07 January 2000
As government ministers begin assessing departmental spending needs for their second Comprehensive Spending Review, now known as SR2000, police authorities are preparing a submission to Home Office ministers that will call for an end to years of persistent police underfunding.
Meanwhile, Metropolitan Police commissioner-designate John Stevens has warned that the London force faces a recruitment crisis. A survey of 6,000 officers across the country showed that many would quit the force if they could get an outside job at a similar rate of pay.
The submission, by the Police Service Forecasting Group, which negotiates with the Home Office on behalf of police authorities, will be presented later this month.
A draft of the report, seen by Public Finance, claims that current levels of funding have been insufficient to retain staffing levels and allow anything other than minimal investment in new technology, equipment and assets. 'As we enter the new millennium,' the report says, 'the opportunity to modernise the police service must be grasped.'
The group claims it is not asking for a significant increase in police resources, only a fair and reasonable settlement. But, to those unfamiliar with the particular financial difficulties facing police authorities, the numbers will seem ambitious.
On the basis of a survey of all 43 authorities in England and Wales, the groups says an extra £1.2bn as a minimum is needed over the three years, starting from 2001. This increase in revenue funding, which takes account of cashable efficiency savings, is almost twice the £675m cumulative increase provided by the first comprehensive spending review.
Forces are already spending well above government guidelines, using reserves and high council tax rises to make up the difference. But the position is not sustainable.
According to Bill Wilkinson, the group's chief negotiator, the biggest problem is pay and pensions, which together account for some 83% of the service's costs.
Police pay is dictated by a national formula that has often set pay levels well above inflation. The unfunded pension scheme's deficit – the difference between pensions paid out and contributions from existing employees – will exceed £1bn for the first time in 2000/01. This deficit will increase by an estimated further £250m over the three subsequent years. According to the group, this £250m equates to nearly 10,000 police officer posts, twice the number being funded through the recently announced crime-fighting fund.
Pay, pensions and price inflation account for nearly £1.1bn of police authorities' minimum claim for additional funding in SR2000. The rest is made up of funding to address the repairs backlog, to meet crime reduction targets and to comply with new legislative requirements, such as those from the Macpherson Report.
'Unless the government funds the unavoidable costs of pay and pensions, for the service to meet everything that is being thrown at it, it would have to cut back,' said Wilkinson. Significant savings can come only from reducing police officer numbers.
The government argues that the global spending totals do not tell the whole story and that current spending plans assume 2% efficiency savings each year. A 2% saving across the whole police budget is worth some £140m and would go some way towards closing the gap between government funding and service needs.
But while forces are on schedule to hit their savings target this year, only just over half those efficiencies will be cash releasing. The remainder would simply avoid additional expenditure. By 2001/02, the group estimates 36% of efficiency savings will release no more than £53m in cash.
As well as the boost to revenue funding, police authorities want a major increase in capital allocation. The allocation for 2000/01 – a combination of Home Office grant and credit approvals – is £144m. This compares with forces' investment plans of £349m. These plans rely heavily on capital receipts and contributions from revenue.
But, worryingly, a £41m segment of the plans has no funding from any conceivable source. This gap is set to widen to £80m by 2002. Yet even these plans are heavily constrained by forces. The group estimates £442m, £443m and £407m, respectively, is what is really needed to bring infrastructure to an acceptable level in each of the three years starting from 2001.
Failure to invest in modernising the service is also restricting authorities' ability to make the very efficiency savings the government is demanding, they say. New stations and equipment are, in many cases, the key to improving efficiency. 'If the government doesn't pump money into capital it will be like trying to improve efficiency with one hand tied behind your back,' said Wilkinson.
According to Ian Thompson, the group's convenor, the government must accept that the claim for £1.2bn is a minimum requirement and that it takes no account of the investment in IT and communications technology that the Home Office wants to see.
PFjan2000
