Following the Government’s announcement in July that it’s now considering a new model of allocating funding to the 43 police forces in England and Wales, the House of Commons’ Home Affairs Select Committee is launching an inquiry into the police funding formula.
The Government has stated that “a new police funding model must be based on an understanding of the drivers of crime and policing demand” and, as such, has identified six key drivers of crime: alcohol, drugs, character, opportunity, effectiveness of the criminal justice system and profit.
However, there are questions – including those emanating from HMIC and the National Audit Office – over the extent to which police forces have a “good understanding” of the demand for their services.
The Home Affairs Select Committee is now inviting evidence on the following questions:
*Does the proposed new funding model via Government meet the ambition of being simple and transparent while also ensuring that funding is disbursed on an equitable basis?
*Do police forces harbour sufficient understanding of the demand for their services?
*Is there agreement with the Home Office’s assessment of the six key drivers of crime indicated in the consultation?
*In the draft new funding model, are the five proposed sources of indicator data sufficient when it comes to capturing the drivers of police demand?
*Should the proposed new funding model include indicators of ‘non-crime demand’? (The Government’s consultation document refers to incidents involving people with mental health issues and child protection as demands on policing have not previously been captured in any funding formula)
*Is the proposed new funding model consistent with the guiding principles?
*Principle 4 of the proposed new funding model seeks to promote improved efficiency. Is it possible for the model to take into account efficiencies achieved in previous years?
*What criteria should be used to determine whether the proposed new funding model is introduced in time to determine 2016-2017 funding allocations and what are the implications of delaying its implementation?
The Committee would welcome views on these and any other matters that may be relevant to the inquiry.
Keith Vaz MP, chairman of the Home Affairs Select Committee, said: “The Government is consulting on a new model for funding police forces which, they say, should be robust, stable, transparent and ‘future proof’. It’s critical that these changes encourage the delivery of Government objectives in crime reduction while minimising the ‘perverse incentives’ that, in the past, have seen under-reporting or the re-categorising of crimes. It’s also important to have a public debate on these objectives such that the final formula is fair for all police forces across England and Wales.”
Financial sustainability of police forces in England and Wales report published
At the same time, Parliament’s Public Accounts Committee has issued its report entitled: ‘Financial Sustainability of Police Forces in England and Wales’.
The Home Office is responsible for allocating grants to Police and Crime Commissioners (PCCs) (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 PCCs fail to carry out their functions effectively.
Members of the Public Accounts Committee are “concerned” that the Home Office lacks all the information it needs to know the impact of reductions in funding on police capability at the local level. Most police forces “lack sufficient information on the current and future demands they face” which is essential for the Home Office, PCCs and the police to ensure forces have the right skills and resources and understand the impact of savings measures.
There’s “limited information” available on the impact of cost reductions made by other Government departments on the police’s workload (otherwise known as cost shunting). It’s also 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 and holds authority over all operational policing decisions and staff. Chief constables report to an elected PCC created to replace Police Authorities*. In consultation with their chief constable, the PCC sets out – by way of an annual Police and Crime Plan – the objectives for their police force, allocates the funding needed to achieve them and holds its police force to account on behalf of the public.
PCCs are funded by central Government via the Home Office 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 2014-2015, police forces spent a total of £12.8 billion. Between 2010-2011 and 2015-2016, central Government funding to PCCs reduced by £2.3 billion (25%) from £9 billion to £6.7 billion in real terms.
Meg Hillier MP, chairman of the Public Accounts Committee, said: “Neither the Home Office nor local police 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.”
Hillier continued: “Central Government funding to Police and Crime Commissioners was cut in real terms by 25% between 2010-2011 and 2015-2016. There’s now understandable concern about forces’ ability to fight crime and focus on the work that matters most to the public. In 2013-2014, 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.”
Changing emphasis, Hillier stated: “There’s 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 the essential information they need to plan for the future – a situation described as ‘startling’ by Her Majesty’s Chief Inspector of Constabulary, Sir Tom Winsor.”
Where it happens, the outsourcing of services to private companies faces “inadequate scrutiny” and, according to Hillier, it’s 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 front line police officers. Devising a new funding formula sensitive to the realities faced by different forces must be a priority for the Home Office.”
In conclusion, Hiller asserted: “The recommendations put forward by the Public Accounts Committee are intended to address what must be seen as a significant failure by the Home Office to provide Police and Crime Commissioners and senior officers with the tools they need to run their forces.”
Summary of Recommendations
*The Home Office’s hands-off approach to police forces limits its ability to ensure value for money. Recommendation: The Home Office should set out how it proposes police forces ought to make further significant savings via structural reforms and also assess the legal implications of changes and possible mergers while having regard to local accountability.
*The process by which the Home Office allocates funding to PCCs 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 Home Office 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 2016-2017 after consulting with the sector. It must announce any changes to the formula as soon as possible to allow forces time for planning ahead.
*The impact of cost reductions made by other Government departments on the police’s workload (ie cost shunting) is not known. Recommendation: The Home Office 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 make certain that the impact of their spending decisions is 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’s not clear who’s responsible for ensuring that there are adequate business skills in place to manage police forces effectively and for spreading Best Practice in this area. Recommendation: The Home Office and the College of Policing 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 Home Office and the police to ensure forces have the right skills and resources to meet that demand. Recommendation: Working closely with the College of Policing, the Home Office should ensure that there’s a common standard for measuring demand and that this is used to provide both comparable and accessible data on all forces. This issue needs to be addressed as a matter of urgency.
*The need for realising 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 Home Office should ensure any outsourcing arrangements undertaken by Police and Crime 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.
*The Metropolitan Police Service and the 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