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Police Funding Formula (Wales)

Volume 487: debated on Wednesday 28 January 2009

It is a pleasure to serve under your chairmanship, Mr. Atkinson, and to have secured this debate on an important subject for the people of Wales, and Dyfed-Powys in particular. I have been trying for this debate for some time, and I am pleased to have finally secured it. In November 2007, I led a debate in this Chamber on Dyfed-Powys police, in which I raised the force’s concern that changes to the police funding formula could leave it in a very difficult budgetary position. The Minister who responded to that debate acknowledged some of the challenges of rurality, and I hope that the Minister today will endorse those observations.

I want to talk about the effect of changes to the funding formula in Wales, which is an important issue affecting all Welsh forces. I shall address that later, but hope that hon. Members will understand if I focus the majority of my speech on Dyfed-Powys, which is my local police force and one that has much to lose from the changes. In many ways, not much has changed since the last debate. Dyfed-Powys still has an enviable record that compares well with any force in the UK. It has the highest detection rate of any force in England and Wales, the fifth highest confidence rate among the public of any force in England and Wales and the lowest level of fear among the public.

Like last year, however, the threat of a future funding gap looms large in the authority’s medium-term plans.

I congratulate the hon. Gentleman on securing this important debate. He is right that the performance of Dyfed-Powys police service is fantastic. It has had some great results. However, given the rurality of its area and the comparatively low level of funding per resident, does he recognise that the force faces real challenges in meeting some of the expectations in the policing pledges? The funding settlement being discussed today will make it even harder for it to achieve its policing pledges, especially on things such as police response times.

I shall come to those points later. The hon. Gentleman and I represent very scattered rural constituencies where police response times are a topical debate. The expectations in the policing pledge and the authority’s good intentions might breed a sense of belief. It does an amazing job, but the pledge is unrealistic, which again necessitates the increase in funding, to which I shall return later.

Proposals that when we last had this debate were at least tentative have been reaffirmed by the policing Green Paper. A point that has been made clear by Welsh forces, forces in England and the Welsh Local Government Association is that if the funding formula is to be applied in full, it must be reviewed. The Welsh Assembly Government, in their response to the Green Paper, said:

“Given these factors, the Assembly Government is concerned about how, for Welsh forces, a rapid move towards full implementation of the funding formula can be reconciled with maintaining the financial stability of the four forces.”

I agree wholeheartedly with that particular statement, and hope that, if the Minister will not today commit to retaining the current arrangements, he will at least commit to a fundamental review of the formula to take into account some of the considerations that might be lost by removing the floor that, in part, has safeguarded some of the concerns in the west of Wales.

If the funding formula is implemented in full, the police have estimated that the four Welsh forces would lose a total of £15 million from their current budgets, and that only south Wales would not lose out at all. Dyfed-Powys alone would lose £6 million per annum. Given that its budget for this year is £90 million, and for next year is expected to be just under £94 million, that is not an insignificant sum. It certainly is not a case of trimming a few extraneous projects to make up for the shortfall.

Dyfed-Powys has worked extremely hard to find efficiencies to enable it to focus what resources it has on fighting crime. The authority has identified a further £1.6 million of efficiencies in its budget for 2010-11, mainly through restructuring and work force change, and that is on top of the savings that it made in previous years, which the Minister acknowledged in the previous debate on this issue. Indeed, between 2005-06 and 2007-08, it achieved efficiencies of £9.8 million, well over its target of £7.3 million.

The Dyfed-Powys authority has been innovative in its exploitation of the opportunities for collaboration. Work between the four Welsh forces has provided cost savings and increased their ability to share information. The four forces have a formally constituted committee, the Police Authorities of Wales, which allows them to work together on certain issues. Dyfed-Powys is not an authority desperately trying to cling to its old ways and past certainties; it has done everything asked of it by the Home Office, and more. It has taken a lead on many issues that the Government have sought to instil in the police.

Is my hon. Friend aware that, in line with modernisation, Newtown police station has a new detention centre, which is really up to the minute and as good as anything in an urban environment? The difficulty is, however, that if the police do not have the funding, they will not have the human resources, so the investment in that high-quality facility will be compromised because they will not be able to use it to its full effect.

I certainly endorse what my hon. Friend said about the pressures on manpower. On one occasion, when I was out with the police in north Ceredigion, it was brought to my attention that from 1 am that morning, only one lead officer would be covering the whole of Powys and Ceredigion to deal with fatalities should they unfortunately arise in that whole, vast area of mid-Wales. My hon. Friend makes very strongly the point about staffing. We in Aberystwyth have benefited from a new police station in recent years, but this is not just about bricks and mortar; the public expect police officers on the ground.

What really lies behind the continual debate that we have to have is the complete inability of the Home Office in London to understand rurality. I wonder whether the experience in Scotland is similar, or different because there is a better understanding there. If we devolved police funding to Wales, we would be better able to reflect public service delivery in rural areas.

I thank the hon. Gentleman for that, and I have a great deal of sympathy with what he says, because the perception in Dyfed-Powys is that we are being penalised for our police authority’s great success. There is a lack of understanding of rurality and of the vast distances that challenge us.

When considered against forces in England, the four Welsh forces together cover a much more sparsely populated area. There are unique challenges to policing in rural areas, and, in fairness, the Government have in part recognised that. They introduced the rural policing fund, and, whenever I have raised the subject, Ministers have acknowledged that there are extra difficulties in policing scattered rural communities, and that we need to take rurality into account.

In the previous debate on this subject, I spoke of those particular concerns and of the potential threat to the rural policing fund. Dyfed-Powys receives £2.6 million per annum from the fund, but I understand that there is a proposal to roll all rule 2 grants into one grant that would be distributed to all the forces. For most rule 2 grants, which are paid in some degree to all forces, that is fair enough, and certainly Dyfed-Powys police authority has no great complaints with the idea in principle. The rural policing fund, however, is an entirely distinct fund that is available to considerably fewer forces, including Dyfed-Powys and North Wales, which shares some of our challenges. The fund should remain discrete from the plans to amalgamate rule 2 grants.

In specific terms, Dyfed-Powys believes that it would lose the equivalent of half the £2.6 million it receives, and the North Wales force would also lose a considerable amount, so I should be grateful to the Minister if he could clarify those figures and estimate the effect on the budgets of Dyfed-Powys and North Wales police forces of merging the rural grant with the other rule 2 grants.

On the point made by the hon. Member for Preseli Pembrokeshire (Mr. Crabb), Dyfed-Powys and other rural forces in England and Wales have expressed great concern about aspects of the policing pledge, particularly the target of a 20-minute response time in rural areas. Leaving aside the debate about how targets can distract the police from their core activities, those on the force have made it plain to me that it is impossible for them to achieve that target unless they can divert resources from other areas. I hope that the Minister will advise me how Dyfed-Powys can meet that pledge and, if it cannot, how he will ensure that it will not be disadvantaged as a consequence. I can certainly vouch for the fact that whoever drew up the pledge did not spend a particularly long time in Ceredigion, Powys or the old Dyfed area.

Although police reform is undoubtedly important and we should always continue to strive to improve practice and procedures, I hope that the Minister appreciates that there is a feeling among some forces that they are being required to do more than ever before and, in the case of Dyfed-Powys and many others, expecting to be given less money with which to do it. The Association of Chief Police Officers has identified 30 Government recommendations with uncosted financial implications. There are short-term budgetary pressures as well. Dyfed-Powys believes that a large proportion of this year’s increase will be swallowed up by the new pay award, and there are concerns about rising fuel prices and other inflationary costs that, although they might be easing now, put a dent in the force’s budget.

Many have also expressed particular concern about the arrangements for VAT on fuel. When VAT was cut as a consequence of actions taken in the pre-Budget report, fuel duty was increased to offset the lower VAT on fuel. For those who had been able to claim back VAT, such as police, that effectively meant an increase in fuel duty. I am not for one moment trying to open a debate on Government economic policy, but can the Minister suggest anything that can be done for those who have lost out or, at the very least, say whether the police will be considered when future funding is examined? The cost of fuel has had a massive impact on areas such as Dyfed-Powys, and there are inevitable concerns about short-term funding as well as the medium-term concerns that I identified.

The Minister will be aware that Dyfed-Powys police have been asked to carry out a risk assessment of the likely policing of the Milford Haven liquefied natural gas plant and have accordingly put forward a proposal. It is clearly a significant undertaking. At its peak, the pipeline is expected to carry 15 per cent. of the UK’s energy needs. Policing it will be a crucial and costly task. Although I do not expect the Minister to go into great detail about the bid, I hope that he will acknowledge the concern that if the proposal is not funded in full, it could add another burden to Dyfed-Powys’s budget. Surely, in the interests of national security, that cannot be ignored.

I am sure that the Minister will point to the increased number of officers in Dyfed-Powys police under this Government, which is obviously welcome. However, much of that money came from the crime fighting fund, which was available to all authorities, not uniquely to Dyfed-Powys. Dyfed-Powys made it clear that, with the prospect of losing £6 million from the funding formula, officer numbers might have to be cut. I do not seek to denigrate the overall increase in officer numbers to date, but it is reasonable to point out that if the changes to the formula are approved, much of the good work that is increasingly visible on some of our streets and in some of our villages may be undone.

In summation, like the last time that I expressed my concerns to the Minister, I make no special plea that Dyfed-Powys is more deserving of funds than any other authority; I only say that it is recognised that a successful police authority deserves its fair share and should not be penalised for its relative success. Its rural nature, its current responsibilities and, above all, its first-class record should be recognised fully in future funding settlements.

I congratulate the hon. Member for Ceredigion (Mark Williams) on securing the debate. I hope that he will forgive me for doing as he did and concentrating mostly on Dyfed-Powys.

The hon. Gentleman paid tribute to the police authority and to the work of the chief constable of Dyfed-Powys and his officers, as well as their efforts in reducing crime. I join him in that tribute. As he acknowledged, recorded crime fell by almost 15 per cent. between 2006-07 and 2007-08 in Dyfed-Powys. In Ceredigion’s crime and disorder reduction partnership area, crime fell by a similar amount over the same period. There were significant reductions in violence against the person, which was down by 16 per cent.; domestic burglary, which was down by 6 per cent.; and vehicle crime, which was down by almost a quarter.

The Minister for Security, Counter-Terrorism, Crime and Policing recently confirmed that we are implementing the funding settlement for 2009-10 broadly unchanged from what was previously announced. We originally announced provisional funding totals for three years—2008-09 to 2010-11—in December 2007. My hon. Friend confirmed the figures for 2009-10, with an indicative figure for 2010-11, on 26 November. Police forces and police authorities have welcomed the extra certainty brought by three-year settlements.

Next year’s funding settlement builds on a significant increase in resources for the police since 1997-98. Government grant for the police will have increased by more than 60 per cent., or more than £3.7 billion, during that period. All police authorities and forces will receive a minimum increase in general formula grant—the bulk of Government support to the police—of 2.5 per cent. Those with greater relative need will receive a little more. Including specific grants, the overall increase in Government revenue support for policing is 2.8 per cent. in 2009-10. In our view, that is a fair and affordable settlement for all police authorities. Furthermore, chief constables and police authorities have maximum flexibility to make the best possible use of resources.

We considered carefully all the written representations received in response to the provisional settlement announcement in November. Dyfed-Powys police authority chose not to make any representations.

The Minister says that the overall increase for England and Wales will be 2.8 per cent. Does he have a figure for the increase for Welsh authorities, as compared to the overall figure?

I certainly have the figures for Dyfed-Powys, and I hope before the end of the debate to have the information that the hon. Gentleman requests. If I do not, I undertake to write to him as soon as possible.

Dyfed-Powys has benefited from the solid funding settlements of the last few years. Next year, it will receive £54.4 million in general grants—an increase of 2.5 per cent., or £1.3 million—and an estimated £9.2 million in other Government funding.

I turn to the specific point made by the hon. Member for Ceredigion on the rural policing fund. It includes £3.57 million in special formula grant—a consolidation of three former specific grants, including £2.6 million from the former rural policing fund, which the Dyfed-Powys force has discretion to use as it sees fit.

The hon. Gentleman raised concerns about the future of the special formula grant. Prior to the current comprehensive spending review, we consulted on whether to put that funding back into the formula funding pot, but doing so could have had a major impact on grant distribution. We decided, on balance, to maintain the status quo. The move was widely welcomed by police authorities, particularly by rural forces. In answer to a point that he made, I assure him that the position will be reviewed in full before any changes are made.

In the Green Paper, “From the neighbourhood to the national: policing our communities together”, we said that we intend to move to full implementation of the funding formula at the fastest pace compatible with ensuring the stability of police forces. Many forces that contribute to the funding floor are pushing for greater implementation of the needs-based formula. Police authorities such as Dyfed-Powys and my own police authority, Northumbria, which are supported by the funding floor, want the protection to remain in place. We recognise that the funding floor is important. Dyfed-Powys has benefited for many years from the scheme and next year will receive £6.3 million more than its strict formula share.

The damping mechanism operates to ensure that no police authority suffers a destabilising change in funding from one year to the next. It is in no one’s interest, in any part of England or Wales, for a police authority to suffer a sudden decrease in funding. As the hon. Gentleman knows, the mechanism benefits three Welsh police authorities: Dyfed-Powys, Gwent and North Wales.

For English police authorities, floor damping is made by reallocation of revenue support grant, held for English local authorities by the Department for Communities and Local Government. The Welsh Assembly Government are responsible for revenue support grant in Wales, but do not operate a damping mechanism. Without a grant floor, Dyfed-Powys would lose heavily. So, the Home Secretary provides Welsh police authorities with floor uplifts from Home Office resources on top of the general police grant settlement. The total cost, which the hon. Gentleman mentioned, is £15.5 million in 2009-10, of which Dyfed-Powys gets £5.7 million. That goes part of the way, but I understand that there is a much wider argument to be had on the points raised by the hon. Member for Carmarthen, East and Dinefwr (Adam Price).

Far from threatening Welsh police authorities with grant reductions, we have, with great care, supported police resources in Wales. We have delivered a stable financial system, but have equally targeted some extra resources where there is greater relative need. For next year, the 2.5 per cent. grant floor will provide stability and a degree of scaling above the floor, enabling us to target resources on areas with greater relative needs.

A further degree of formula implementation will not happen overnight. We have promised to review the funding formula for the next comprehensive spending review. I understand that the hon. Member for Ceredigion was looking for assurances in that regard on consultation and taking part in that process.

The police allocation formula working group includes representatives from the Association of Chief Police Officers, the Association of Police Authorities, the Welsh Assembly Government and the force finance director for Dyfed-Powys police, Mr. Andrew Bevan, and meets regularly throughout the year.

We are open for discussion on all areas of concern. I assure hon. Members that there will be a full consultation on proposals in advance of the next comprehensive spending review period.

The Government expect the average increase in council tax in England to be substantially below 5 per cent. in 2009-10. In this difficult economic climate, we will not hesitate to take strong action, if necessary, to protect council tax payers from excessive increases. Local government finance in Wales is, of course, a matter for the Welsh Assembly Government. Ministers from the Welsh Assembly Government have said publicly that they are confident that police authorities will act reasonably in setting their budgets. They are monitoring the position carefully and will take appropriate action to keep council tax increases to reasonable levels.

Dyfed-Powys is a well-resourced force. It had 1,181 police officers in March 2008—176 more than in March 1997—which is an increase of 17.5 per cent. between 1997 and 2008 and significantly more than the overall increase of 11.4 per cent. for England and Wales. The police are also supported by 73 police community support officers and 612 police staff.

We should not focus on officer numbers alone, but rather on making best use of officer time. Since 1997, there has been a 90 per cent. increase in the number of police staff employed by Dyfed-Powys police. That is substantial and a good indicator that the chief constable has used this extra resource to free police officers for front-lines duties.

We remain absolutely committed to neighbourhood policing. We said that we would maintain the ring fence on this funding for the remainder of the CSR period. That should help to ensure that neighbourhood policing is firmly embedded into core policing activity. During this financial year, we are providing £1.56 million to Dyfed-Powys as funding for neighbourhood policing and, especially, to help to pay the salaries of PCSOs. That sum includes an extra element that we have been able to provide to Dyfed-Powys, which means that the 2008-09 provision is 6 per cent. up on last year, while for nearly all other forces the uprating is 2.7 per cent.—the reason being that we exceptionally allocated 12 more PCSOs for Dyfed-Powys in 2007-08 to help to complete its roll-out of neighbourhood policing coverage. The effect of that decision has been to enhance its continuation funding for 2008-09, and it will be uprated for 2009-10, by 2.7 per cent., to £1.6 million.

The hon. Gentleman asked specifically about Dyfed-Powys in relation to national infrastructure and security. The Government keep security arrangements for the critical elements of our national infrastructure under constant review, and the chief constable of Dyfed-Powys police has suggested a number of potential protective security improvements relating to Milford Haven. I can assure the hon. Gentleman of two things: these matters are being considered and we have no intention of ignoring either the issues that he has rightly raised or their seriousness.

In conclusion, I repeat my thanks to the hon. Gentleman for initiating the debate.

I thank the Minister for the fullness of his response, but before he sits down will he address specifically the challenges of the policing pledge? He has talked about increased staff numbers, and I am loth to dispute those figures, but if one considers the workings of the pledge, including the 20-minute response time in rural areas and the requirement for 80 per cent. visibility, and if one compounds that picture with the rurality of Dyfed-Powys, our case for increased resources is vindicated.

I am heartened by the Minister’s comments on the role of Dyfed-Powys in the review group that is considering the future of rule 2 grants, but what about the practicalities of providing that visibility, having police officers on the ground and meeting 20-minute response times?

We have been in close discussion with chief constables and police authorities about implementing the policing pledge, and we are absolutely clear that the pledge is important. We must remember that it comes in two parts, one of which includes the commitments that the hon. Gentleman has mentioned, and that the second part is about engaging with local communities and ensuring that their priorities are reflected in the workings of the police service in their area. Having abandoned all top-down targets except one, on whether the public have confidence in the police in their area, we believe that is the right way forward.

I hope that the hon. Gentleman is not saying that, as an alternative, 80 per cent. of officers’ time in neighbourhood policing should not be spent on the patch, because that is not the message we are hearing from communities, which want more officer time. I hope he is not saying that we should stipulate what the public can expect from police officers, in terms of when they turn up. He might think that we have set very ambitious targets for Dyfed-Powys, but I assure him that we have set ambitious targets for every police force in every police area, because we want to respond, as far as we can, to what the public are telling us they want.

If the hon. Gentleman wants to know where the money is coming from, I should like to point out two things: substantial resources have been put into his area and resources will continue to go to such areas. He might say that there is a case for rural policing, but that is why we have the fund that he mentioned and why we intend to continue with it.

I am grateful for the Minister’s comments about the intention to continue with that rural policing dimension, because that is critical and what the debate is all about. That is the assurance that I had hoped to hear. I hope also that it will be pursued by the group considering rule 2 grants to address some concerns expressed by Dyfed-Powys in the medium term.

The Minister is right to talk about public engagement. This debate is all about meeting the expectations of the public in terms of visibility, response times and giving Dyfed-Powys the staffing and resources that it deserves.

I hope that the hon. Gentleman is reassured by my remarks. I assure him that where forces rely on the funding that he has mentioned, and on our floor mechanisms, we will not take any steps that put that funding in jeopardy. We want sustainable funding to continue the progress being made in his area and others.

Question put and agreed to.

Sitting adjourned.