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Police Funding Settlement

Volume 794: debated on Thursday 13 December 2018


My Lords, with the leave of the House I shall repeat a Statement made in the other place by my right honourable friend the Policing Minister. The Statement is as follows:

“Mr Speaker, I would like to propose to the House a provisional police funding settlement for 2019-20. I do so at a time of real pressure on our police system, with demand rising and becoming increasingly complex and response-intensive. Across the country, police officers and staff are working exceptionally hard in very demanding and often risky conditions. They have, I know, the respect and thanks of this House, but they need more than that: they need additional support to help them do the job.

Last year, Parliament approved a funding settlement that resulted in £460 million of additional public investment in policing. That included £50 million more for counterterrorism and £280 million more for local forces from the precept. This meant that every force’s funding was protected in real terms this year, and overall public investment in policing this year is more than £1 billion higher than three years ago.

As a result of last year’s settlement, most police and crime commissioners set out plans to either protect or enhance front-line policing. I also indicated last year that our intention was to provide a similar settlement in 2019-20, subject to improved efficiency, productivity and financial transparency. I am very pleased to confirm that the police have met those conditions. There is an agreed plan to deliver £120 million in commercial and back-office savings by 2020-21. Forces are developing digital plans, including deploying mobile technology more ambitiously to use police time more productively, and every PCC has published a financial reserves strategy. However, the Government recognise that two things have changed since I stood at the Dispatch Box a year ago.

First, cost pressures have risen. Public sector inflation has increased and the police are facing challenges in meeting new costs, such as forensics and increased employer contributions to safeguard public pensions. More significantly, demand pressures have risen. There has been a major increase in the reporting of high-harm, previously hidden crimes such as child sexual exploitation. The challenge from serious and organised crime networks is growing. Through the serious violence strategy, we are bearing down on the worst spike in serious violence and knife crime that we have seen in this country in a decade. Digitally enabled and online crime is a major challenge for our police. Meanwhile, as we are all aware, the threat from terrorism has escalated and evolved.

The first role of government is to protect the public. As crime changes, so must the police. We are determined to make sure that the police have the powers and resources they need to respond to changing demand. So the Home Secretary and I would like to go further than I indicated last year. As the Home Secretary has signalled over the course of the year, police funding is his number one priority, so he and I have been working closely with our colleagues across government to agree a comprehensive settlement. We are proposing today a settlement that could see public investment in policing rise by up to £970 million in 2019-20, depending on the actions of police and crime commissioners.

Let me break down that very large number for the House. First, instead of the flat cash grant that I indicated last year, we want to increase government grants to police and crime commissioners by £161 million. Every police and crime commissioner will see their government grant funding protected in real terms. This package includes £14 million to recognise the specific extra costs and financial challenges of policing London. On top of this, we will allocate additional grant funding of more than £150 million specifically to help the police to manage unexpected increases in their contributions to public pensions costs since the 2016 Budget.

We have also listened to requests from PCCs for more flexibility around the levels of police precept. So this settlement empowers PCCs to raise council tax contributions for local policing by £2 a month—£24 a year—for a typical household. If this flexibility is fully utilised, the result will be just over £500 million of additional local investment in local policing. We do not take that decision lightly because we know that money is tight for many people. The decision to raise local tax will be up to locally elected PCCs, and they will have to make a case to their electorate and be accountable for the delivery of a return on that public investment.

On top of the proposed increase in the core grant and a doubling of local precept flexibility, we propose investing more in the fight to protect our constituents against terrorism and serious organised crime. As my right honourable friend the Chancellor announced at the Budget, funding for counterterrorism policing will increase by £59 million next year to £816 million— £160 million more than we planned at the last spending review. We also intend to match the new serious and organised crime strategy with £90 million of much-needed resources to tackle threats including economic crime, child sexual exploitation, fraud and cybercrime.

This settlement combines increased central funding with increased local contributions to local policing. It enables the biggest investment in front-line policing since 2010 and the start of the journey to get this country back to living within our means. It will allow PCCs to manage their costs while maintaining their plans to recruit and fill capability gaps, not least with regard to detectives. It will strengthen our capabilities in the fight against serious organised crime and terrorism.

Alongside this increased investment in the front line against crime, we will also maintain our existing level of public investment in building national police capabilities and upgrading police technology for the benefit of local forces. We will invest £175 million in the Police Transformation Fund next year, supporting the police to make the most of the digital opportunity to improve contact with the public and use police time more effectively. We are also developing the first national programme to support stretched front-line officers. We will also support Police Now, which is recruiting fresh talent into policing and detective roles.

Alongside the Police Transformation Fund, we will invest £495 million in technology programmes that will upgrade critical infrastructure such as police databases and the emergency service communications network.

Taking everything together, this settlement means that, as a country, we will invest next year up to almost £14 billion in our police system if all PCCs use full precept flexibility. That would represent increased public investment of about £2 billion compared to 2015-16. With increased public investment comes an increased responsibility to improve efficiency and effectiveness and show the public what difference their investment is making in greater deterrence to criminals, better outcomes for victims and safer communities.

To make the most of the new investment we are announcing today, we will work with the police on four key areas next year to drive efficiency and effectiveness: delivering on the police’s ambition to procure efficiently and share back-office services; working more productively, including through digital mobile working; filling the major capability gaps that the independent inspectorate has identified in detectives and investigations; and making sure there is greater co-operation in the work to tackle serious and organised crime. Of course, support for our police is not all about spending taxpayers’ money. We are also supporting the police through new powers and working on a cross-party basis to strengthen legislation on offensive weapons, just as we worked on that basis to strengthen protections for emergency services workers.

Let me be clear: our commitment to supporting the police to deliver for the public is for the long term. Come the forthcoming comprehensive spending review, the Government will be prepared to invest appropriately in police capacity, capability and professional confidence, but this must come with greater local accountability of directly elected PCCs and a commitment to accelerate the pace of change that is needed to make sure that British policing remains the best in the world. As we have indicated, this settlement is the last before the next spending review, which will set long-term police budgets and address the issue of how resources are allocated fairly across police forces—I know that is of great interest to many Members across the House.

This Government’s priority is the safety of the public. We understand that our police are facing increased demands. We are determined to respond to the threats from terrorism, organised crime and serious violence. We are today announcing a major investment in the capabilities that the police need to respond, and rightly challenging the police to spend that money well and continue on the path of reform and modernisation. I wish to end by expressing my gratitude to our police forces around the country for their exceptional attitude, hard work and bravery. I commend this Statement to the House”.

My Lords, I thank the Minister for repeating the Statement to the House this afternoon. Despite the recognition of the real pressure on our police service in the Statement—it was good to see that—it is disappointing that we have no recognition from the Minister of the Government’s part in creating that demand and pressure on our police and the crisis in public safety. At this stage, I place on record my thanks to the police throughout the United Kingdom for the work that they do 24 hours a day, with great skill, to keep us safe. We are all grateful for that and we very much appreciate it.

No Government in post-war history have ever slashed resources by the amount that this Government have done—by 30%. They have cut officers in each and every year. I recall a debate a few weeks ago when the noble Lord, Lord Blair, who is not in his place, was not challenged by the Minister when he made it absolutely clear to the House that when he was commissioner—we now have Cressida Dick as commissioner—he had many hundreds of millions of pounds more to spend. He could not say how the commissioner today could deliver, given that real cut in resources, compared to what he used to enjoy when he was the commissioner. That was not disputed by the Government.

We have a record level of violent crime. Knife crime has never been as high as it is today. The number of arrests has halved in a decade. Unsolved crimes stand at more than 2 million cases and 93% of domestic violence offences go unprosecuted. It is important that noble Lords see this funding settlement in that context.

The Government have today delivered a ninth consecutive year of real-terms government cuts to the police. In September, the Government announced that changes to the police pension valuation would mean an additional £165 million cost to forces in 2019-20, increasing to £417 million in 2021. Today’s settlement will cover the cost of that pension bill for 2019-20, which is welcome, but provides no certainty for years beyond that. This was dropped on forces at the last minute. Some had started drafting emergency budgets. It was a completely inappropriate way to handle this event, of which the Government must have been well aware. I cannot see how a Government can operate on that basis. So can the Minister commit today to funding the complete pension bill for 2019-20 and 2020-21?

The Government today are once again confirming their intention to pass the entirety of the increase in this settlement on to local council tax payers to fund the police. That is fundamentally unfair. Council tax is a regressive tax, taking no account of income. Despite the fact that every band D or above household will be asked to pay the same amount in additional tax, different force areas will be able to raise different amounts of resources. The forces that have already been cut the most will be able to raise the least. How can the Minister justify that? This is a postcode lottery that means that those communities that are already seeing higher crime will receive much less funding. That cannot be right.

Finally, £160 million has been announced for counterterrorism policing. Can the Minister confirm that it actually amounts to a £59 million increase this year? If the Minister can answer those questions, that would be great but, if she cannot, I will be happy to receive a response in writing.

My Lords, I thank the Minister for repeating the Statement. I should declare an interest as, having been a police officer for more than 30 years, I am a police pensioner.

As the noble Lord, Lord Kennedy of Southwark, asked, can the Minister confirm that the Treasury has increased the amount that police forces have to contribute to police pensions? According to the Association of Police and Crime Commissioners and the National Police Chiefs Council, that will amount to £165 million in 2019-20 and £417 million in 2020-21. The Government are providing £153 million to assist with increased pension costs, which is a shortfall of £12 million in the next financial year, and there is nothing in this settlement for the year after. How are police forces expected to plan ahead when they will potentially have to give back an additional £430 million to the Treasury for police pensions?

In a letter today from the Home Secretary and the Minister of State for Policing and the Fire Service, the Government say that they are increasing the government grant to PCCs, which is,

“the first real terms increase in the Government grant funding since 2010”.

Yet the Statement that the Minister has just repeated says:

“Every police and crime commissioner will see their government grant funding protected in real terms”.

Which is it: protected or increased? If it is the latter, by what percentage in real terms is it being increased? Can the Minister confirm that since 2010 central government funding for the police service has fallen by 30% in real terms, according to the National Audit Office, with overall funding down 19% in real terms, taking into account the police precept?

The Statement says that this year every force’s funding was protected in real terms. A more accurate picture can be given by looking at the picture since 2015. The number of police officers has fallen a further 4%, the number of community support officers has fallen by 18% and the number of special constables has fallen by 27%. Partly as a result of public spaces now being devoid of uniformed officers, knife crime is up 62%, firearms offences are up 30% and homicides are up 33% over the same period. Demand is rising and becoming increasingly complex, as the Government admit. There are crucial capability gaps, particularly in detectives and investigations, and the government response to this crisis is woefully inadequate.

Instead of making real progress in reversing the devastating cuts that this Government have imposed on the police service, they push responsibility for any meaningful increase in police funding on to police and crime commissioners and council tax payers. They say:

“The decision to raise local tax will be up to locally elected PCCs and they will have to make the case to their electorate and be accountable for delivery of a return on that public investment”.

In other words, the Home Office is saying, “Don’t blame us for increases in council tax and don’t blame us if you don’t notice any difference”.

Meanwhile, the Government are wasting millions of pounds propping up the existing out-of-date emergency service communications network while a new network, which relies totally on a commercial mobile phone network, is years behind its planned implementation. What would have happened to our emergency services if the new communication system had been in place by now, as planned, and had been based on the O2 network, which lost all 2G, 3G and 4G connectivity last week?

The police service and the brave officers who put their lives on the line every day to protect us are at breaking point. When will the Government realise that the police service needs a substantial real-terms increase in central government funding and a guarantee to cover all unexpected increases in pension costs in order to avert a crisis?

I thank both noble Lords for the points that they have made. The noble Lord, Lord Kennedy, talked about the Government’s own part in this situation—that is, the funding position that we find ourselves in—and the noble Lord, Lord Paddick, made the very similar point that we had caused a crisis in public safety. I have to say to both noble Lords that 2010 saw the advent of the new coalition Government of the Conservatives and the Lib Dems after one of the worst economic crashes that I have known in my lifetime. Any responsible Government would have had to have taken measures to take that in hand and control it. Both noble Lords are right that funding has been tough, but I could not say that the blame should all be laid at this Government’s door. We have tried to live within our means as opposed to overspending and ultimately creating problems for the next generations through public debt and the deficit.

The noble Lord, Lord Kennedy, talked about how the noble Lord, Lord Hogan-Howe—

I apologise, it was the noble Lord, Lord Blair, who explained how he had a lot more money. Yes, he did; 2010 saw the start of reductions in public spending to try to get our spending under control. It was the noble Lord, Lord Hogan-Howe, who eloquently explained to us how from 2011 to 2013 knife crime actually went down, as did stop and search—and as did his budget. He talked about how police forces can work together, take a much more local approach and engage with communities to understand the problems. He explained that it was not all about funding, although we had got to a point—as I, the Home Secretary and the Policing Minister acknowledged—where funding was becoming tight and demands on the police were rising, particularly in the past one to two years, with some of the unprecedented pressures arising from things such as terrorism.

The noble Lords, Lord Kennedy and Lord Paddick, asked about the pensions position. Yes, it will rise to £160 million in 2019-20. The noble Lord, Lord Kennedy, asked whether the increase was £59 million in relation to counterterrorism funding. I can confirm that. It rose by £59 million to £816 million, which was £116 million more than announced at the previous spending review. It is complicated and I apologise to noble Lords for that, but that is the position.

Both noble Lords asked about certainty beyond that: the eternal question, which I was always frustrated about as a local authority leader. Of course, we cannot give any certainty beyond the next spending review, but the Home Secretary and the Policing Minister have said on a number of occasions that police funding will be an absolute priority, so I can give that certainty to noble Lords.

The noble Lord, Lord Paddick, asked the very good question: is the protected funding just protected or increasing? I can tell him that for 2019-20, government grant funding for all PCCs will be protected in real terms compared to 2018-19 but, separately, the total funding increase of up to £970 million across the policing system is the largest increase in funding since 2010.

Both noble Lords talked about local taxpayers and the impact that this will have on them. I must say that this Government—and, indeed, the coalition Government —have taken a record number of people out of tax altogether, with the basic allowance starting at a much higher level. I think that we have taken 1.74 million people out of tax altogether because of the £12,500 personal allowance, and the national living wage is now £8.21 an hour, which will benefit 2.4 million workers in total. There has been a cut in income tax for 32 million people. I appreciate that local taxpayers will have to pay this increase, but of course their local taxes will go to local services and the tax situation for so many millions of people has been much improved.

The noble Lord, Lord Kennedy, asked about the pension costs in 2019, 2020 and 2021. Obviously, we are providing a comprehensive funding settlement for 2019-20, but the revised total pension pressure is £330 million, and this settlement provides up to £970 million of funding to cover pressures and provide investment. As I said, 2020-21 will be covered as part of the next comprehensive spending review, which we expect next year.

The noble Lord, Lord Paddick, asked me about the comms system. He made a very good point about when O2 was down. I cannot give a definitive answer about precisely when the new comms system will be on board, but I totally get his point—it is a much more efficient system—and, if I may, I shall write to him with any updated position about it.

My Lords, I congratulate my noble friend on this welcome investment in policing at strategic and local level, because both are important. I very much endorse her words of gratitude at this Christmas season for brave police men and women in our country.

I have two questions. Does my noble friend agree that better use can be made of digital techniques and information sharing in the fight against crime and in improving value for money in policing? Good digital methods can help to make money go further. Secondly, can she accelerate the cross-party work that she mentioned on offensive weapons, given the appalling incidence of knife crime that we see up and down the country and in the newspapers far too often?

I thank my noble friend for those questions. Her first point was about better use of digital techniques. In all the efficiency discussions that we have had with the police, that is one of the most important things. The advent of new technology means that the police can spend more time out on the streets fighting crime. As more efficient police services engage with this type of technology, we will see that realised in more police time.

My noble friend makes a good point about a cross-party approach to the Offensive Weapons Bill, which I look forward to discussing across the House. I know that we will have a constructive discussion about that before we debate the Bill and I look forward to hearing from her at Second Reading and beyond, and to her engagement in the process.

My Lords, I thank the Minister for what she said about the rise in the policing precept. She seems to admit that, on the one hand, the Government are giving by reducing income tax levels for people, on the other, passing on the cost of policing to local residents. One is based on ability to pay, but council tax, with the policing precept, is a very regressive tax, so there is an inherent unfairness in that system. I raise the particular consequences for West Yorkshire residents and those in my own borough of Kirklees, and I draw attention to my entry in the register of interests. In Kirklees last year there was a 7.9% rise in the policing precept, and the rise this year is predicted to be 14.7%. That is a 24% rise over two years, not based on anybody’s ability to pay. Will the Minister reflect on whether that is a fair way to raise taxation to pay for policing?

Secondly, police and crime commissioners are supposedly accountable to local people, yet there is no direct way of creating that accountability. I have a suggestion. Currently, the policing precept is an add-on at the bottom of the council tax bill issued by local authorities. Local people obviously just look at the bottom line of what they have to pay. To increase accountability, can the policing precept be billed separately, albeit within the same envelope or digitised method, so that it is clear to residents how much they are paying for policing and how much the Government require them to pay in addition?

I thank the noble Baroness for that question. She mentioned giving with one hand and taking with the other. I talked about general taxation and people being taken out of tax— 32 million people are paying less tax—but there is also the government grant to PCCs, which will be £161 million. I reject her idea that costs are passed on to local people. We all pay tax. I for one am happy to pay local tax, knowing that it will go to my local police in Greater Manchester. She asked about the police precept being billed separately; I put it to her that she would then pass the cost of additional billing on to local people. Different areas can decide how to do things in their own way but an extra bill, even if put in the same envelope, will incur additional costs.

My Lords, in the Statement she repeated, the Minister made it sound as though the sunlit uplands have come into view. That is not the way we see it where I live. The Statement says:

“As a result of last year’s settlement, most police and crime commissioners set out plans to either protect or enhance front-line policing”.

In Colne, the town I come from, the people I represent on the local council ask me, “Why are we paying more for the police when we are having our local police taken away?” Lancashire was in the forefront of developing neighbourhood policing 20 or 25 years ago, and Pendle and east Lancashire generally were in the forefront in Lancashire. We were pioneers. This year, half the community beat managers—the constables who are the actual neighbourhood police officers—are being removed. There are still some PCSOs, but half the police officers on the beat, in the ward and on the street, are being removed. The Minister referred to police officers on the street getting more technological devices and being more efficient; that is no use if they have gone.

What do I say to people when they ask me, “Who is to blame if not you?” I tell them I am not to blame, so they ask me, “Is it the Government, the police commissioner, the police constable?” Who is it? There is no local accountability at all.

I thank the noble Lord for that. The investment in front-line police—whether in neighbourhood or any other kind of policing—is up to the local force. He made the point that technology is no use if the police are gone; he is not incorrect in that, but the savings made from investing in technology can be invested in front-line policing. I hope the settlement, which I think is very generous, means that the police will have more scope to invest in the areas they want to invest in while still looking at efficiencies in procurement and technology.

Since our police and crime commissioners vary so greatly in quality and efficiency, how can the Government be sure that they will use their significant additional resources effectively or provide the greater accountability for which the Statement explicitly calls? In particular, can they have confidence in Cleveland, where Mike Veale, discredited by Operation Conifer in Wiltshire, is now chief constable? Can they have confidence in the Wiltshire PCC, with whom they are at odds over an inquiry into Operation Conifer?

Regarding accountability, particularly for efficiency and effectiveness, HMICFRS tests that across police forces and, ultimately, the public test their PCCs at the ballot box.

Before we move on, I should of course have mentioned in my previous intervention that, like the noble Baroness, Lady Pinnock, I am a vice-president of the Local Government Association. I normally remind the House repeatedly, but in this instance I completely forgot.