Police forces increasingly reliant on precept funds, IFS finds

17 Nov 15

Police forces in England and Wales are increasingly reliant on locally raised funding as central government grants have been cut back, an Institute for Fiscal Studies analysis has revealed.

While police spending has been cut by 14% in real terms since 2010/11, this is against a 31% real terms increase over the 2000s.

The IFS found this spending increase was largely fuelled by a near doubling of precept revenues, whereas the subsequent cuts have been driven by cuts to central government grants, which have fallen by a fifth.

“There has therefore been a shift towards local financing of the police,” the IFS stated.

“In 2000/01, precept revenues financed a sixth of police spending. By 2014/15, this had risen to nearly a third.”

The think-tank also noted that although the same cut was applied to central grant, because some forces are more reliant on grant funding than others, cuts to spending power have varied considerably.

For example, Surrey Police, which received 54% of its revenues from grants in 2010/11, saw revenue fall by 10% between 2010/11 and 2014/15. However, revenue loss was almost double that at Northumbria Police, which was reliant on central government for 88% of its funding back in 2010/11.

In general, the IFS said those forces that have experienced the biggest cuts to spending are those that saw the smallest increases over the 2000s.

“This is because the forces most reliant on grant funding in 2010/11 were also those that increased their precept revenues least over the 2000s.”

The reason why some forces chose to increase their precepts so substantially during the last decade “remains an important question”, the IFS said.

They suggested it could be because the police funding formula did not properly reflect their relative needs, requiring them to raise more revenue from the precept. Alternatively, it could have been because of greater local appetite for higher police spending.

“Understanding these different motivations is particularly crucial for the Home Office at the moment given it is seeking to reform how central government grant funding is allocated between forces in future,” the IFS concluded.

Speakers and delegates at CIPFA’s police conference earlier this month noted that government plans to join up the governance of police and fire services presented significant problems as to how the two precepts are accounted for.

  • Vivienne Russell

    Vivienne Russell is managing editor of Public Finance magazine and publicfinance.co.uk

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