Financial sustainability of police forces in England and Wales Contents

Conclusions and recommendations

1.The Department’s lack of a comprehensive picture of all the demands forces face undermines its ability to know what resources forces need. The police’s main duties are to protect the public and prevent crime. But only about a quarter of the emergency and priority incidents that the police respond to are crime-related. This Committee said in 2015 that the Department should develop better information on the demand for police services across all forces. The Department has improved its understanding of how much it costs forces to respond to crime related incidents. But there remains no national comparable data on how much it costs police forces to respond to non-crime related incidents, such as responding to mental health crises. This limits the Department’s ability to make informed funding decisions. We welcome the Force Management Statements introduced by HM Inspectorate of Constabulary and Fire & Rescue Services (HMICFRS) which should improve forces’ own understanding of the demands on their services. But it is going to take a long time before these statements provide comparable data that can be used to create a national picture of what forces need to deliver an effective service, and it has already been three years since we heard that these statements would be the answer to the issue.

2.Recommendation: The Department should develop better measurements of both crime and non-crime demand for police services and use these to inform their bid for funding in the next Spending Review. HMICFRS should write to the Committee setting out insights of the demands on police services drawn from the first set of Force Management Statements within three months.

3.Forces are finding it harder to deliver an effective service and there is a risk that problems with forces’ financial sustainability may not be spotted soon enough. Forces are operating with nearly 50,000 fewer members of staff, including 15% fewer officers, than in 2010. Forces are struggling to deliver an effective service: it is taking longer to charge offences; they are making fewer arrests; they are doing less neighbourhood policing, and public satisfaction is declining. Increasing numbers of police staff are experiencing poor mental health. Forces are selling off more of their assets to try and raise some funds for capital investment and increasingly drawing on their reserves. The Department assessed forces’ financial resilience in 2017 and is doing so again as it prepares for the government’s next Spending Review. But the Department’s approach to assessing forces’ financial sustainability does not provide the systematic and regular monitoring that we would expect. The Department relies on HMICFRS to tell it whether forces are efficient and effective, but HMICFRS does not assess forces’ financial sustainability. We are not convinced that the Department would be able to say, at any given time, how financially healthy the police system is, or which forces are most at risk of failing to deliver an effective service because of their financial position.

4.Recommendation: Following on from its 2017 assessment of financial resilience, the Department should immediately establish a regular review process for assessing forces’ financial sustainability. It should set out how it will use information and data collected by HMICFRS to inform its assessment.

5.Even though the Department’s approach to allocating funding to Commissioners has been out-of-date and ineffective for several years, the Department still has no firm plan to change it. The formula the Department uses to calculate how much funding forces should receive from central government is out-of-date and needs reforming. The Department accepted this in 2015, describing it as detached from the real demands on policing. The Department did start some work to review the funding formula, but that work stopped in early 2017. Now, more than three years after accepting that the formula needed to be changed, the Department has no firm plans in place for actually doing so and tells us that reform of the funding formula cannot be rushed. In the absence of a proper formula, central government funding to local forces has been subject to crude cuts across the board, which do nothing to take account of the complexities of local circumstances. Currently there are huge differences in funding between areas. Local taxpayers are compensating for the 30% central government funding cuts, while seeing less policing. The Department needs to change the formula so that it takes account of all the demands on police forces, funding from local taxation, forces’ efficiency and their financial resilience.

6.Recommendation: The Department must urgently commit to reviewing the funding formula, and after consultation, deploy a new funding formula as soon as practicable.

7.The Department takes away 11% of police funding to fund national programmes, but we are not convinced that this ‘top-slice’ on funding is used effectively and projects face a ‘cliff edge’ when funding runs out. In 2018–19, the Department ‘reallocated’ £945 million of central government funding for commissioners—a top-slice of 11%—to be spent on national priorities. Some £495 million of this top-slice funds police technology programmes, including the development of the Emergency Services Network (ESN) which, in June 2018, was at least 15 months behind schedule. Eventually, the ESN is supposed to save £200 million a year, but not before the Department spends over £1 billion extending the old Airwave system. Delays to the introduction of the ESN have cost forces money as they are having to continue spending money running the Airwave system. Other national programmes funded by top-sliced funding include Special Grants and the Police Transformation Fund. Projects funded by each of these can face a ‘cliff edge’ when national funding runs out and it is difficult to keep projects going locally out of already very stretched budgets. Furthermore, police transformation funding has not always been distributed in time for forces to use it effectively. The Department recognises that the police transformation fund has not worked as well as it should have and claims to have made improvements to the process for getting funds to forces more quickly. But we are not convinced by the Department’s approach of top-slicing transformation funding from the total police budget and then distributing it to a small number of projects, rather than allocating it to forces to manage themselves.

8.Recommendation: The Department should set out how it plans to improve the delivery of national projects, in particular by streamlining its processes and fully engaging with forces and others when developing support products that will be used by them.

9.The Department does not have its own national, long-terms strategy for policing and as a result there is no clarity about how it will support forces to deliver Policing Vision 2025. The Department says that it supports ‘Policing Vision 2025’, the strategic direction for policing set by forces themselves. It stresses the importance of that being a police-led strategy and its own role for setting national priorities, such as for cyber-security and counter-terrorism, and has no overarching strategy of its own. Yet forces do not feel that they are properly supported and want to see more serious commitment from the Department to support them in delivering the vision. No-one is suggesting that the centre should be telling forces what to do and getting involved with operational or day-to-day decision making. But it is not incompatible with the devolved model of policing and local accountability, and indeed would complement it, for the Department to have its own long-term plan for policing. Such a plan would include setting out how it will support police forces to be financially sustainable, as well as making the wider support that forces can expect clear to all. We heard of the example of council tax harmonisation when forces are seeking to merge, an issue that cannot be resolved locally and has prevented mergers taking place, which is crying out for the Department to step in and show more leadership. There is also a gap in the Department always being clear which activities, such as transformation funding, are best funded at a national level and which are better channelled directly to forces.

10.Recommendation: Within 12 months the Department should develop its own national strategy to complement Policing Vision 2025, setting out what support forces can expect from the Department in the context of a local accountability model, which activities will continue to be undertaken and funded at a national level, and why.

Published: 7 November 2018