transformation Fund, which awards tens of millions of pounds every year to projects aimed at preparing the police to respond to changing demands, was criticised by witnesses for being “heavily focused on short-term funding”,233 and for incentivising forces to invest resources in a “competitive bidding process for short term projects”.234
157.In 2015, the “advisory group on the national debate on policing in austerity” published a discussion paper making a number of recommendations about police funding and structural reform. It was authored by the then CEO of the College of Policing, chief constables from four forces, and representatives from UNISON, the Police Federation, the PSAEW, HMIC and the APCC. The paper called for the “replacement of multiple, uncoordinated funding streams with multiyear settlements and authority to budget, fund and commission jointly” with other public services. It said that consideration should be given to providing direct funding to “any units set up to provide functions cross-force or nationally”, rather than “routing money via participating forces”. It also described the grant-based funding formula overseen by the Home Office as “backward-looking, highly complex, opaque and, through its reliance on out of date data and regression, distant from current policing reality”.235
The police funding formula
158.The police funding formula determines the manner in which Central Government funding is allocated to each of the 43 police forces in England and Wales, accounting for factors such as population volume, density and the size of the “hard-pressed population”. Reform of the funding formula was the subject of a report published by our predecessor Committee in December 2015. This explored the circumstances leading to the Home Office’s decision to pause the reform review process, following the realisation that the data used to calculate future funding changes at force level had been incorrect.
159.The Committee said that the current formula is not fit for purpose, and called for the Home Office to appoint an independent panel to assist it in formulating revised proposals. It asserted that the revised model should take account of variations in income from the council tax precept, non-crime demand, local diversity, cross-boundary crime, and the demands of counter-terrorism policing.236 The Government’s response was received 15 months later, in March 2017. The Home Office stated that it had developed a new review process since the ‘pause’ that followed the identification of errors in the data. The review commenced in September 2016, with a “period of detailed engagement with the policing sector and experts”.237
160.In March 2017, the Chair of the Committee wrote to the then Policing Minister to enquire about the status of the review, and asked when the Home Office intended to engage police forces and PCCs, before going out to public consultation on a revised funding model. In response, the then Minister said that he had invited Chief Constables and PCCs to meet him to discuss the review, and a recent meeting of the Senior Sector Group (which includes chief constables) had included a discussion about the manner in which the new model is being developed. The Minister did not set a timeframe for the next consultation, stating that “details of any consultation will be set out in due course and cover a range of issues, including transitional arrangements”.238 The NAO’s recent report criticised the funding formula, stating that it “does not take into account the full range of demands on police time”, and noted that any changes emerging from the Home Office’s review will not be implemented until 2020–21 at the earliest.239
Comments by Government Ministers
161.The Home Secretary, Sajid Javid MP, has indicated that he has some sympathy for the case for a funding uplift, telling the Police Federation’s annual conference that he will “prioritise police funding in the Spending Review next year”.240 Chief Constable Thornton told us in June that work was underway to make a “coherent joint case” for funding for the Spending Review,241 and argued that “there is an obvious place for investment in policing”.242 Areas she identified as requiring specific investment included “technology”, developing “the skills of our staff and officers” and “capabilities such as cyber”.243
162.The Policing Minister told us that he recognises that “the police system needs more resource, which is exactly what it has”, as a result of the additional funding provided since 2015. The Minister pointed to Durham Constabulary as a force that “continue to provide good outcomes despite budget cuts”, and said that it is not “all about resource”. But he nevertheless acknowledged that “the police are very stretched”, and said that “the Home Secretary has made it very clear that he is going to attach priority to policing in the CSR [Comprehensive Spending Review]. There has been a significant change in that direction in response to very clear evidence of demand on the police”.244
163.Sir David Norgrove, Chair of the UK Statistics Authority, has repeatedly emphasised “the need for greater precision in the way numbers are used” by the Government in statements on police funding. In March, he warned that statements from the Prime Minister and the Home Office on the latest police funding round “could have led the public to conclude incorrectly that central government is providing an additional £450 million for police spending in 2018/19.” He recommended that “the Home Office’s Head of Profession for Statistics speak to communications colleagues about the importance of clear public statements about police funding and ensure they understand the structure of police funding.”245
164.The Government must be clear and accurate about police funding, and the resource pressures facing forces. We welcome the Home Secretary’s commitment to prioritising police funding in the next Comprehensive Spending Review (CSR), and the Policing Minister’s clear recognition that the service requires additional resources to enable it to meet changing demands. We agree with them. Policing urgently needs more money. We strongly recommend that police funding is prioritised in both the upcoming Budget and the next CSR.
165.Given the complex challenges outlined in this report, we have no doubt that a failure to provide a funding uplift for policing would have dire consequences. Efficiency savings can only go so far, in the context of the challenges that forces now face: substantial increases in serious violence and volume crime; a rise in complex cases, including child sexual offences and domestic abuse; an ever-growing workload from safeguarding vulnerable people, and an explosion of internet crime, with the evidential challenges that creates. Without extra funding, something will have to give, and the police will not be able to fulfil their duties in delivering public safety, criminal justice, community cohesion and public confidence.
166.We are extremely concerned by the National Audit Office’s recent conclusion that the Home Office does not know whether or not the police system is financially sustainable, and cannot be sure that funding is being directed to the right places. Future investment must be strategic and evidence-based, ensuring that resources are focused in the areas in which they can have the most impact on crime prevention and harm reduction, and not just those areas that might attract the most favourable press coverage.
167.The current model for police funding is not fit for purpose, and should be fundamentally revised and restructured. Such heavy reliance on the council tax precept for additional funding is also unsustainable. It is time to stop kicking this problem into the long grass, and create a funding settlement for forces that is fit for the 21st century, recognising the true cost of policing. This must be based on robust evidence on resource requirements arising from diverse and complex demands. It is also likely to require more resource to be channelled to regional levels, to address the structural challenges outlined later in this report.
168.As we outlined in Chapter 5, the police service is playing an increasing role in managing vulnerability and risk across public services, and many individuals have complex needs which cross organisational boundaries. In Chapter 2, we referred to models involving the co-location of police officers or PCSOs with other agencies, to work on interventions for individuals in greater need of holistic support. The Government should undertake a review of models that enable the police to pool resources with other public agencies, and facilitate these arrangements where they would enable a more joined-up, effective and cost-efficient response.
169.Many witnesses highlighted the challenges created by the short-term approach to police funding. This is an unnecessary obstacle to investment in innovation, and it disincentivises medium- and long-term financial planning. The Government should move to a longer-term funding structure, to enable the service to frontload investment in the technology that will enable it to make the best use of its resources and assets. The Police Transformation Fund is a piecemeal and ad hoc method for funding innovation and new technology in policing, and a much more coordinated, long-term approach is required.
227 National Audit Office, Financial sustainability of police forces in England and Wales 2018 (HC 1501), 11 September 2018
228 The Independent, Home Office in the dark about whether police forces are running out of money, damning report warns, 11 September 2018
230 T/Commander David Clark, National Coordinator for Economic Crime, City of London Police (PFF0003)
235 The advisory group on the national debate on policing in austerity, Reshaping policing for the public, June 2015
236 Home Affairs Committee, Reform of the Police Funding Formula, Fourth Report of Session 2015–16 (HC 476) 11 December 2015
237 Home Affairs Committee, Reform of the Police Funding Formula: Government Response to the Committee’s Fourth Report of Session 2015–16 (HC 1093), 14 March 2017
238 Letter from the Policing Minister, Brandon Lewis MP, to the Chair of the Committee, Yvette Cooper MP, 6 April 2017
239 National Audit Office, Financial sustainability of police forces in England and Wales 2018 (HC 1501), 11 September 2018
240 Home Office, Home Secretary Police Federation speech 2018, 23 May 2018
245 Letter from the Chair of the UK Statistics Authority, Sir David Norgrove, to Louise Haigh MP, 20 March 2018
Published: 25 October 2018