Police Funding

Background

The UK does not have a single national police force, but rather a series of 43 forces, loosely based on a county structure.

This reflects the origins of the modern police in the 1800s, when responsibility for civil order rested with local magistrates. Following the establishment of the Metropolitan Police in London in 1829, paid for by a 'Police Rate' levy on people living within its area, the next 30 years saw Borough Councils and County Magistrates copy London's example.

Although police forces are subject to considerable control from the Home Secretary and Chief Constables remain responsible for operational matters, Police Authorities have had principal responsibility for police funding. However, the Coalition government decided that from November 2012, Police Authorities should be abolished and replaced with directly elected Police and Crime Commissioners.

Police Authorities were corporate bodies, which raised revenue to fund the operation of their police forces by levying a precept on Council Tax Collection Authorities - District Councils and Unitary Authorities - which was added to local people's Council Tax bills. Police Authorities included nine Councillors from relevant Local Authorities (upper tier only in two-tier areas), three local Magistrates and five independent co-opted members.

In addition, Police Authorities received grants from the Home Office, determined on the basis of the specific needs of their areas. The Home Secretary issued an overall police strategy and Police Authorities were provided with funding broadly to pay for meeting the strategy's objectives.

The Police and Magistrates' Courts Act 1994 increased the Home Office's control of Police Authority activity by imposing a statutory requirement to publish a local policing plan, with details of objectives and targets for the coming year, which had to be consistent with the Home Secretary's 'Ministerial Priorities'.

The Police Reform and Social Responsibility Act passed in September 2011 provided for Police Authorities to be replaced with directly elected Police and Crime Commissioners. The new Commissioners, elected on 15 November 2012 to take office from 22 November 2012,  will have responsibilty for setting the policing budget and for deciding how much to raise from local council tax for the police.

Controversies

Police funding is a controversial matter. Police numbers fell during the 1980s and 1990s, as 'bobbies on the beat' were replaced with vehicle patrols. Despite an increase of 15,000 between 2000 and March 2004 to reach a record level of 138,000, people remained convinced that there were fewer visible police officers on the streets deterring criminals.

Addressing police numbers is a difficult matter. It is a matter for Chief Constables, not the Home Secretary, who can only advise. Recent years have seen a greater reliance on Special Constables and the introduction of Community Support Officers to address the problem, generating concern about a lack of training and experience.

Police Authorities frequently voice concerns about the Total Standard Spending (TSS) figure produced by the Home Office, claiming that it does not cover increasing costs, while the Government maintains that police funding is rising.

Particularly controversial are 'top slicing' by the Home Office - the allocation of funds from the central grant directly to national schemes, such as the Airwave communications project - and the replacement of general grants with specific grants, 'ring fenced' for particular purposes. This sort of complaint, however, is endemic to the centre-local relationship, and is found more widely within local government and the NHS.

The cost of the police pension scheme is another cost for forces, particularly as early retirement is commonplace among police officers and their funded occupational pensions, which increase annually, are a drain on resources.

Cuts to police funding announced in the October 2010 Spending Review as part of the Government's programme to tackle the huge deficit also attracted considerable controversy. Funding is set to reduce by 20 per cent in real terms by 2014/15 or 14 per cent if council tax precepts are taken into account.

The Treasury claimed that by cutting out costs and scrapping bureaucracy, "hundreds of millions of pounds and hundreds of thousands of man hours" would be saved, and the funding cuts, therefore, "should not lead to any reduction in police officers visible and available on the streets."

However, ACPO felt the cumulative impact of the cuts would "translate into fewer police officers", and Labour claimed the cuts would mean "thousands fewer police officers" which would "undermine the fight against crime..and the safety of our communities."

Further controversy was created by the decision to replace Police Authorities with directly elected Police and Crime Commissioners. Elections were set to be held on 15 November 2012 in England (excluding London) and Wales, with the new Commissioners taking office on 22 November in 41 police force areas.

Although the Police Authorities had opposed the change, they were commended by HMIC who found authority members were "determined to leave a strong foundation and positive legacy for the incoming PCC, with many examples of individuals willingly taking on extra responsibilities to help secure this – even though their tenure with the authority will shortly end."

However, in September 2012, HMIC found there was still "a considerable level of uncertainty involved in developing budget proposals and financial plans."

Police authorities are funded from two key sources: central government grant and precept. HMIC noted that the Government had given an indication of the likely settlement, but that this would not be formally announced until after the Autumn on 05 December, and suggested that both the consequence of adjusting the settlement in light of the pay restraint and the outcome of the government’s review of damping "make the settlement uncertain."

HMIC found that all forces were "taking a cautious approach to their assumptions in these areas."

Statistics

Central government police funding will reduce by 20% in real terms by 2014-15. If Police Authorities were to choose to increase precept, part of council tax, at the level forecast by the Office of Budget Responsibility, the SR settlement means that on average police budgets would reduce by 14% in real terms over the next four years.

Counter-terrorism specific policing will be protected with a smaller percentage cut than overall police funding of 10% in real terms and we will ensure the right funding is in place to deliver a safe and secure Olympic Games in 2012.

The UK Border Agency's budget will be cut by up to 20% over the next four years. The agency will save around £500 million in efficiencies by reducing support costs; improving productivity and value for money from commercial suppliers. It will also invest in new technologies to secure the border and control migration at a lower cost. An increasing proportion of the costs of controlling immigration and securing our border will be met by migrants and visitors to the UK.

We will abolish the National Policing Improvement Agency saving at least £50m.

Source: Treasury, CSR - October 2010

HMIC review of police force and authority preparedness for the 2011/12 – 14/15 CSR period:

The October 2010 Comprehensive Spending Review (CSR) outlined a 20% cut in the central government police funding grant for all 43 forces in England and
Wales by 2014/15 (in real terms).
Police forces and authorities had generally made reasonable assumptions about the financial challenge ahead, and used these to work out their budgets
for the next four years.
Across England and Wales, they estimate they will need to save £2.1bn cash by 2014/15. This translates to an estimated £1.9bn at 2010/11 prices and 14% of their gross revenue expenditure (GRE) in real terms. However, the cuts vary significantly between forces: from 8% to 19% of GRE in real terms.

Forces started to reduce the size of their workforce in 2010/11 in preparation for the CSR cuts.
Estimated force data suggests that the police workforce in England and Wales will reduce as shown in the following table (numbers have been rounded).
March 2010–March 2015
Police officers 16,200
PCSOs 1,800
Police staff 16,100
Total 34,100

We estimate that this reduction would result in savings of approximately £1.6bn, and take the overall size of the workforce back to its 2003/04 level (with officer
numbers reverting to 2001/02 levels).
Detailed data from 42 forces suggests that between March 2010 and March 2012 frontline numbers will fall by 2% and non-frontline numbers will fall by 11%.

Looking ahead, maintaining the planned level of protection to frontline/operational numbers of the workforce over the whole CSR period will be very challenging – especially over the next 18 months, as two-thirds of the cuts to central Government funding falls within the first two CSR years (2011/12 and 2012/13).

As outlined above, we estimate that £1.6bn of the total estimated budget cut of £1.9bn facing the service could be met by the proposed workforce reduction.
This leaves a balance of £0.3bn to be found from the money forces spend on non-pay costs, which equates to a 12% reduction.

Forces' capacity to cut crime and ensure officers are visible and available to the public can only be sustained if the proposed workforce reductions of around
34,100 are balanced out by compensating improvements in efficiency.

The data for March 2010 to March 2012 suggests that, on average, a relatively modest improvement in frontline efficiency is needed for that period, as the
predicted loss in frontline numbers is only 2%.

Source: HMIC report 'Adapting to Austerity' - July 2011
 

Quotes

"A key responsibility of the PCC is to set the annual budget and police component of the council tax precept. After PCCs take office they have a tight timescale to set a budget and the level of the precept for 2013/14 which is year three (out of four) of one of the most challenging funding settlements the police service has faced."

HMIC - September 2012