Police Funding Formula

Keith Vaz Excerpts

Tuesday 1st March 2016 Commons Chamber

[Keith Vaz (Leicester East) (Lab)]

I am very pleased that the House has an opportunity to focus on the important issue of the police funding formula. I will set out the background to, and the timeline of, the funding formula review before assessing where the process is now. The fundamental concern of the Home Affairs Committee is: when is the new review going to start?

I want to thank the members of the Committee, who have unanimously agreed the report—the hon. Members for Louth and Horncastle (Victoria Atkins), for Kingston and Surbiton (James Berry), for Enfield, Southgate (Mr Burrowes), for Wealden (Nusrat Ghani), for North East Hampshire (Mr Jayawardena), for East Worthing and Shoreham (Tim Loughton), and for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald), and my hon. Friends the Members for Bradford West (Naz Shah), for Streatham (Mr Umunna) and for Walsall North (Mr Winnick).

The majority of police forces, chief constables, police and crime commissioners and Members of Parliament welcomed the launch of the police funding formula review last year. The manner in which police funding is currently distributed is outdated, inefficient and not fit for purpose. I want to commend the Minister for Policing, Crime and Criminal Justice for taking on this challenge head-on. However, his ambition, which is shared by the whole House, has not been matched by the process.

When the Home Office launched the public consultation on 21 July 2015, it allowed a period of only eight weeks. After receiving an initial 1,700 responses, it laid out its proposed refinements to the model on 28 October. The second proposal was described as “inadequate”—by, among others, Tony Hogg, the Devon and Cornwall police and crime commissioner—as it gave PCCs and chief constables just three weeks to respond.

The refined model showed that 11 forces would lose by the changes, while the remaining 32 forces would increase their share. The chief constables and PCCs were puzzled and frustrated about how the sums had been calculated. Eventually, it took Andrew White, the chief executive in the office of the Devon and Cornwall PCC, to purchase the original data, and he wrote to the Home Office on 2 November to inform the Home Office that it had used the wrong data in making its calculations. The whole police service and this House owe a debt of gratitude to Andrew White for his actions.

In a letter to me from the permanent secretary, Mark Sedwill has since stated that this error occurred because officials got confused with similar filenames and therefore used the wrong set of data. When the error was discovered, the director general of the crime and policing group at the Home Office, Mary Calam, admitted that she did not understand the significance of the response that she had signed. I am not sure whether that admission was to give us faith in the system or make us question it further. Overnight, police forces across the country had swung from being winners to losers and vice versa. Chief Constable Giles York of Sussex police said that his force went from a £10 million loss to a £2 million gain. Chief Constable Mike Creedon of Derbyshire police said that his force went from a gain of £20 million to a £7 million loss. Chief Constable Simon Cole demonstrated that Leicestershire constabulary was set to lose £700,000 under the old system, but would now lose £2.4 million.

Subsequently, Mr Speaker granted my urgent question on 19 November 2015 and the process was rightly suspended by the Policing Minister. Again, he should be commended for coming to the Dispatch Box and agreeing that the sums were wrong and that the process had to be halted. I do not want to dwell any further on the history, except to say, as it says in the report, that this was a shambolic end to a poorly managed process that significantly damaged the relationship between the Home Office and its primary stakeholders, the police.

Currently, police funding is supposedly being given on the basis of a funding formula that has not been operated for a number of years. The formula is over a decade old and is not based on the latest census data, but on the previous census. It is impossible for police forces to calculate it because many of the data are out of date and it does not take into account the modern nature of policing.

[Kevin Foster (Torbay) (Con)]

Having acted as the rapporteur for a report on the police funding formula by the Public Accounts Committee, may I ask the right hon. Gentleman whether he agrees that one issue is that the formula only really reflects the demands that crime places on the police, and not many of the other issues that they have to deal with? Does he share my disappointment that the shadow Policing Minister is not here to listen to this debate?

[Keith Vaz]

I make no comment on the absence of the shadow Policing Minister. I am sure that he will come in very soon and make up for lost time. I will come to the hon. Gentleman’s first point in my speech. He raises an important issue on the capabilities of the police and the new demands of 21st-century policing.

Mike Creedon, the Derbyshire police chief, said to me that if the current formula was still valid,

“it would be reflecting a reality which is ten years old”.

He is clear, as are many other chief constables, that there is a consensus that we need to restart the process of moving to a fairer funding model. I think that that consensus is reflected throughout the House.

Since the publication of the police grant report in December 2015, concerns have been raised that it represents a real-term cut to grant levels of 1.4% and requires increases to the police element of the council tax precept. Police forces are being required to raise the police precept across the country, including in Cheshire, Northumbria, Humberside and Thames Valley—the area that is partly represented by the Prime Minister and the Home Secretary. Dee Collins of West Yorkshire police estimates that her force has received a 3.2% cut in real terms, even after the PCC agreed to the maximum precept increase.

The Select Committee published its report on 11 December. The Government’s response is now 19 days late. The first question for the Minister is when the response will come.

Last Tuesday, five police and crime commissioners gave evidence to the Home Affairs Committee: Ron Ball from Warwickshire, Alan Charles from Derbyshire, Sir Clive Loader from Leicestershire, Katy Bourne from Sussex and Jane Kennedy from Merseyside. It was clear from their evidence that the police and crime commissioners had not been consulted on the new review. Ian Hopkins, the chief constable of Greater Manchester, has said that he wishes to work collectively and collaboratively with the Home Office, as do many PCCs and chiefs.

It is clear from the concerns that have been raised with me by chief constables before this debate that they have not been consulted. However, in the last debate, which as you know, Madam Deputy Speaker, was only last Wednesday, the Minister alluded to the fact that he had met a number of chief constables. I am sure that he will enlighten us as to his further discussions when he responds to this debate. Chief Constable Neil Rhodes and Deputy Chief Constable Heather Roach of Lincolnshire police have informed me that they met the Policing Minister last Wednesday, 24 February, to discuss the formula. I hope that he will tell us the outcome of that meeting.

When he replies to the debate, will the Minister tell us about his engagement with police forces, and reassure them that he is taking the matter as seriously as he was when he last appeared before the House? One issue that must be clarified is the capability review undertaken by the National Police Chiefs Council under the leadership of Sara Thornton. If the Minister could advise the House about how far those deliberations have reached, that will assist us in knowing something of the timetable that he has in mind.

It is concerning that since last year’s formula changes were abandoned, there have been no further proposals to work on. The Minister wrote to me on 1 February with an update on the formula arrangements, but as I said, he has not given us a date for when that review will commence. Police forces need to know what is going to happen. Ian Drysdale, the director of business services for Kent police, said that the continuing uncertainty is unhelpful, and that a transition to a new arrangement should be made as soon as possible. Following the glaring errors last year, it is self-evident that the Home Office should redouble its efforts to create a fairer funding model, and it is clear that the funding review should be restarted as swiftly as possible.

You will be interested to know, Madam Deputy Speaker, that Stephen Kavanagh, chief constable of Essex police, has stated that any prevarication on the part of the Home Office would be hugely disappointing and regrettable. Many have argued that it would be wrong to change the formula in a period of austerity, but on the contrary, austerity could have been a starting point for an informed reassessment of the formula in order to incentivise the police for reforms and deal with other inefficiencies. The flat rate reduction for all forces continues to penalise those who have already received less. However, following the Chancellor’s announcement in the comprehensive spending review on 25 November, which the Committee welcomed, that is less of a concern. In fact, the Home Office has a renewed opportunity to review the formula.

The three key failings aside from the stand-out mistake of confusing data filenames, were essentially process failures, such as sharing exemplifications at an early stage, which meant that data errors went unnoticed until it was too late, setting out transitional arrangements at an early stage, which meant that losers were even more concerned about the potentially immediate damaging impacts on their budget, and not allowing sufficient period for consultation, particularly with PCCs and chief constables. Does the Minister accept that those serious failings should be addressed in a future review process?

[Mr David Burrowes (Enfield, Southgate) (Con)]

The Minister accepted accountability for the mistake, but as he will know from his experience on the rugby field, he was sold a hospital pass in having to defend his position. A mistake was made at senior level in relation to the management of the process. We need real reassurance that that will not happen again, and there must be accountability in the management of the Home Office, to ensure that such a catastrophic error, which was not picked up and communicated properly to Ministers, does not happen again.

[Keith Vaz]

The hon. Gentleman is right, and he made that point when we took evidence from various chief constables and police and crime commissioners. It is vital to have proper accountability during this process, and I will come on to what the Committee agreed should be the best way forward.

The Home Affairs Committee made a number of recommendations on factors that must be included in the new funding review. We must recognise that although policing has changed fundamentally over the past 10 years, funding has never adjusted to it. PCCs from Leicestershire, Sir Clive Loader, from Hampshire, Simon Hayes, from South Wales, Alun Michael, and from West Yorkshire, Mark Burns-Williamson, are among those who have identified the growing level of non-crime demand on police time. Almost all police forces can point to a range of modern demands on police time, including terrorism, cybercrime, modern slavery and child exploitation. The Committee also considered it inexplicable that diversity is not one of the categories and criteria in the funding formula.

Chief Constable Simon Cole, the national lead on Prevent, highlights factors such as required language skills, translation services and the resources required in emerging communities. In Leicester, we could have the happy added burden of European football next season, subject to the outcome of the match at 7.45 pm today and the 10 other remaining matches. It is quite clear that the additional demands on policing in Leicester will be profound.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

Does the right hon. Gentleman agree that Wales has specific policing needs? He mentioned diversity and language, but language explicitly springs to mind. The growing powers for the Welsh Assembly call out for policing to be devolved. That is particularly pertinent because Secretary of State for Wales committed yesterday, I believe, to a thorough overhaul of the draft Wales Bill.

[Keith Vaz]

The hon. Lady is right. That is the point the Committee makes in our report. Different areas have different demands. Policing has changed. It is not as it was 20 years ago or even 10 years ago. Therefore, the police must say what they are doing now, and the Government must say what they want to fund. Of course, the situation in Wales requires special attention.

The indicators proposed by the Home Office in determining funding—there are only four—fail to take into account many of the points raised in the report, and thus miss 70% to 80% of police demand that is not linked to volume crime. The Home Office needs to make absolutely clear what tasks 21st-century policing is expected to take on, and then decide how much it is prepared to fund.

It is of course important that police forces work in a collaborative way. Indeed, the Government are working in a collaborative way. When the Minister came before the House in November to tell us that the police funding formula review was being suspended, he was not then the Minister with responsibility for the fire services. The Government have decided to look across the Government and ensure that they collaborate properly. If they can do so, so can local police forces. If that happens, it must be part of the funding review formula.

One key Committee recommendation was the appointment of an independent panel to assist the Home Office in formulating the revised proposals. That is not because we do not trust Home Office officials to add up. We need a robust and defensible way of looking at the formula and it needs to be independent. Therefore, the Committee went to the trouble of suggesting the kinds of organisations that should sit on the panel: the Chartered Institute of Public Finance and Accountancy, the College of Policing, the Institute for Fiscal Studies and the Royal Statistical Society. You will notice, Madam Deputy Speaker, an emphasis on those who can add and therefore crunch statistics. There is an ongoing project between the London School of Economics and Her Majesty’s inspectorate of constabulary to provide a sound academic basis for identifying the underlying demands on police time. Let us use the expertise of our academic institutions. Such work, when led by the independent panel, could make the Minister’s job even easier.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

Will my right hon. Friend give way?

[Keith Vaz]

This is the last time I will give way because I know that other Members want to speak.

[Mr Thomas]

I am grateful to my right hon. Friend for giving way. When he and his fellow Committee members were looking at the potential balance of an independent panel, did they consider experts on serious and organised crime? It will be important to understand the impact on London’s police force of the pressures the Met is under to help to continue the battle against serious and organised crime.

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[Keith Vaz]

My hon. Friend is right, and not just from the point of view of what happens in Harrow, which is very different from what happens in Wandsworth, for example. The issue of serious and organised crime has grown in the past 10 years. He is right that that needs to be properly represented as part of the review.

At this time, the Home Office has two realistic options for moving forward: it can spend the next two years on a very long consultative detailed review, run accurate data against the formula, and implement the formula changes it proposed last year after a further period of consultation; or it can go out to an independent method of checking on what is in the best interests of local police forces. Of course, there will always be winners and losers from this process, and there will be police constables and police and crime commissioners with different voices, but to leave the situation in limbo, as it is at the moment, is, in the view of the Committee, unacceptable. Doing nothing is not really an option and this is not an issue that can be parked until, say, 2019. Unfortunately, those are some of the rumours emerging in the press, whether from the Foreign Office or elsewhere.

This time, I hope the Minister will have all the information before we proceed. I hope he will have to hand the capabilities report that is being prepared by the police chiefs. Their involvement is absolutely critical. I would not like the review to start and then have to stop because there has to be another review, but we do want the process to start as soon as possible. From our point of view, the sooner the better. We want to ensure that everybody in the policing family is properly consulted, so we have no repetition of what has happened in the past.

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[Mike Penning]

I have not suggested that. I have said time and again at this Dispatch Box and to the PCC and the chief constable that Bedfordshire does need help. That is why I put the deep dive into Bedfordshire, as well as into Lincolnshire, to see exactly what was going on. Fantastic work has been done in collaboration with the other local forces. The capabilities review, which I will come on to, is crucial in ensuring that many of the forces get the sort of help they need.

Every time I stand at this Dispatch Box, I say how proud I am to be the Policing Minister for England and Wales, but I have never been prouder than I was yesterday at Didcot. We have all seen Didcot on our TV screens, but only when I went there did I understand the scale of the industrial accident—I use that word advisedly, because a police and Health and Safety Executive inquiry is still going on. Half the building has collapsed. Our thoughts and prayers are with those who are injured and the families of those who died. One family have had their loved one given back to them, but three of the bodies—I have to use that word, because we are in the recovery phase at the moment—are still underneath all the rubble. It will be some considerable time before it is safe to reclaim them so that their families can bury them and, understandably, grieve.

When I was at Didcot yesterday, I met some very young officers who arrived at the scene first. I can only imagine, even with the experiences I had in my different roles before I came to this House, what went through their minds. They went in one direction when lots of people were going in the other direction. There was a dust cloud, so at one stage they were not even sure where the incident was. There were lots of injured people and lots of people who needed help. The work that took place and the unbelievable teamwork that went on across the blue line during the incident was reported to me yesterday.

On behalf of the House and the country, I said thank you to every one of the emergency workers and personnel who were there, even down to the volunteer groups that came with tea and coffee. That happened literally within minutes because of the agreements that they had with the local police under the gold command. I said two things to them. I said that I was enormously proud, as Minister with responsibility for policing and fire issues, to be with them—there were also members of lots of other agencies—because they had done fantastically well. I also told them that what they saw on that afternoon would live with them for the rest of their lives. It was not physical injuries that I was talking about, but mental injuries.

We have touched on mental health today. The emergency services tend to be very macho, as do our armed forces, but post-traumatic stress can touch everybody—sometimes a couple of days later, sometimes a couple of years later and sometimes many years later. I have friends who served in the Falklands who have only started to suffer in the last couple of years. Our thoughts must be with those people.

A key thing that happened at Didcot—this is mentioned in the report—is that capabilities from other forces came to help. It was not just the traditional mutual aid that we saw in London a couple of weeks ago for the Syria conference, when armed response units came from all around the country, including from Northern Ireland—I was very proud to see the men and women in the green uniform on the streets of London. We must ask what we can learn from that. Are there lessons to be learned for our control rooms? There were lots of 999 calls. The police got the initial call, but there were also calls to the fire service, and there was a slight difference in terminology.

That shows why it is crucial in the funding review that we get the chiefs to tell us where their capabilities will sit. It looks quite simple initially: will they be in the force, whether it be Merseyside, Hertfordshire or the Met, in the regional organised crime units or at the National Crime Agency? Actually, it is much more complicated than that. As we touched on earlier, the forces have been doing work on joint capabilities for some considerable time. When we look at the new formula and at where the capabilities will be delivered from, it is crucial that we do not damage the work that has been done. We must not tell the forces to tear up the very close work that they have done and say, “You can’t do it there. It has to be done under the ROCU.” It is not for the Policing Minister to do that.

Alongside the funding review, the chief constables are coming forward with their own capabilities review. I cannot today give the House and the Chair of the Home Affairs Committee a timescale and date for the start of the new consultation, because I need that review to have reported to me. It would be ludicrous if I announced a new review and people said to me, “We will structure it this way” but then came back with another formula. I am not willing to do that.

[Keith Vaz]

The Minister has given us a pathway and timetable that we did not have before. Is he saying that as soon as the capabilities report comes to him, he will consider it and then start the funding review? Is that the timetable he is now setting in place?

[Mike Penning]

I am trying to be honest, as I always am when at the Dispatch Box or giving evidence to a Select Committee. Is this in my destiny today? Could I start a new consultation tomorrow? Yes I could, but I would not have the information within my grasp to do that. I have not got a date from Sara Thornton for that report. It is enormously difficult getting 43 police chiefs to agree where they will place their capabilities. For instance, East Midlands police covers homicide in the whole area, but most of the other ROCUs do not. Things such as cybercrime and encryption need to come with us because it should not be for the House or a Minister to tell chief constables “That’s what you should be doing”. The constables should be telling us where the capabilities will be, so that we can help with the funding formula.

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[Keith Vaz]

This has been an excellent debate, with so many right hon. and hon. Members talking about their local areas. The passion and respect we have in this House for our local police force is quite obvious. I want to add my thanks to Simon Cole, the chief constable of Leicestershire, and to the men and women of Leicestershire police, especially with an hour to go until the next time they will be at the King Power stadium protecting the best football team in England—with apologies to what happened to your own team, Mr Speaker. It is just one example of wonderful policing work.

[Mike Penning]

I know that as an Arsenal supporter, you, Mr Speaker, will find it somewhat difficult to be listening to a Leicester supporter, especially after the weekend, but the right hon. Gentleman makes an important point. The policing of football grounds has changed massively. It is done completely differently. Thank goodness the sort of violence we used to see when I was younger is no longer there.

[Keith Vaz]

Indeed, Mr Speaker, as we prepare, with the grace of God, for European football next year.

The key question the Select Committee wanted the Minister to answer was when? He has not told us when, but he has given us a timetable. He is waiting for the capabilities report to come from the lead at the NPCC Chief Constables’ Council. When he gets that he will review it and then start the process. At least we have a timetable and a pathway, so there is some clarity. It is not the absolute clarity we needed, but it is some way forward to find out how we will get a police funding formula that is fit for purpose.

Question deferred until tomorrow at Seven o’clock (Standing Order No. 54).