Police Pension Liabilities

Baroness Williams of Trafford Excerpts

Tuesday 6th November 2018 Lords Chamber

[The Minister of State, Home Office (Baroness Williams of Trafford) (Con)]

My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer given by my right honourable friend the Minister for Policing and the Fire Service to an Urgent Question in another place on police pension liabilities. The Statement is as follows:

“It is important that public sector pensions are affordable for the long term. That is why the Government announced changes to the discount rate at Budget 2016 and Budget 2018. These are based on the latest independent Office for Budget Responsibility projections for future GDP growth.

This change will lead to increased employer pension contribution costs for all unfunded public sector pensions, including police forces. Budget 2018 confirmed that there will be funding from the Reserve to pay for part of the increase in costs for public services, including the police in 2019-20. My officials are in discussions with representatives from the NPCC and the APCC to discuss how this additional funding will be distributed. Funding arrangements for 2020-21 onwards will be discussed as part of the spending review. As the Chancellor made clear at the Budget, the Government recognise the pressures on the police, including from the changing nature of crime, and we will review police spending power ahead of announcing the police funding settlement for 2019-20 in December”.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, my honourable friend in the other place, the Member for Bradford South, Judith Cummins MP, first raised this matter with the Prime Minister at Prime Minister’s Questions on 24 October, and received a less than satisfactory answer, to say the least. Following that answer from the Prime Minister, the National Police Chiefs’ Council and the Association of Police and Crime Commissioners issued a joint statement in the names of Chief Constable Sara Thornton and Police and Crime Commissioner Mark Burns-Williamson. Their statement backs up the question from the Member for Bradford South and makes clear that the first notification which enabled forces to calculate the impact of pension changes came in September 2018. The impact of the changes risks a reduction in the number of police officers at a time of rising crime. It is not good enough to say today that some funding will be available, unless the issue is tackled comprehensively. The only people who will welcome the situation are the criminals, as there will be fewer police officers to tackle them and bring them to justice.

[Baroness Williams of Trafford]

My Lords, I thought that there might be a question in there, but there was not—it was a statement. I do not think the noble Lord asked me a question, but I acknowledge the points that he made. He may be aware that my right honourable friend the Policing Minister has absolutely pledged to work with the Treasury and the NPCC to ensure that the funding needed to service the pensions will be forthcoming. Additionally, on the police budget itself, he has pledged to review police spending power ahead of announcing the police funding settlement for 2019-20 in early December.

[Lord Dholakia (LD)]

My Lords, I thank the Minister for repeating in your Lordships’ House the Answer to an Urgent Question asked in the other place. I think that the Answer reflects two issues, the first of which is the implications for the police budget. It is estimated that the loss of more than 10,000 officers from an already badly overstretched service would lead to an increase in crime and pose a serious threat to the criminal justice system. This is happening at a time when knife crime has increased by 62%, firearms offences by 30% and homicides by 33%. We are now hearing an interesting debate in policing among people such as Sara Thornton, backed by Cressida Dick, who are talking about dealing only with serious crimes, as against the former chief constable of Nottinghamshire, who has talked about dealing with the other issues as well.

Does the Minister accept that public confidence in the police is shaped by the quality of the service they provide, but that their ability to provide that service is fairly limited? If we disturb the tripod of police commissioners, who represent the community, the local police force, which represents itself, and the Home Office, which may face a judicial review on this matter, it is unlikely to build public confidence in how the service operates. What does the Minister have in mind for the future of policing in this country in the light of the substantial cuts to police pensions? The effects of such cuts last for eight or 10 years. As early as the 1980s, when I was a member of a police authority in Sussex, the impact on resources of the police contribution to pension funds was pretty clear.

[Baroness Williams of Trafford]

My right honourable friend the Policing Minister has absolutely recognised the impact on police funding of the pension contributions. He will therefore be working with both the Treasury and the police to come to a solution very soon to ensure that police forces have the resources they need to service the pensions of their police officers. In addition, my right honourable friends the Chancellor in his Budget, along with the Policing Minister and the Home Secretary, recognised the changing demands on the police and will be working towards a comprehensive settlement for 2019-20.

[Baroness Donaghy (Lab)]

My Lords, when people enter a pension scheme in the public sector, as anywhere, they have expectations. They also expect a certain amount of notice of any changes and to be told whether increased costs will impact on their job security. This does not seem to have been handled all that well—but that is not the nature of my question, which is: will the police be fully consulted? Will the Police Federation be fully consulted? Will there be decent notice of any proposed changes to the police pension scheme?

The Minister talked about the changing nature of work, but people have built up their pensions over many years and have expectations about what they will get at the end of their career. We would not want any unintended consequences such us people applying for early retirement when they see little hope of enhancement in the future. Will she give some information about what consultation will take place with the Police Federation to give sufficient notice to the police of any changes?

[Baroness Williams of Trafford]

The Budget in both 2016 and 2018 made the changes clear, but the discount rate has changed as growth predictions have changed. Demand on the police has changed. Those two factors are absolutely clear. On consulting the Police Federation and, indeed, the police, my right honourable friend the Policing Minister is working with both the police and the Treasury to ensure that pensions can be serviced. As the noble Baroness said, we do not want police officers feeling that they have to retire early. That should not be the case, so we will be working hard with both the police and the Treasury to ensure that the pension will be fully serviced.

--- Later in debate ---

[Baroness Williams of Trafford]

I have not seen the guidance, but I can certainly say that the Policing Minister will be working with the police to ensure that future pension arrangements are sustainable.

House adjourned at 4.48 pm.