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Police Funding (Gloucestershire)

Volume 486: debated on Tuesday 13 January 2009

It is a pleasure to serve under your chairmanship, Mr. Cummings. I know that the Minister for Security, Counter-Terrorism, Crime and Policing, the hon. Member for Gedling (Mr. Coaker), has been taken ill because his office has had the courtesy to phone my office. I wish him the best of health and hope to see him back soon. I am pleased to see that the Under-Secretary of State for the Home Department, the hon. Member for Tynemouth (Mr. Campbell), will be replying instead.

The background to this debate is that the Gloucestershire constabulary faces a tough future in the next couple of years. The funding formula allocation that it has been given by the Government rises by just 2.5 per cent. in each of the next two years, which is right at the bottom of the floor. The specific police grants that the constabulary gets have been frozen, except for the one that funds police and community support officers. That means that the overall settlement is lower still at just 2.1 per cent. Given that the inflation faced by police forces, which is largely outside their control, is running at somewhere between 3 and 3.6 per cent., that represents a real-terms cut and a significant shortfall in funding.

However, council tax payers in Gloucestershire are already hard pressed and we cannot afford to have a large increase in the police share of the council tax precept. Gloucestershire county council has delivered a record low council tax increase and I hope that the police authority will keep its low as well. For the Minister’s benefit, it is worth saying that the county council is working in close partnership with the police and has funded 63 new officers specifically to go out on the beat in Gloucestershire. That is welcomed by the people whom I represent.

Gloucestershire historically gets a poor deal for police funding from the Government and it is in the bottom six police forces for funding per head—£58 a head versus a national average of £81 a head. Even so, the spend per head by the police is about average for England and Wales. The circle has been squared by a higher than average council tax precept, and local people face an unfairly large proportion of the burden because the Government have refused to fund Gloucestershire police fairly. Will the Minister explain why Gloucestershire receives just 70 per cent. of the national average funding per head for its police services, which puts an extra burden on hard-pressed council tax payers?

In November, as I said, the Government confirmed the formula grant allocation rise of 2.5 per cent. for Gloucestershire for the next two years. In response to a request for information for this debate, the chief constable confirmed in a letter to me that

“with the exception of the neighbourhood policing grant”—

the one that pays for PCSOs—

“all specific grants have been frozen…resulting in the total level of Government funding (formula and specific) only increasing by 2.1%.”

That compares to an average increase of 2.8 per cent. in England and Wales, with metropolitan forces seeing an average increase of 3.1 per cent. Yet again, it seems that the figures show that the way the formula works out means that the Government are penalising rural, as opposed to urban, parts of the country.

As I have said, total Government grant will increase by just 2.1 per cent, and my chief constable has said that the cost growth faced by the local police force is about 3.6 per cent. Consequently, that is about 1.5 per cent. above the increase in Government funding. Even if we are generous to the Government and use their estimate of cost growth—the gross domestic product deflator—that still shows cost increases running at more than 3 per cent. Why do we get such a bad deal from that funding formula in Gloucestershire? One of the principles underlying the funding formula averages out the differences between different parts of the police authority area. In a recent article in Policing Today, which I am sure the Minister has read, Gloucestershire’s chief constable, Dr. Tim Brain, explains:

“This principle rewards areas of uniformity in population distribution, density and relative wealth. If…your police authority area is characterised by strong contrasts”—

as is Gloucestershire—

“between partnership areas of high population density and other areas of low density, you tend to lose out.”

When the formula was introduced it was recognised that it was not perfect, so a damping mechanism of floors and ceilings was implemented to ensure that the impact on places such as Gloucestershire was reduced. In their Green Paper, “From the Neighbourhood to the National: Policing Our Communities Together,” the Government confirmed their plans to remove those floors, and the Minister with responsibility for policing has confirmed in the same language used in the Green Paper that they will be removed in due course. He said that it is the Government’s

“intention to move to full implementation of the funding formula at the fastest pace that is compatible with ensuring the financial stability of all police authorities.”—[Official Report, 9 December 2008; Vol. 485, c. 36W.]

Will the Minister explain exactly what that means? Given that most police authorities that benefit from the floors think that their removal will mean a significant reduction in their expenditure, it does not sound as if doing so would be financially stable. However, if that is the case, we will never move to a position where the floors and ceilings are removed. If the Government’s intention is to remove the floors and ceilings, either they believe that it will not have a significant impact on police authorities—I shall be grateful if the Minister will confirm that that is the Home Office’s view—or they are moving ahead regardless of the consequences. The answer to the parliamentary question to which I have referred is simply a tautology and the way in which it is currently written is meaningless.

In a letter to me last July, the chief constable said that

“there can be no doubt that if the financial implications of the Flanagan report and the green paper were followed through there would be a substantial grant cut for forces like Gloucestershire.”

The Minister will know that Dr. Brain leads on financial matters for the Association of Chief Police Officers and is therefore something of an expert on these matters. Will the Minister confirm whether the Department agrees with the chief constable’s analysis of the financial impact on our county’s police force of removing the floors? Is it the case that, as Dr. Brain states in his article,

“it is not at all certain that the current formula is any longer an accurate reflection of the relative needs of authority areas”?

Does the Minister think that the funding formula used to allocate funding accurately reflects the relative needs of different areas?

On some specific funding areas, the security grant is a good example of the Government’s requiring the local police to undertake certain responsibilities but not funding them properly. Between 2005 and 2007, the security grant for royal protection was cut by 9 per cent., but the same demands are still being made of the police. Perhaps the Minister could explain why that is the case and what local services he expects the constabulary to cut. Alternatively, does he expect local council tax payers to pick up the funding for what are essentially national security responsibilities?

Another example is funding for PCSOs. The Government grant provides only 75 per cent. of the funding required, which leaves the constabulary—the council tax payer—to find the funds elsewhere to meet that Government policy. I remind the Minister that, at the last election, the Government promised that 24,000 new PCSOs would be introduced during this Parliament. However, they reneged on that commitment and cut funding by £70 million in 2006. Most of the funding that was left went to the Metropolitan police, which gave local police forces a real problem. In summary, the cost of delivering Government-defined goals is increasing, but funding has been frozen. The Government have demanded that initiatives are followed through, but they have failed to maintain appropriate funding for them. As a result, other services must be cut or further burdens will be placed on local tax payers.

At the same time as funding is being held down, costs are rising. Things are particularly difficult at the moment. The Government have set police pay awards nationally at 2.6 per cent., which is above the rise in the grant given to Gloucestershire, and the crime fighting fund, which is supposed to fund the cost of police officers, has been frozen since 2004. That places a further burden on the police that is completely outside their control. Considering the impact of increased fuel prices and the increased price of imported products procured by the police force because of the weak pound, the chief constable’s estimate is that the police are facing an increase in costs at a rate of about 3.6 per cent., which is 1.5 per cent. higher than the funding that they receive from central Government. That gap has to be made up somehow.

The poor settlement might tempt the police authority to go for the easy option of sharply increasing the council tax precept to cover the costs imposed on our police force by the Government. That would be the wrong thing to do. In this particularly tough economic climate, with household budgets under pressure, it is essential that council tax increases are kept to a minimum, and the police authority must play its part.

I am very grateful to my hon. Friend and constituency neighbour in Gloucestershire for giving way. He makes a cogent case about the financial difficulties that the police face. Does he think that there is a danger in that financial stringency, whereby small police stations in rural constituencies such as his and mine face the prospect of being closed to meet some of the cost pressures?

My hon. Friend makes a very good point. The constabulary has significant cost pressures and is one of the more poorly funded police forces. If it is to do what I have suggested—keep council tax under control and not put a huge burden on local residents—it will have to look across its whole range of spending and make some economies. We do not want front-line police officers removed, but that limits the constabulary’s options, so it may have to look at rural police stations. I very much hope that it does not, and we hope that it is not forced to do so, but there is a real risk. The police authority must play its part in keeping council tax under control. It will be tough, but Gloucestershire residents will expect their constabulary and police authority to look for as many savings as they can without hitting front-line police officers and the front-line policing that we all want.

The county council works in partnership with the local police force. The council will deliver a record low council tax rise this year of just 2.9 per cent., and I hope that the police can aim for that sort of number, although I recognise that the Government’s financial settlement is less generous to the police than it is to the county council.

One very helpful thing has happened. Since 2005, the Conservative administration running Gloucestershire county council has delivered on its commitment to fund 63 new police officers throughout the county—broadly one for every county council division. The final officers will be in place by this May, and the measure has made a real difference by putting in place officers who are used for community policing—getting police out on the beat. They are named officers who are known to their local communities, and the policy has been a significant step forward.

One thing worth remembering, however, is that, because of the extra funding from the local tax payer, the Government like to claim that there are now more police on the street, but in Gloucestershire all of that increase has effectively been funded by the local council tax payer. If it was not for the increase in the council tax precept, we would have fewer police in Gloucestershire today than we had 11 years ago. Further, should the floor to the formula grant be removed, Gloucestershire will lose funding that is equivalent—the chief constable has calculated—to 62 constables, which is almost exactly same number that the county council has funded from the council tax over the past four years. That would be a retrograde step, and particularly damaging for policing in rural parts of the county, where we really appreciate those officers.

I am sure that the hon. Gentleman is not arguing for uniformity of funding per capita throughout the country, because we in Gloucestershire hope that we never need the same police funding as somewhere such as inner-city Manchester; but will he confirm that the scenario that he rightly describes is a developing one, whereby we in Gloucestershire may face either cuts in police resources, or significantly increased council tax bills, or possibly both, and that it will not only hit the rural areas that he has described, but hit hardest some of the least well-off urban neighbourhoods?

The hon. Gentleman is quite right. I would not suggest that every part of the country should get exactly the same amount of money; my contention is that the disparity between areas is simply too large, particularly when the Government place central burdens on all police authorities. Incidentally, Her Majesty’s inspectorate of constabulary and the Home Office judge police forces on the burdens that they place on them; they do not take into account the relative amount of funding that they provide to them. Given that, police authorities should not get exactly the same, because we have to take into account need, but the funding formula does not accurately reflect the needs of different areas, and it is one of the questions that I should like the Minister to address.

On collaborations and mergers, the current state of finances for the constabulary means that it will look to find savings. It is also working with other forces, where that makes sense: for example, it runs the regional intelligence unit based at Clevedon, although a number of forces pay for it. The constabulary works very well, such as in procurement, and on uniform purchasing it is best in class, with low-cost and high-quality uniforms. The best example of collaboration is with other emergency services. There is a tri-service control centre, with control rooms for the police, fire and ambulance services, and it worked incredibly well during the flooding crisis in 2007. It represents a great opportunity for services to work together, but inexplicably, the Government insist on breaking it up by taking away the fire control element as part of an over-budget, behind-timetable and ill-conceived regional project. But enough of that; fortunately for the Minister, it is not his responsibility.

There is some concern that the financial squeeze on constabularies is part of an attempt to force through the back door those police mergers that failed to get through the front door. I challenged the Home Secretary on that issue, and she told me in the House that it was not the Government’s intention to force through mergers, so I should like the Minister today explicitly to rule out any police mergers—either by the front door or the back door—that are forced by a financial squeeze.

In conclusion, this year will be very tough for local policing in Gloucestershire. The Government grant is inadequate when compared with centrally imposed costs, and council tax payers are already stretched and cannot afford to have a large increase in the council tax precept. Gloucestershire county council has delivered a record low council tax rise, and I hope that the police authority will keep its increase low as well; but it would be very welcome if the Minister addressed my questions, so that the people of Gloucestershire might understand why their constabulary is poorly funded and whether the Government intend to do anything to put it right.

I congratulate the hon. Member for Forest of Dean (Mr. Harper) on securing the debate, and I am grateful for his best wishes to my hon. Friend the Minister for Security, Counter-Terrorism, Crime and Policing, who had originally intended to respond to him. If my remarks do not address all the hon. Gentleman’s points, my hon. Friend has agreed to meet him at a future date. That is on the record.

This is a timely opportunity to discuss funding, both nationally and for Gloucestershire, shortly before we finalise the funding settlement for 2009-10. I hope that the hon. Gentleman and others will join me in paying tribute to the police authority, to the chief constable of Gloucestershire, Dr. Tim Brain, and to his force for all their efforts and the very real improvements that they have made to the safety of the people of Gloucestershire. I am sure the hon. Gentleman knows that there was a 19 per cent. fall in recorded crime between 2002-03 and 2007-08 in the Forest of Dean, with a 6 per cent. fall between 2006-07 and 2007-08.

I shall say something about the funding picture generally, before turning to the specifics of Gloucestershire. My hon. Friend the Minister for Security, Counter-Terrorism, Crime and Policing made a written ministerial statement on 26 November 2008, confirming that we intend to implement the funding settlement for 2009-10 broadly unchanged from that which was announced in December 2007. We announced provisional funding totals for three years, incorporating the period from 2008-09 to 2010-11, and police forces and police authorities very much welcome the extra certainty that three-year settlements bring, not least because they will help to improve their medium-term financial planning.

In response to some of the hon. Gentleman’s points, police forces and police authorities in general have welcomed the reduction in the number of targets from central Government and, indeed, the reduction in the ring-fencing of resources. We very much want decisions and resources to be determined locally by police forces and police authorities. Next year’s funding settlement is built on a significant increase in resources for the police since 1997-98, and on a like-for-like basis, Government grant for the police will have increased by 60 per cent., or by more than £3.7 billion, during the period since then.

All police authorities and forces will receive a minimum 2.5 per cent. increase in general formula grant, which makes up the great bulk of central Government support to the police. Those with greater relative need will receive a little more, and if we add specific grants, the overall increase in Government revenue support for policing in 2009-10 will be 2.8 per cent. That is a fair and affordable settlement for all police authorities, backed up by a programme of reform and modernisation and a continuing drive to cut bureaucracy. Chief constables and police authorities have maximum flexibility to make the best possible use of resources.

The hon. Gentleman referred to concern about rising costs over the coming year. In the current economic climate, pressure will intensify on businesses to keep price increases to a minimum. Combined with expected reductions in oil and commodity prices, inflationary pressures are not the main issue facing the UK economy or police authorities.

We have just completed the usual period of consultation on our funding proposals for next year. Consultation closed on 7 January. Gloucestershire police and police authority have chosen not to make representations about the funding settlement. We are currently considering the representations we have received before taking final decisions on the grant settlement for 2009-10. Hon. Members will have the usual opportunity to debate the final police grant settlement in the House in early February.

Gloucestershire, like every other police force, has benefited from the solid funding settlements of the past few years. Assuming that, following the consultation process, the House approves the provisional allocations previously announced, next year Gloucestershire will receive £59.3 million in general grants—an increase of 2.5 per cent. or £1.5 million—and an estimated £9.7 million in specific grants.

As the hon. Gentleman knows, we have said that it is our intention to move to full implementation of the funding formula at the fastest pace that is compatible with ensuring the stability of police forces. Many forces that contribute to the funding floor are now pushing for greater or full implementation of the needs-based funding formula. Not unnaturally, police authorities such as Gloucestershire and my own in Northumbria that are supported by the funding floor want the protection to remain in place. We recognise that the funding floor is important. Gloucestershire has benefited for many years from a funding floor. This year, it receives £2.5 million more than its strict formula share and next year it will receive £2.4 million more.

The damping mechanism operates to ensure that no police authority suffers a substantial change in funding from one year to the next. It is in no one’s interest that one part of the country should suffer a sudden decrease in funding. That would be a recipe for instability. A fine line must be steered to ensure that we have both a stable finance system and that resources are targeted where there is greater relative need. For next year, the 2.5 per cent. grant floor will provide for stability and a degree of scaling above the floor, thus enabling us to target resources on areas with greater relative needs and implement the formula more fully. The hon. Gentleman is correct in saying that we intend to move towards an improved funding mechanism, but let me try to reassure him not only that we are aware of the concerns that he and his chief constable have raised, but that, in moving forward, we want to address those concerns wherever we can.

The Minister is quite right. His own police authority would be one of the biggest losers from a removal of the floor, so from his point of view it is to be hoped that the Government will not be doing that very quickly. He has just acknowledged that the current formula is not perfect. He said that the Home Office wants to move to a new formula and that it does not accept that the current formula accurately meets relative needs. Does it therefore make any sense to push to remove the floors and ceilings, as that would inevitably have a detrimental impact on a large number of police forces? Would not it be more sensible to keep that system, get the new formula in place, which people could accept genuinely reflected relative need, and then move to the new formula?

The hon. Gentleman will know that, once a formula is put in place, over time, as circumstances change, the appropriateness of that formula will also change. From time to time, therefore, in this and other areas, it is the Government’s responsibility to look at the funding formula. By announcing a three-year settlement, which will run until 2010-11, and by consulting on the new funding formula—two meetings have already taken place—we are trying to ensure that the new formula is in place by the time that the next round of finances is announced in 2011. If the hon. Gentleman is asking whether there would be sufficient change with the application of that formula to warrant a mechanism for guaranteeing the fairness that we have tried to ensure in the current funding formula, I am sure that that will form part of the discussion. In moving from one funding formula to the next, we anticipate not only that the formula will be improved, but that it will have built into it a mechanism to ensure fairness.

The hon. Gentleman raised a number of specific points about royal protection and about funding for police community support officers. Let me encourage him by saying that discussions are already under way on what would be the best funding formula for 2011-12 onwards, and I encourage him to take part. The chief constable is already involved, and I urge Gloucestershire police authority and people from other force areas to take part in those discussions. It is in all our interests that we get the very best formula, not just for Gloucestershire, but for the rest of the country, too.

The other important element of police funding, as the hon. Gentleman said, is the contribution made directly by local council tax payers through the police precept. The Government expect the average increase in council tax in England to be substantially below 5 per cent. in 2009-10. We have made it clear for a long time that we will not tolerate excessive increases in council tax. In this difficult economic climate, we will not hesitate to take strong action if necessary to protect council tax payers from excessive increases, including requiring authorities to re-bill if necessary.

Final capping principles will be set out after authorities have set their final budgets, but my right hon. Friend the Minister for Local Government wrote to all local authority leaders on 9 December to say that the Government are prepared to announce the principles in advance if the circumstances suggest that capping may be necessary.

Returning to the position in Gloucestershire, it is only right that local decisions are made locally by the chief constable, who is best placed to decide how to deploy resources. Gloucestershire is a relatively well resourced force, with 1,338 police officers in March 2008—205 more than in March 1997. That is an increase of 15 per cent., which exceeds the overall 11 per cent. increase for England and Wales. The police are also supported by 162 police community support officers and 684 police staff.

The Minister is quite right that Gloucestershire has more police officers, but as I made clear in my remarks, that increase has largely been funded from council tax. Before I was elected to the House, there was a 51 per cent. increase in the police precept in a single year. That was a significant contribution to funding the increase in police officers. If it was up to the national grant alone, there would be fewer police officers in Gloucestershire now than there were 11 years ago.

If it was only up to the national grant and we did not have the systems in place through the damping mechanism that the hon. Gentleman talked about, there might be fewer officers, but I would hate anyone to go away with the impression that the resourcing of Gloucestershire police and police numbers are entirely the responsibility of locally raised funding. The Government continue to put a considerable amount of money into policing, which accounts for the record number of police officers that we have had in the past few years.

The hon. Member for Cotswold (Mr. Clifton-Brown) referred to a police station, and I remind him that the staffing and closure of police stations are operational matters for the chief constable.

We should not focus on officer numbers alone, but on making the best use of officer time. Gloucestershire is doing that. The 57 per cent. increase in police staff since 1997 has allowed the chief constable to improve service quality and to free police officers for front-line duties.

In conclusion, I reiterate the commitment made by my hon. Friend the Minister for Security, Counter-Terrorism, Crime and Policing to meet the hon. Member for Forest of Dean should issues remain for discussion, but I thank him for securing this debate and allowing me to set out the national position and that affecting Gloucestershire. There will be tough decisions ahead, but with the substantial support that the Government have made available, authorities such as Gloucestershire have laid firm foundations and given the police the platform from which to continue the improvements in the service that they provide to our constituents, and I am confident that they will continue do so.