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Police: Pensions

Volume 474: debated on Tuesday 1 April 2008

To ask the Secretary of State for the Home Department (1) how much was spent on the police pension scheme in each year since 1980-81; what forecasts she has made of how much will be spent in each year between 2007-08 and 2050-51; how many members of the scheme there are; and if she will make a statement; (195690)

(2) what the cost of pension provision to each constabulary was in each year since 1997; and what percentage of the budget of each force this represented in each of those years.

The information requested on the total cost of police pensions and on the cost of pension provision as a share of police spending for each constabulary for the years before 2006-07 is not held centrally as the administration of the police pension schemes is the responsibility of individual police authorities. Information on financial statistics, including expenditure on police pensions and overall spending, for police forces is included in the annual reports published by the Chartered Institute of Public Finance and Accountancy (CIPFA). This information is gathered independently of the Home Office.

However, the system for financing police pensions changed on 1 April 2006. Under the new system, police authorities no longer have to meet the cost of pensions in payment out of their operating accounts. Police authorities now have a separate pensions account for this purpose, into which are paid officers’ contributions and a new employer’s contribution. Where the pensions account does not have enough funds to meet the cost of pensions in any year it is topped up with a grant from central Government; any surplus is recouped. A key benefit of this change is that it takes away from police authorities the responsibility for meeting the rising cost of pensions in payment as a result of an increase in the number of pensioners.

Figures from the annual police pensions financing reporting cycle show that based on police forces’ unaudited accounts for 2006-07, the estimated pensions expenditure from forces’ pensions accounts under the new system across the service was £1.96 billion—£1.46 billion net of the contributions made by serving officers.

The following figures are the most recently published projections of total future expenditure on police pensions in England and Wales, net of the contributions made by serving officers. These were produced by the Government Actuary’s Department (GAD) as part of the consultation process on the new system for funding police pensions in 2005. GAD advise that in view of the time elapsed since the figures were produced they should be viewed only as indicative as the likely future trend of police pensions expenditure. No projections are available for 2013-14 to 2050-51.

The following table outlines figures for the expenditure of each police force on employer contributions for police pension purposes, based on their unaudited accounts, set against each force’s budget requirement for 2006-07 as a percentage.

Membership figures are not held centrally, but we estimate that there are approximately 140,000 active members of one or other of the two Police Pension Schemes. We also estimate that there are approximately 120,000 police pensioners, including survivor pensions, and a further 20,000 police deferred pensioners. This gives a total estimate of 280,000 members of the police pension schemes.

Financial year

Estimated pensions expenditure (£ billion)

2007-08

1.61

2008-09

l.74

2010-11

1.88

2011-12

2.00

2012-13

2.25

Financial year 2006-07

Police force

Budget requirement 2006

Un-audited accounts 2006-07 Employers contributions (£000)

percentage of budget

Avon and Somerset

236,729,347

26,609

11.240

Bedfordshire

87,335,239

210

10.546

Cambridgeshire

110,474,455

11,253

10.186

Cheshire

150,305,000

17,097

11.375

City of London

61,206,000

7,556

12.345

Cleveland

114,975,143

113,156

11.442

Cumbria

90,328,000

9,866

10.922

Derbyshire

145,328,989

15,829

10.892

Devon and Cornwall

246,273,836

27,233

11.058

Dorset

103,055,700

11,725

11.377

Durham

102,583,311

13,432

13.094

Dyfed-Powys

79,892,792

9,575

11.985

Essex

231,985,273

24,944

10.752

Gloucestershire

91,489,400

10,204

11.153

Greater Manchester

503,504,176

61,560

12.226

Gwent

106,054,899

11,507

10.850

Hampshire

269,722,000

13,060

10.568

Hertfordshire

164,225,494

7,161

9.812

Humberside

158,052,928

7,716

11.216

Kent

247,311,000

12,474

11.302

Lancashire

239,533,000

12,380

11.585

Leicestershire

148,270,715

17,331

11.689

Lincolnshire

86,492,378

9,439

10.913

Merseyside

296,426,757

34,294

11.569

Metropolitan

2,425,700,000

254,974

10.511

Norfolk

124,672,108

12,503

10.029

Northamptonshire

105,398,000

10,286

9.759

North Wales

118,675,632

12,600

10.617

Northumbria

260,475,000

31,672

12.159

North Yorkshire

122,894,000

12,915

10.509

Nottinghamshire

170,490,070

19,629

11.513

South Wales

222,649,897

25,908

11.636

South Yorkshire

230,581,818

26,240

11.380

Staffordshire

164,024,687

18,053

11.006

Suffolk

97,352,382

10,259

10.538

Surrey

172,396,784

14,973

8.685

Sussex

227,247,669

24,035

10.577

Thames Valley

329,137,246

32,224

9.790

Warwickshire

76,560,000

8,198

10.708

West Mercia

176,766,000

18,670

10.613

West Midlands

501,612,139

61,670

12.294

West Yorkshire

380,196,015

43,344

11.400

Wiltshire

91,633,000

9,722

10.610