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Financial sustainability of police forces in England and Wales report published

18 September 2015

The Public Accounts Committee releases Financial sustainability of police forces in England and Wales, its first Report of 2015-16.

Statement from the Chair

Meg Hillier MP, Chair of the Committee of Public Accounts, said:

"Neither the Home Office nor local forces really understand the impact of cuts to local policing.

Too often cuts to services lead to ‘cost shunting' with the police acting as the default support provider. There's little understanding in the Home Office and in many forces of local demands. 

Central government funding to Police and Crime Commissioners was cut in real terms by 25% between 2010-11 and 2015-16 and there is understandable concern about forces' ability to fight crime and focus on the work that matters most to the public.

In 2013-14, forces estimated just 22% of the 7.3 million emergency and priority incidents police responded to were crime-related – and yet no data exists showing the extent to which officers are plugging holes in services that should be provided elsewhere.

There is also no meaningful system for ensuring senior officers have the business skills to properly run the highly complex, multi-million pound organisations under their command. Evidence suggests most forces lack essential information they need to plan for the future – a situation described as ‘startling' by HM Chief Inspector of Constabulary, Sir Tom Winsor.

Outsourcing of services to private companies, where it happens, faces inadequate scrutiny and it is simply not possible to determine whether taxpayers are getting value for money under such arrangements.

Compounding these concerns is a one-size-fits-all approach to funding cuts, which fails to take full account of local circumstances and the diverse demands placed on frontline officers. Devising a new funding formula sensitive to the realities faced by different forces must be a priority for the Home Office.

At a time of ongoing uncertainty over future funding, it is sobering to think the people tasked with making decisions about policing priorities might lack the skills and information to do their jobs effectively. 

Effective policing is a vital public service that offers security and peace of mind to us all.

The recommendations put forward by the Committee in this Report are intended to address what must be seen as a significant failure by the Home Office to provide Commissioners and senior officers with the tools they need to run their forces."

Meg Hillier was speaking as the Committee published its First Report of this Session which examined the financial sustainability of police forces in England and Wales.

The Home Office (the Department) is responsible for allocating grants to Police and Crime Commissioners (who decide how much goes to police forces and how much to other crime reduction initiatives); establishing an accountability framework to assure Parliament on the regularity, propriety and value for money of police spending; and intervening if Chief Constables or Commissioners fail to carry out their functions effectively.

"Department lacks all information it needs"

We are concerned that the Department lacks all the information it needs to know the impact of reductions in funding on police capability at local level. Most police forces lack sufficient information on the current and future demands they face, which is essential for the Department, Commissioners and the police to ensure forces have the right skills and resources and understand the impact of savings measures. There is limited information on the impact of cost reductions made by other government departments on the police's workload (cost shunting). It is not clear how the structural reforms necessary to make expected further significant savings will be made within the devolved delivery model.

There are 43 territorial police forces in England and Wales. A Chief Constable heads each force, with authority over all operational policing decisions and staff. Chief Constables report to an elected Police and Crime Commissioner (‘Commissioner') created to replace Police Authorities (1). Commissioners, in consultation with their Chief Constable: set out in an annual police and crime plan the objectives for their police force; allocate the funds needed to achieve them; and hold police forces to account on behalf of the public.

Funding reduced by 25%

Commissioners are funded by central government via the Department and through the police precept, which is collected alongside council tax in the relevant police force area. Commissioners fund their police force and other crime reduction initiatives. In 2014-15, police forces spent some £12.8 billion. Between 2010-11 and 2015-16, central government funding to Commissioners reduced by £2.3 billion (25%) from £9 billion to £6.7 billion in real terms.

NOTE (1): The Metropolitan Police Service and City of London Police each have their own Commissioner rather than Chief Constables. The equivalent organisations are the Mayor's Office for Policing and Crime and the Common Council of the City of London.

Summary of Conclusions and Recommendations

  • The Department's hands-off approach to police forces limits its ability to ensure value for money.
    Recommendation: The Department should set out how it proposes police forces make further significant savings via structural reforms, and assess the legal implications of changes and possible mergers, while having regard to local accountability.
  • The process by which the Department allocates funding to Commissioners by a formula is ineffective and the results have been subverted by the decision to apply an equal percentage funding reduction to all Commissioners regardless of local conditions.
    Recommendation: The Department should ensure the new funding formula takes proper account of the demand for police services, the scope for savings, local circumstances including precepts, and the levels of reserves. It should introduce the new formula for 2016-17 after consulting with the sector. It must announce any changes to the formula as soon as possible, to allow forces to plan. 
  • The impact of cost reductions made by other government departments on the police's workload (cost shunting) is not known.
    Recommendation: The Department must ensure police forces collect data that allows it to identify the impact on forces of funding reductions elsewhere in government, and work closely with other departments to ensure that the impact of their spending decisions are not borne by the police service. HMIC should identify the scope for joint inspections of services in those areas where cuts may impact on the police.
  • It is not clear who is responsible for ensuring that there are adequate business skills to manage police forces effectively and for spreading best practice in this area.
    Recommendation: The Department and College need to ensure police officers have the requisite business skills to manage police forces effectively and form a joint view on the role and remit of the College in these areas as a matter of urgency.
  • Most police forces lack sufficient information on the current and future demands they face, which is essential for the Department and the police to ensure forces have the right skills and resources to meet that demand.
    Recommendation: The Department, working closely with the College of Policing, should ensure that there is a common standard for measuring demand and that this is used to provide comparable, accessible data on all forces. This needs to be addressed as a matter of urgency.
  • The need to make further savings may encourage forces to make greater use of outsourcing, but even given the devolved accountability system for policing, current oversight for these types of arrangements is inadequate.
    Recommendation: The Department should ensure any outsourcing arrangements undertaken by Commissioners or forces are subject to effective scrutiny. It should also develop a clearer mechanism for assessing the long-term value for money of outsourcing; and encourage arrangements that allow forces to retain the ability to respond to evolving needs.

Further information

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